Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

Spain Is Doomed: Why Austerity Is Destroying Europe
The Atlantic ^ | Apr 18 2012, 10:00 AM ET | Matthew O'Brien - Matthew O'Brien

Posted on 04/18/2012 7:43:02 AM PDT by ctdonath2

Let's try a thought experiment. Imagine you walked into the bank, told them you were going to be taking pay cuts for the next few years, and then asked for a loan. You'd be laughed out of the office or else pay an interest rate so high that "usurious" wouldn't do it justice. The logic is simple: If you're in debt and your income is shrinking, it's mighty hard to pay back what you already owe.

... Nearly a quarter of Spain's population is unemployed. Half of its youth are out of work. And it's only going to get worse. Spain is supposed to trim its deficit by some 5.5 percent of GDP over the next two years. That's not a recipe for growth. Just ask the IMF, which downgraded its projections for Spain's economy back in January.

What matters for a nation is its GDP. That's a country's equivalent of personal income. If Spain's GDP is set to fall for the foreseeable future -- and it is -- then who would want to lend to Spain?

(Excerpt) Read more at ...

TOPICS: Business/Economy; Foreign Affairs
KEYWORDS: eucrisis; europe; gdp; globaleconomy; imf; socialists; spain; spaincrisis
Navigation: use the links below to view more comments.
first previous 1-5051-64 last
To: ctdonath2
The real difficulty is that the bleeding can't be stopped, but it can be slowed just a little...through the next election. The patient still exsanguinates, but it's on somebody else's watch.

That game is particularly insidious in the U.S., where European investors looking for a less hazardous arena have managed to help create an illusion of prosperity we haven't earned. We aren't immune, we're in the soup up to our necks.

51 posted on 04/18/2012 10:06:42 AM PDT by Billthedrill
[ Post Reply | Private Reply | To 1 | View Replies]

To: Nervous Tick

You are correct, of course, but a government chosen by universal franchise voting cannot and will not do what is necessary.

Significant cuts have not happened in any country with a popularly elected government since 1945. That is sufficient evidence to say that it is impossible.

I don’t know how this ends, but I DO know that voting by parasites isn’t going to get it done.

52 posted on 04/18/2012 10:43:51 AM PDT by Jim Noble ("The Germans: At your feet, or at your throat" - Winston Churchill)
[ Post Reply | Private Reply | To 5 | View Replies]

To: ctdonath2
If you disregard the capitalism-is-doomed b/s at this site, they give you some below-the-radar info not found in the US media.

Financial turbulence mounts as global economy slides deeper into slump

As others have posted, "It ain't gonna end well." Re-examine your SHTF preparations. (Just bought some hand-generated flashlights and radio.)

53 posted on 04/18/2012 12:11:47 PM PDT by Oatka (This is America. Assimilate or evaporate.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ctdonath2
Except at some point, it no longer matters.

Spain, and much of the Euro-zone, is in trouble. Either Germany and France bail them out, or let them fail. If they choose to bail them out, Germany will demand concessions that will not be acceptable to the rest of the EU. If they don't, the PIIGS will start leaving the EU.

The Fraco-Prussians got their dream, a United States of Europe. Lets see if they really want it now.

54 posted on 04/18/2012 12:16:17 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: mamelukesabre
The argument can be made that automation got us into trouble. There is a portion of the population that does not have the skill or IQ for a higher level job, and that typically meant factory or farm work. As those have declined because of automation, you are left with a lot people who are not equipped to hold the remaining jobs.

What do you do with them? What for the mass uprising?

There isn't an easy answer.

55 posted on 04/18/2012 12:28:04 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
[ Post Reply | Private Reply | To 11 | View Replies]

To: LucianOfSamasota

Sorry, I haven’t read any of Galileo’s work. I found the qoute somewhere on the internet. It is edited to fit in the allowed tagline space. It’s possible it was a verbal statement at one of his trials.

56 posted on 04/18/2012 12:41:23 PM PDT by norwaypinesavage (Galileo: In science, the authority of a thousand is not worth the humble reasoning of one individual)
[ Post Reply | Private Reply | To 14 | View Replies]

To: redgolum

There isn’t an easy answer.

Sure there is

Accelerate the increase in automation.

