Europe’s problem is Austerity?

[miami_thomas]

It is absolutely incredible that they are still blaming all the problems in Europe on the austerity measures and not on the debt. Austerity measures are a result of too much spending accumulating into a huge deficit that grew into too much debt. What are they supposed to do if not raise taxes and make cuts? They can’t keep spending and borrowing at the interest rates being offered. They think things will get better but they are mistaken because they think eventually we can just go back to spending enormous amounts of money with low taxes and borrowing to cover the difference. That and they obviously are not taking into consideration the fact that the US will be the next credit bubble to bust and it is going to be so big that it will certainly set of a chain reaction unlike any ever seen. We thought all the previous credit bursts were bad just wait until this one hits.


Euro zone falls into second recession since 2009 | Reuters

 

[longknife]

Europe is a prime example of what's going to happen here!!!

There will come a time when all the gimme-gimme programs go broke and people will no longer be able to get their handouts.

When that happens, you'll see the same rioting and looting as is going on in Europe.

It's coming libs - you're getting what you voted for!!!

 

[waltky]

Double-dip recession comes to Europe...

Eurozone slides back into recession
Nov 15,`12 -- The 17-country eurozone has fallen back into recession for the first time in three years as the fallout from the region's financial crisis was felt from Amsterdam to Athens.

And with surveys pointing to increasingly depressed conditions across the 17-member group at a time of austerity and high unemployment, the recession is forecast to deepen, and make the debt crisis - which has been calmer of late - even more difficult to handle. Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand.

The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is technically in recession, commonly defined as two straight quarters of falling output. The eurozone economy shrank at annual rate of 0.2 percent during the July-September quarter, according to calculations by Capital Economics. "The eurozone economy will continue its decline in Q4 and probably well into 2013 too - a good backdrop for another debt crisis," said Michael Taylor, an economist at Lombard Street Research.

Because of the eurozone's grueling three-year debt crisis, the region has been the major focus of concern for the world economy. The eurozone economy is worth around (EURO)9.5 trillion, or $12.1 trillion, which puts it on a par with the U.S.. The region, with its 332 million people, is the U.S.'s largest export customer, and any fall-off in demand will hit order books. While the U.S has managed to bounce back from its own recession in 2008-09, albeit inconsistently, and China continues to post strong growth, Europe's economies have been on a downward spiral - and there is little sign of any improvement in the near-term. Last week, the European Union's executive arm forecast the eurozone's economy would shrink 0.4 percent this year. Then only a meager 0.1 percent growth in 2013.

MORE

 

[ScienceRocks]

Europe has the same problem as we do=DEBT. They're being forced to CUT.

The left doesn't understand or doesn't care.

 

[ilia25]

It is absolutely incredible that they are still blaming all the problems in Europe on the austerity measures and not on the debt. Austerity measures are a result of too much spending accumulating into a huge deficit that grew into too much debt. What are they supposed to do if not raise taxes and make cuts?

They were not supposed to face the debt crisis in the first place! Look at Japan, it has more debt than the worst offender -- Greece, but Japan has no problem borrowing at 0%.

European periphery problems happened not because they had too much debt, but because the European Central Bank refused to buy it in unlimited quantities.

 

[g5000]

It is absolutely incredible that they are still blaming all the problems in Europe on the austerity measures and not on the debt. Austerity measures are a result of too much spending accumulating into a huge deficit that grew into too much debt. What are they supposed to do if not raise taxes and make cuts? They can’t keep spending and borrowing at the interest rates being offered. They think things will get better but they are mistaken because they think eventually we can just go back to spending enormous amounts of money with low taxes and borrowing to cover the difference. That and they obviously are not taking into consideration the fact that the US will be the next credit bubble to bust and it is going to be so big that it will certainly set of a chain reaction unlike any ever seen. We thought all the previous credit bursts were bad just wait until this one hits.


Euro zone falls into second recession since 2009 | Reuters

There are six ways for a country to mitigate debt:

1. External devaluation, a.k.a. "printing money". This option is not available to countries like Greece because they are part of the Euro. Only the ECB can devalue the currency. The ECB has resisted doing this, but is now giving it serious consideration.

2. Internal devaluation. Raise taxes and lower wages, a.k.a. "austerity measures". This is what the troubled countries have been trying. But the problem is that their austerity measure cannot go deep enough to cover the bills that are due, so they have to keep rolling over their debt by borrowing ever larger sums of money to pay the old debt plus interest, thus creating a snowball effect.

3. Interest rate deduction. Negotiate with one's creditors for lower interest rates. The troubled countries have been doing this as well, via the ECB. But the troubled countries STILL can't pay down their debts because their economies are shrinking faster than their debts.

4. GDP growth. The GDP of the troubled countries has been shrinking. The exact opposite of where they need to go. Less GDP means less revenue, which means less ability to service one's debts.

