predictions of our demise

[Azazello1313]

good read

[wiegie]

first off, I said this three months ago, motherf'cker. :oldjohnelwaygrin:

 

secondly:

Sure, public debt has exploded, but as MGI points out, that really is the proper way of doing things after a financial bubble:

I've been saying this for 3+ years now.

[Azazello1313]

secondly:

Sure, public debt has exploded, but as MGI points out, that really is the proper way of doing things after a financial bubble:

 

I've been saying this for 3+ years now.

 

problem is, we were doing it before the bubble as well. if left unchecked, we will be doing it to an even greater degree into the future, even assuming a strong recovery. we see our credit being downgraded, we see the model bankrupting places like greece, italy, california and illinois. as long as we're not stupid enough to continue on undeterred, we'll be ok, but looking at our political class sometimes it's hard to be optimistic.

[wiegie]

problem is, we were doing it before the bubble as well. if left unchecked, we will be doing it to an even greater degree into the future, even assuming a strong recovery. we see our credit being downgraded, we see the model bankrupting places like greece, italy, california and illinois. as long as we're not stupid enough to continue on undeterred, we'll be ok, but looking at our political class sometimes it's hard to be optimistic.

the main problem with our budget is with health care in the long-term. We have to address this, no doubt, and I've never said otherwise--but this does not mean that we shouldn't have used debt to help us in our (relatively) short-term financial crisis/recession/recovery

[Ursa Majoris]

problem is, we were doing it before the bubble as well. if left unchecked, we will be doing it to an even greater degree into the future, even assuming a strong recovery. we see our credit being downgraded, we see the model bankrupting places like greece, italy, california and illinois. as long as we're not stupid enough to continue on undeterred, we'll be ok, but looking at our political class sometimes it's hard to be optimistic.

The problems causing the 2008 crash and the problems facing Italy and Greece right now are entirely different. Europe's issues are the result of voting themselves an easier and easier life while at the same time completely abandoning the concept of paying any tax at all.

[wiegie]

One more thing from Az's link:

“Over the past decade, the US has had some huge gains in productivity, and we have seen unit labour costs actually falling,” says Chad Moutray, chief economist at the National Association of Manufacturers. “A lot of our members tell us that it sometimes is cheaper to produce in the US, especially because labour costs are lower.”

Chad is a friend of mine -- we shared an office when I was working on my masters degree. (He was the chief economist for the Small Business Administration under the Bush administration and he has been a conservative since I have known him (20 years or so). When we shared an office he had a poster on the wall that almost looked like an advertisement for CBS News until you read the words "Rather Biased".)

[Azazello1313]

Europe's issues are the result of voting themselves an easier and easier life while at the same time completely abandoning the concept of paying any tax at all.

 

list of countries by tax as percentage of GDP

 

greece 33.5

italy 42.6

france 44.6

portugal 37.0

UK 39.0

 

[Ursa Majoris]

list of countries by tax as percentage of GDP

 

greece 33.5

italy 42.6

france 44.6

portugal 37.0

UK 39.0

 

 

That's what they're SUPPOSED to pay. Here's the reality:

 

Telegraph - tax raid on Cortina

CNN article on southern European tax evasion

 

According to a 2007 paper by Austrian economist Friedrich Schneider, the shadow economy in Italy accounted for 22.3% of gross domestic product (GDP), that of Spain 19.3%; Portugal 19.2% and Greece a staggering 25.1%. By comparison, the U.S. shadow economy was 7.2% of GDP. A recent European Union report came up with similar figures.

 

Don't forget the retirement for hairdressers and 579 other professions at 50 or 55 on full pension.

 

European problems are almost all of their own making.

[Ice1]

European problems are almost all of their own making.

 

Which is precisely why big central socialist governments don't work.

 

The financial crisis in 08 did have little do with what we are seeing in Greece today. We will not see what has happened in Greece here for another decade or so if we are lucky but if we do not get handle on spending our day is coming.

 

We will reach 16 Trillion in debt this year and the Senate has yet to pass a budget since Obama took office.

[Ursa Majoris]

Which is precisely why big central socialist governments don't work.

I knew if you stuck around long enough we'd agree on something

[Azazello1313]

 

That's what they're SUPPOSED to pay. Here's the reality:

 

Telegraph - tax raid on Cortina

CNN article on southern European tax evasion

According to a 2007 paper by Austrian economist Friedrich Schneider, the shadow economy in Italy accounted for 22.3% of gross domestic product (GDP), that of Spain 19.3%; Portugal 19.2% and Greece a staggering 25.1%. By comparison, the U.S. shadow economy was 7.2% of GDP. A recent European Union report came up with similar figures.

 

Don't forget the retirement for hairdressers and 579 other professions at 50 or 55 on full pension.

 

European problems are almost all of their own making.

 

 

I wonder if that is captured at all, or attempted to be, in the denominator of the tax/GDP ratio.

 

in any case, I agree with you completely. high taxes and overly generous entitlements encourage a shadow economy and, ultimately, economic ruin. all of their own making indeed.