Doing so will increase output per human being and increase wealth per human being and increase average standard of living. Sure, many of those people will have meaningless jobs and maybe will only do an honest 2 hours work per day, but it will still work out ok as long as overall average productivity per human being continues to increase. The alternative is to reduce standard of living or continue on business as usual until the eventual collapse.

Its not a life I would want...I mean having one of those meaningless jobs where you don’t really have much to do all day. I don’t get along with people in jobs like that because I have no ability to communicate with them. They place value on a completely different set of skills than what I have.

But, that is our destiny like it or not, unless we are ok with going backwards and letting some other culture take the lead.

57 posted on 04/18/2012 1:01:29 PM PDT by mamelukesabre
[ Post Reply | Private Reply | To 55 | View Replies]

To: mamelukesabre

Your not thinking this through.

What would we do with those people? Why would I hire them, pay them enough to support themselves, for two hours of meaningless work?

The trend has been the other way.

58 posted on 04/18/2012 1:20:12 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
[ Post Reply | Private Reply | To 57 | View Replies]

To: redgolum

I’m talking about spain. In europe they only work 30 to 35 hours a week anyway.

second, you wouldn’t be hiring anyone. I’m talking about mega factories with robots running around. You don’t have what it takes to compete in this field.

59 posted on 04/18/2012 1:30:23 PM PDT by mamelukesabre
[ Post Reply | Private Reply | To 58 | View Replies]

To: ctdonath2


Yeah cutting the spending is killing the budgets!


They more you buy the more you will save!

60 posted on 04/18/2012 4:35:43 PM PDT by OlagJohnson
[ Post Reply | Private Reply | To 1 | View Replies]

To: mamelukesabre
Friend, I probably do know what you are talking about, and mega factories with robots still doesn't solve the issue of what do you do with the majority of people who will not be supporting those robots.

Spain, and lets be honest the US, tried to have a nice welfare system. Of course that just attracted more and more people until the system collapses. Now, there really isn't much for them to do. There aren't enough jobs to fill all the unemployed (Spain is much worse than us here), and there aren't enough people with the right skills to do the higher IQ managing jobs that full automation would need.

I worked for a Spanish engineering firm, and many of them were hard working (and partying). The firm preferred to hire Americans because they didn't expect the same benefits as EU citizens did, and they could fire them at will.

Again, what do you do with the people who are not skilled enough to have much higher than a traditional farm or factory job? If we don't start thinking about that, and soon, we will either have a vast underclass of non workers or civil unrest like the world hasn't seen for a hundred years.

The population is a bell curve. We have been pushing the jobs further and further to one side without thinking about the consequences.

61 posted on 04/18/2012 6:44:12 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
[ Post Reply | Private Reply | To 59 | View Replies]

To: redgolum

You’ve really touched on a key issue. In the new economy that’s evolved over the last few decades... With massive shifts to automation, and an increasing “knowledge work” and “information economy” or whatever other buzzwords they’re throwing around these days... What it finally comes down to is that there is a growing portion of the population that is simply unemployable— permanently.

The world still needs ditch-diggers and sweepers, but it doesn’t need so many of them anymore. It’s a thorny problem, and I can’t say I know the answer.

62 posted on 04/18/2012 7:37:58 PM PDT by Ramius (Personally, I give us one chance in three. More tea anyone?)
[ Post Reply | Private Reply | To 61 | View Replies]

To: ctdonath2

This guy wants them to ‘charge’ more?

63 posted on 04/18/2012 7:46:42 PM PDT by GOPJ (Hoodies - because you can't kill a security camera for snitchin' - - freeper tacticalogic)
[ Post Reply | Private Reply | To 1 | View Replies]

To: mamelukesabre
we can slowly get rid of govt employees thru attrition....we don't have to cut 50% of them, but what we must do is make a wide sweeping cutback in pay and benefits....say even a 10% cutback on wages, benefits....and even make the retired govt worker take a pay and benefit cut..

I'm just guessing but an immediate and wide spread cut of about 10% would probably keep the economy going, and a tax cut to boot would get the economy GROWING...JMO...

64 posted on 04/18/2012 11:37:27 PM PDT by cherry
[ Post Reply | Private Reply | To 11 | View Replies]

Navigation: use the links below to view more comments.
first previous 1-5051-64 last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson