Posted on 09/28/2012 11:35:52 PM PDT by bruinbirdman
Spain has pushed through €40bn of fresh austerity measures in the teeth of recession, despite violent protests across the country and separatist crises in Catalonia and the Basque region that threaten to break the country apart.
Premier Mariano Rajoy has frozen public pay in 2013 for the third year in a row. The agriculture ministry and culture expenses will be cut by 30pc and the defence bureacracy by 15pc. It comes on top of a €62bn squeeze already in the pipeline.
He brushed aside warnings that fiscal overkill – at a time when unemployment is already 25pc – could push the country into turmoil, saying he would listen only to the “silent majority” of responsible citizens.
Bowing to pressure from Brussels, the government has agreed to an independent budget office and a clampdown on early retirement. Pensions will rise by 1pc, paid for by raiding the social security reserve fund. The closed professional guilds and old-boy networks dating back to the Franco era will, in theory, be shaken up. There will be a lottery tax.
The plan was carefully crafted with the European Commission, which praised the measures as “concrete, ambitious and well-focused”. The hope is that the package will pre-empt any need for extra conditions if and when Spain requests a bail-out from the European Stability Mechanism, which in turn would trigger bond-buying by the European Central Bank.
It is uncertain, however, whether the German and Finnish parliaments would agree to such a formula. In any case, Spain must still meet EU deficit budget targets of 6.3pc this year and 4.5pc next year. This looks impossible. Madrid is chasing its tail in a downward spiral.
Rocketing debt service costs alone will eat up almost half the extra savings, rising by €9bn to €36bn next
(Excerpt) Read more at telegraph.co.uk ...
That is exactly what we in this country are headed for. Spending MUST be cut but it won’t be because everybody is protecting their own rice bowl. Once you accept the principle that it is moral to live off of the productions of others it is only a matter of time and the perseverance of those being looted to keep on producing. Just think if we keep on going on like we have for the next 4 years the deficit will be 20-21 billion.
Our possible future...
We still have a chance to avoid this, but at the rate we are going, the window of opportunity is shrinking ever smaller at a rapid pace. Even balancing the budget tomorrow still leaves the $16 trillion debt with compounding interest which will eat up larger and larger shares of the annual budget if this trend is not reversed...all of that money could have spent on other things.
Even cutting can't help if you have this there to swallow up the savings you get. Trying to balance the budget can't help you if the existing debt compounds to swallow up the savings from cuts to normal spending. It is spiraling out of control.
Just once I'd like to see the hard data.
Like, ten years of inflation adjusted per capita government spending, all lined up in a nice straight column so we can see if this “Austerity” claim is real, or just political fiction.
And the constant “threat” that some country or other will leave the Euro is completely bogus.
No country will EVER voluntarily leave the Euro.
They will have to be expelled.
Why would any country go back to its own worthless currency?
They can accomplish exactly the same debt relief INSTANTLY by DEFAULTING on their Euro denominated loans.
We're just not next, we are already there, thanks to Obambi and his ilk, and the spineless GOP.
Spain has less debt than the US per capita. Thanks to Comrade Zero. What’s killing Spain is that they are paying 6 percent on their debt instead of 1.5 percent.
Imagine what would happen if the interest rates on US debt were to rise?
Prayers for Spain
In good times as well as in bad times we as a nation have been eating our seed corn.
Spain has less debt than the US per capita. Thanks to Comrade Zero. What’s killing Spain is that they are paying 6 percent on their debt instead of 1.5 percent.
Imagine what would happen if the interest rates on US debt were to rise?
The reality is that the entire Western world (including Japan) is screwed. We are on the same path to buying our own debt with $$ created out of thin air. And we do it because of the Social upheaval that would occur if we cut entitlements. Politicians fear it. Even so, the ultra low interest rates we have to day are a tax on the productive so the Government can redistribute cheap $$ to the unproductive.
20-21 billion dollars of debt would be heaven, but we all know you meant “trillion” numbers we can’t even imagine and that our grandchildren will curse us for.
“Even so, the ultra low interest rates we have to day are a tax on the productive so the Government can redistribute cheap $$ to the unproductive.”
It’s coming - and we aren’t all that far off.
Coming? Its already here.
Why should people like you be responsible for paying back that debt when you had no hand in creating it? If your neighbor buys a house, a yacht and five luxury cars and runs up $5 million in debt, I wouldn’t expect you to pay and make the lenders whole.
Why pay for the welfare payments of others? The extravagent pensions of public employees? Socialized medicine, mortgages, student loans and auto workers?
Because we did not work hard enough to prevent what the socialists in the United States of America succeeded in accomplishing.
In fact, they are forcing us to pay it.
yitbos
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