I've submitted this first but it didn't take off...
Anyway: this is just the beginning and it's not going to stop anytime soon. The Eurozone is in big trouble: it simply cannot work when you have people who only want to work 32 hours / week and stop working at 60 years old (France) while on the other side you have hard-working germans.
The crisis we're witnessing since a few years in the eurozone is really simple: the GDP growth number in most of the eurozone are fake in that they do not correspond to wealth created but to wealth created + state debt. Nearly every single country in the eurozone is running at deficit.
The crisis is due to one and only one thing: states that are so indebted that they cannot borrow anymore.
Economists warned about precisely that scenario before the first euro even circulated: Greece, Spain, France, Cyprus... 15 years ago people warned that it would happen just like that. It was just a matter of time.
I can tell you what's coming next: Greece is going to default a second time.
In 2014 France shall have its deficit skyrocketing and shall have issue re-financing itself on the market.
France is the 2nd biggest economy of the eurozone and the eurozone is f^cked. It's game over. France has taxed the private sector so much that it cannot tax it anymore and, anyway, it's too late: investors did flee the country and now individuals are engaging in a bank run (or leaving the country).
The obvious solution would be a massive devaluation of the euro but this cannot happen because if it happens Japan goes down (and probably the U.S.).
We're near the endgame: the house of cards may fall soon.
And I can tell you thing: I want less state. This entire euro-crisis is a debt of sovereign states having way too much public debt because they've constantly been running at deficit, for decades. And now they're running out of money.
It didn't help that they borrowed money to save banksters but don't be mistaken: nobody forced these states to run with crazy-high deficit for decades.
F^ck socialism. Really f^ck it.
Btw I don't care if Cyprus was supposed to be very liberal: Cyprus is 0.2% of the GDP of the eurozone and doesn't matter.
What matter is that socialist Spain, Greece, Portugal and France are close to state default.
They'll be watching closely how announcing money confiscation just before a long week-end plays out (monday is a legal day off in Cyprus) and they'll probably be desperately trying to do the same in these countries.
And it's not going to work.
People should really start realizing that Keynes was all wrong all along and that the Friedman school is the only correct one: they did predict all this. Keynesians didn't.
Btw if the eurozone goes down dont' think the U.S. is going to be fine: some economists are predicting a worldwide drop of the world GDP by as much as 30%.
Socialism and capitalism are tools, not complete methods to run and provide for a country's people, or society. No country exists as purely one or the other. Every country is a shade of socialist and capitalist grey. Even the US has a huge amount of socialist spending. The huge military for starters, all that money that goes via the military to the industries that supply it. Money straight in to jobs. And so on....
Socialism is basically government spending. That is all. Capitalism is the bit that raises the money for the government spending. The very simple problem is when the balance goes wrong. The balance has gone wrong, every where.
Thing is, what the anti socialists seem very keen to forget is that this all kicked off with subprime loans, badly regulated, free market loans, not government loans or spending. That was us, the public and its ever increasing demands for personal borrowing, and capitalism absolutely lapped it up, until it failed. Capitalism failed, not socialism. Capitalism ran rampant and crashed. Luckily socialist levied money was there to bail it out. The bail outs are government spending. If government didn't have money to bail them out, they would have catastrophically failed. I assume the anti socialists wanted the banks to fail? Fair enough actually, that is how capitalism works, the weak fail. In some ways, I think the banks should have failed. But, if we are to get angry at 10% of people money being converted in to bank shares (did people miss that? It is a bullet point here: http://www.bbc.co.uk/news/world-europe-21818598 ), then losing everything in a bank fail must be very much a no no. So, we do like government spending when it suits.
So, one cannot complain about the spending when it was the money provider, capitalism, that screwed up in the first place, leaving no money to spend.
Put it this way: If Mr Hubby lose his job, its not the wife's fault for spending the family budget each week, is it? Equally not the wife's fault if she asked Mr Hubby if she could take out a loan, he agreed, and not cant pay it back because hubby lost his job. More, over, if Mr Hubby was pushing her to take loans, it is even more not her fault.
So stop with the finger pointing rightard anti socialism hate stuff. It doesn't work, its childish, and way too Glen Beck for sensible discussion.
Now, of course the socialism bit has to do its bit and contract so that the capitalism bit can breathe and rebuild, while regulating it enough such that insane lending and borrowing cant happen again. The balance must be restored.
> The huge military for starters, all that money that goes via the military to the industries that supply it. Money straight in to jobs.
Jobs which create guns and bullets which are fired and kill people and do absolutely nothing for the betterment of man and do nothing (or very little) to increase productivity. In other words, this is a great example of the broken window fallacy.
> what the anti socialists seem very keen to forget is that this all kicked off with subprime loans, badly regulated, free market loans, not government loans or spending.
So you're just going to ignore all the government encouragement along the way? You're going to ignore the Community Reinvestment Act, Fannie Mae and Freddie Mac, mortgage deductions, and everything else the government has done in the past half century to encourage home ownership? You're just going to ignore the very low interest lates proceeding the dot-com bust? You're going to ignore the implicit bailout guarantees provided by the government and the FDIC? You're going to ignore all the regulation that encouraged too-big-to-fail banks to grow and continue to exist?
No, the housing crisis was a joint effort. It was, as I've heard described best, the private market getting drunk off booze provided by the government. The private and the public sector both messed up. Derivative packaging and trading and all of that was certainly ugly. But you cannot possibly blame this on the free market (because free it wasn't) and you cannot absolve the government of responsibility. To do so would be irresponsible itself.
> I assume the anti socialists wanted the banks to fail?
It was government policy that encouraged their creation, so yes. Of course.
> So, we do like government spending when it suits.
Government spending to solve a problem created by the government. Brilliant.
> So, one cannot complain about the spending when it was the money provider, capitalism, that screwed up in the first place, leaving no money to spend.
No. Just no. This is like saying capitalism caused the Great Depression. See above.
Anyway: this is just the beginning and it's not going to stop anytime soon. The Eurozone is in big trouble: it simply cannot work when you have people who only want to work 32 hours / week and stop working at 60 years old (France) while on the other side you have hard-working germans.
The crisis we're witnessing since a few years in the eurozone is really simple: the GDP growth number in most of the eurozone are fake in that they do not correspond to wealth created but to wealth created + state debt. Nearly every single country in the eurozone is running at deficit.
The crisis is due to one and only one thing: states that are so indebted that they cannot borrow anymore.
Economists warned about precisely that scenario before the first euro even circulated: Greece, Spain, France, Cyprus... 15 years ago people warned that it would happen just like that. It was just a matter of time.
I can tell you what's coming next: Greece is going to default a second time.
In 2014 France shall have its deficit skyrocketing and shall have issue re-financing itself on the market.
France is the 2nd biggest economy of the eurozone and the eurozone is f^cked. It's game over. France has taxed the private sector so much that it cannot tax it anymore and, anyway, it's too late: investors did flee the country and now individuals are engaging in a bank run (or leaving the country).
The obvious solution would be a massive devaluation of the euro but this cannot happen because if it happens Japan goes down (and probably the U.S.).
We're near the endgame: the house of cards may fall soon.
And I can tell you thing: I want less state. This entire euro-crisis is a debt of sovereign states having way too much public debt because they've constantly been running at deficit, for decades. And now they're running out of money.
It didn't help that they borrowed money to save banksters but don't be mistaken: nobody forced these states to run with crazy-high deficit for decades.
F^ck socialism. Really f^ck it.
Btw I don't care if Cyprus was supposed to be very liberal: Cyprus is 0.2% of the GDP of the eurozone and doesn't matter.
What matter is that socialist Spain, Greece, Portugal and France are close to state default.
They'll be watching closely how announcing money confiscation just before a long week-end plays out (monday is a legal day off in Cyprus) and they'll probably be desperately trying to do the same in these countries.
And it's not going to work.
People should really start realizing that Keynes was all wrong all along and that the Friedman school is the only correct one: they did predict all this. Keynesians didn't.
Btw if the eurozone goes down dont' think the U.S. is going to be fine: some economists are predicting a worldwide drop of the world GDP by as much as 30%.
It's just a matter of years, maybe less.