5. Default. Throw up one's hands and give creditors a haircut. This is the inevitable outcome for the troubled countries in Europe. Right now, creditors are playing a game of hot potato. Rotating the debt hoping not to be the last one holding the potato and taking the loss. Sooner or later, the day of reckoning is coming, and then the shit really hits the fan. It's the second collapse of the global derivatives bubble, identical to the one in 2008.

6. Bailout. Getting rich countries to pay your debts. Figure the odds of that happening. Zilch.

.

 

[ilia25]

Europe has the same problem as we do=DEBT. They're being forced to CUT.

The left doesn't understand or doesn't care.

No, the crisis hit many European country because they could not borrow in their own currency. Same thing could never happen to the US.

 

[Koios]

Europe’s problem is Austerity?

I don't think so. I think the Med Countries, greece, italy, etc. are the problem. They over-borrowed, in part due to the free-flowing capital vis a vis credit default swaps, which our banks cooked up after we gutted Glass-Steagall. It was easy money, and they over borrowed.

Germany, France, UK are still major players and having to carry the water for other EU member states who acted irresponsibly, albeit with some German, French, UK (and US) banks doing the lending willy-nilly.

Blame to go around. But restore Glass-Steagall seems like the no-brainer first step on the road to fixing the mess.

 

[g5000]

Europe’s problem is Austerity?

I don't think so. I think the Med Countries, greece, italy, etc. are the problem. They over-borrowed, in part due to the free-flowing capital vis a vis credit default swaps, which our banks cooked up after we gutted Glass-Steagall. It was easy money, and they over borrowed.

Germany, France, UK are still major players and having to carry the water for other EU member states who acted irresponsibly, albeit with some German, French, UK (and US) banks doing the lending willy-nilly.

Blame to go around. But restore Glass-Steagall seems like the no-brainer first step on the road to fixing the mess.

At last, someone else who gets it.

.

 

[Oddball]

Europe has the same problem as we do=DEBT. They're being forced to CUT.

The left doesn't understand or doesn't care.

No, the crisis hit many European country because they could not borrow in their own currency. Same thing could never happen to the US.

Well, it's a good thing that our central banksters would never ever buy up federal debt to float their spendthrift irresponsibility.

Oh, wait.....

 

[ilia25]

Europe’s problem is Austerity?

I don't think so. I think the Med Countries, greece, italy, etc. are the problem. They over-borrowed, in part due to the free-flowing capital vis a vis credit default swaps, which our banks cooked up after we gutted Glass-Steagall. It was easy money, and they over borrowed.

Germany, France, UK are still major players and having to carry the water for other EU member states who acted irresponsibly, albeit with some German, French, UK (and US) banks doing the lending willy-nilly.

Blame to go around. But restore Glass-Steagall seems like the no-brainer first step on the road to fixing the mess.

They never really "over borrowed". Their ability to service their debt was only undermined when the austerity was forced on them by ECB and Germany.

 

[shintao]

Europe is a prime example of what's going to happen here!!!

There will come a time when all the gimme-gimme programs go broke and people will no longer be able to get their handouts.

Nice doom day story, but it doesn't work that way. The entitlement programs have existed for years, so obviously the collapse is not related to entitlement programs that we can afford. What we cannot afford is the globalization entitlements, the massive welfare military, and massive foreign aid. Eliminate them and the problems go away. The last thing to go will be the American people, so deal with the intangibles.

When that happens, you'll see the same rioting and looting as is going on in Europe.

It's coming libs - you're getting what you voted for!!!

Oh thank gawwd, we are so lucky to get what we voted for, I am just so gratified that tax payer money is being spent on taxpayers.

 

[g5000]

Europe’s problem is Austerity?

I don't think so. I think the Med Countries, greece, italy, etc. are the problem. They over-borrowed, in part due to the free-flowing capital vis a vis credit default swaps, which our banks cooked up after we gutted Glass-Steagall. It was easy money, and they over borrowed.

Germany, France, UK are still major players and having to carry the water for other EU member states who acted irresponsibly, albeit with some German, French, UK (and US) banks doing the lending willy-nilly.

Blame to go around. But restore Glass-Steagall seems like the no-brainer first step on the road to fixing the mess.

They never really "over borrowed". Their ability to service their debt was only undermined when the austerity was forced on them by ECB and Germany.

They most certainly did over borrow. Wall Street firms helped Greece hide its debts. Then when there was a change in government, all the hidden debt was discovered and disclosed to the world.

.

 

[shintao]

Europe has the same problem as we do=DEBT. They're being forced to CUT.

The left doesn't understand or doesn't care.

Tell that to the right party of no.................

 

[Swagger]

Europe's fundamental problem is the EU. Coupled with the fact that said organisation didn't have the balls to refuse entry to poorer countries in Eastern Europe whose economies weren't aligned with those in the West.

Not to mention the fact that Brussels insists on inviting anyone and everyone from the arseholes of Asia and Africa to settle on the continent; no-doubt in order to further displace the indigenous population to further their plan towards a federalist Euro state.

