Leftist Failure - The EU is on brink

[jem]

http://www.breitbart.com/Big-Peace/...ses-Europe-to-Run-out-of-Other-People-s-Money

DEFLATION CAUSES EUROPE TO RUN OUT OF OTHER PEOPLE'S MONEY

European elites are panicking over a report in the Financial Times of London titled "Data Deepen Eurozone Deflation Fears." With government spending at 50% of the gross domestic product, the 28 countries of the European Union have pursued economic policies that generate inflation to spike tax collections by pushing their citizens into higher progressive tax brackets. Having stifled economic growth and used inflation to tax away prosperity, European elites should panic.
Both Europe and America cranked up government spending and intrusion into their private sector economies to supposedly cushion the Great Recession’s misery and stimulate growth. Both modestly increased unemployment and welfare payments to individuals. However, whereas most of the European stimulus cash simply expanded government ministries, in the U.S. the money was contracted out to the private sector.

 

[wjk]

The big question is...what will the ECB do this week? They going negative on rates, or doing nothing? Will they QE? Funny how Yellen came out with a dovish statement so close in proximity to the inflation-lower-than-expected report (maybe to lower the dollar and inversely raise the EURUSD to soften the blow from a selloff if ECB acts? I'd have to assume the fed and the ECB are in kahootz:eek. Actually, I'm not a conspiracy theorist, but I am in a EURUSD play. Not going to say if I'm long or short going into thu. You'll know be the tenor of my posts later in the day.

 

[Martinghoul]

http://www.breitbart.com/Big-Peace/...ses-Europe-to-Run-out-of-Other-People-s-Money

DEFLATION CAUSES EUROPE TO RUN OUT OF OTHER PEOPLE'S MONEY

European elites are panicking over a report in the Financial Times of London titled "Data Deepen Eurozone Deflation Fears." With government spending at 50% of the gross domestic product, the 28 countries of the European Union have pursued economic policies that generate inflation to spike tax collections by pushing their citizens into higher progressive tax brackets. Having stifled economic growth and used inflation to tax away prosperity, European elites should panic.
Both Europe and America cranked up government spending and intrusion into their private sector economies to supposedly cushion the Great Recession’s misery and stimulate growth. Both modestly increased unemployment and welfare payments to individuals. However, whereas most of the European stimulus cash simply expanded government ministries, in the U.S. the money was contracted out to the private sector.

That's a silly article. EU unemployment didn't increase modestly, it increased massively (nearly 2x). Welfare payments to individuals in the Eurozone didn't increase. European stimulus didn't expand govt ministries. In fact, govt spending in the Eurozone has been going down since the crisis, which is a result of austerity imposed by pretty much every single sovereign within the Eurozone (with the exception of France). Most importantly, throughout the post-crisis period the US federal deficit as a %age of GDP has been higher than that of the Eurozone. So sure looks like it's the capitalist US with the free media and all that's running out of other people's money faster than the socialist Eurozone.

The author is rather confused here, methinks...

 

[exGOPer]

The author is rather confused...

It's Breitbart, what did you expect. The very same bunch kept predicting a Romney landslide till reality hit them in the face.

 

[Ricter]

It's Breitbart, what did you expect. The very same bunch kept predicting a Romney landslide till reality hit them in the face.

Ad hominem. It is possible that despite their past track record they could be right again. Not this time, but... you get my point. ; )

 

[Tsing Tao]

That's a silly article. EU unemployment didn't increase modestly, it increased massively (nearly 2x). Welfare payments to individuals in the Eurozone didn't increase. European stimulus didn't expand govt ministries. In fact, govt spending in the Eurozone has been going down since the crisis, which is a result of austerity imposed by pretty much every single sovereign within the Eurozone (with the exception of France). Most importantly, throughout the post-crisis period the US federal deficit as a %age of GDP has been higher than that of the Eurozone. So sure looks like it's the capitalist US with the free media and all that's running out of other people's money faster than the socialist Eurozone.

The author is rather confused here, methinks...

I am forced to agree with the Ghoul here. With few exceptions, of course, Europe is more austere than the US by orders of magnitude. However, I would add that this is because they are further along the path than we are. We will eventually go that way.

 

[TGregg]

I am forced to agree with the Ghoul here. With few exceptions, of course, Europe is more austere than the US by orders of magnitude. However, I would add that this is because they are further along the path than we are. We will eventually go that way.

Of which one measurement would be debt-to-GDP. The US is probably, what? ~102%? What's Europe running if you summed it all up then calculated the ratio?

 

[Ricter]

Of which one measurement would be debt-to-GDP. The US is probably, what? ~102%? What's Europe running if you summed it all up then calculated the ratio?

Around 90%.

 

[Martinghoul]

Of which one measurement would be debt-to-GDP. The US is probably, what? ~102%? What's Europe running if you summed it all up then calculated the ratio?

Using the IMF figures, Eurozone is arnd 96%, US arnd 106% (gross, rather than net).

 

[Ricter]

Inflation. Deflation. Disinflation. The Threat to Europe? Lowflation
By Simon Kennedy Apr 1, 2014 6:07 AM MT

"For all the fears of a Japan-style era of deflation, a more likely threat for Europe is what International Monetary Fund officials are calling lowflation.

"A sustained period of ultra-low, albeit rising, inflation still has the potential to destroy output, hurt hiring and revive memories of the recent fiscal crisis by hammering the ability of governments to repay debts. With data yesterday showing inflation about a quarter of the European Central Bank’s goal of just below 2 percent, President Mario Draghi is under pressure to respond.

“It is imperative to return inflation to the target as quickly as possible,” said David Mackie, chief Western European economist at JPMorgan Chase & Co. in London. “The ECB needs to acknowledge having low inflation for a long time isn’t neutral.”

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