Mark my words, the whole thing's going to collapse a lot sooner than later. And you're going to be seeing bloodshed and large-scale civil unrest in even the more civilised cities in Europe on your TV screens in the near future.

 

[ilia25]

Europe has the same problem as we do=DEBT. They're being forced to CUT.

The left doesn't understand or doesn't care.

No, the crisis hit many European country because they could not borrow in their own currency. Same thing could never happen to the US.

Well, it's a good thing that our central banksters would never ever buy up federal debt to float their spendthrift irresponsibility.

Oh, wait.....

Yes, wait. It is because Fed is ready to buy the US debt, the US will never default. And that is why the US can borrow at low rates despite the huge deficits.

We spend less on servicing our 16 trillions of debt in 2012 than we did in 2009, when our debt was only 10 trillion.

 

[Oddball]

Europe’s problem is Austerity?

I don't think so. I think the Med Countries, greece, italy, etc. are the problem. They over-borrowed, in part due to the free-flowing capital vis a vis credit default swaps, which our banks cooked up after we gutted Glass-Steagall. It was easy money, and they over borrowed.

Germany, France, UK are still major players and having to carry the water for other EU member states who acted irresponsibly, albeit with some German, French, UK (and US) banks doing the lending willy-nilly.

Blame to go around. But restore Glass-Steagall seems like the no-brainer first step on the road to fixing the mess.

That's the most lucid and realistic thing you've said in 205 posts.

Blind squirrel meets nut.

 

[Charles_Main]

Europe has the same problem as we do=DEBT. They're being forced to CUT.

The left doesn't understand or doesn't care.

Oh they care, it's them rioting, Screaming about losing entitlements. They care about their hand outs, and little else. Economic Viability does not even factor into their Decision process, because they truly believe the Rich Among them can afford it.

Sad but true, and definitely soon to come to the US

Want Proof? Obama just got re-elected while promising that all we have to do is make a few cuts, and Tax the Richest among us a little more and all will be ok. The whole while did anyone seriously question his math? Which is of course impossible, There simply are not enough rich, to make it work. You could literally take 100% of their Income every year and it would only Fund the current spending for 90 days.

Nope, other than Romney and FOX news nobody ever talked about how Obama's Math didn't add up. They were far to busy telling us how Romney's didn't to be bothered.

 

[shintao]

It is absolutely incredible that they are still blaming all the problems in Europe on the austerity measures and not on the debt. Austerity measures are a result of too much spending accumulating into a huge deficit that grew into too much debt. What are they supposed to do if not raise taxes and make cuts? They can’t keep spending and borrowing at the interest rates being offered. They think things will get better but they are mistaken because they think eventually we can just go back to spending enormous amounts of money with low taxes and borrowing to cover the difference. That and they obviously are not taking into consideration the fact that the US will be the next credit bubble to bust and it is going to be so big that it will certainly set of a chain reaction unlike any ever seen. We thought all the previous credit bursts were bad just wait until this one hits.


Euro zone falls into second recession since 2009 | Reuters

There are six ways for a country to mitigate debt:

1. External devaluation, a.k.a. "printing money". This option is not available to countries like Greece because they are part of the Euro. Only the ECB can devalue the currency. The ECB has resisted doing this, but is now giving it serious consideration.

2. Internal devaluation. Raise taxes and lower wages, a.k.a. "austerity measures". This is what the troubled countries have been trying. But the problem is that their austerity measure cannot go deep enough to cover the bills that are due, so they have to keep rolling over their debt by borrowing ever larger sums of money to pay the old debt plus interest, thus creating a snowball effect.

3. Interest rate deduction. Negotiate with one's creditors for lower interest rates. The troubled countries have been doing this as well, via the ECB. But the troubled countries STILL can't pay down their debts because their economies are shrinking faster than their debts.

4. GDP growth. The GDP of the troubled countries has been shrinking. The exact opposite of where they need to go. Less GDP means less revenue, which means less ability to service one's debts.

5. Default. Throw up one's hands and give creditors a haircut. This is the inevitable outcome for the troubled countries in Europe. Right now, creditors are playing a game of hot potato. Rotating the debt hoping not to be the last one holding the potato and taking the loss. Sooner or later, the day of reckoning is coming, and then the shit really hits the fan. It's the second collapse of the global derivatives bubble, identical to the one in 2008.

6. Bailout. Getting rich countries to pay your debts. Figure the odds of that happening. Zilch.

.

7. might be, turn your government into a business like the Saudies, and sell resources.

 

[Oddball]

No, the crisis hit many European country because they could not borrow in their own currency. Same thing could never happen to the US.

Well, it's a good thing that our central banksters would never ever buy up federal debt to float their spendthrift irresponsibility.

Oh, wait.....

Yes, wait. It is because Fed is ready to buy the US debt, the US will never default. And that is why the US can borrow at low rates despite the huge deficits.

We spend less on servicing our 16 trillions of debt in 2012 than we did in 2009, when our debt was only 10 trillion.

Yeah...They'll never default, even if it means that they will have to start printing up these: