The euro is going to have to die for Europe to get it's fiscal house in order. Until that happens, France really doesn't have much say in how much longer it will be carrying PIGS
Also huge lol at calling Japan's outlook merely bleak. This is a country that has a debt of 225 percent of GDP. So that balanced budget by 2020 must really be easing investors' fears of only having 250 or 300 percent debt to GDP.
The U.S. government could literally borrow the money to give every citizen $5,000 tomorrow and still have less debt to GDP than Japan.
And it's a spending an revenue problem, stupid. I know it's hard to fathom that in socialist America we have certain safety nets, and in times of recession those safety nets are used much more heavily than in the boom times so government expenditures grow while revenues decrease leading to massive deficits.
This is why "Reagan proved deficits don't matter," is a load of bullcrap. This relies on the same mentality that bankers had in lending to anyone with a pulse. I would entirely agree with the statement if there was some magical way to guarantee 4 percent growth a year, then there's no problem borrowing an extra 3-3.5 percent.
To solve this problem taxes have to be raised, spending must be cut and both must be done in a responsible manner.
Seems far more likely that weaker economies will flee or be shown the door by the Eurozone rather than the rest allowing the Euro to die. Europe can repair its problems with something far less than the death of the Euro.
Interesting point on Japan's debt:GDP ratio. We're presently sitting at around 105% of GDP (including the most recent borrowing) with Obama having added around 16% of GDP per year to our outstanding debt (the US debt:GDP ratio was around ~65% when he entered office). Should he be reelected, choose to double down on his failed policies and see debt accrue at a similar rate, the US national debt would be just under 195% of GDP when he leaves in 2016. If that happens there's be a very real chance that by 2020 our national debt could look an awful lot like that of Japan. The most significant difference being that Japan is on a glide path towards a balanced budget by 2020 while Obama projects trillion+ dollar annual deficits for the US indefinitely. Thus in the mid-term Japan seems to be a better bet than the US since they're at least on track to arrive at 250% of GDP with a balanced budget while we're on track to arrive at a similar level while still adding massively to our debt on an annual basis forever. Thanks for bringing that up.
I've no problem with "safety nets" for, say, the poorest 1% of the population. But when 50,000,000+ are on food stamps it's no longer a "safety net", it's middle class welfare. Ditto Obamacare's subsidy of health insurance for those up to 400% of the poverty line. Ditto SS & Medicare that are unsustainable in their present forms. Ditton an awful lot more of what the federal government does. The entitlements need to be curtailed & modified structurally, if the US can't do that economic collapse is inevitible no matter the tax rate or whatever other reforms might be attempted.
On the tax side I'd like to see the lefties put their money where their mouths are: propose a wealth tax that confiscates a percentage of net worth beyond certain levels. It'll be heinously destructive but probably less so than making even more progressive what is already one of the world's most progressive income tax systems (or adding a VAT which kills the middle class) and it has the added benefit of taxing wealth rather than productivity or consumption so we don't punish the productive for their productivity or consumers who support our economy, just those who already have "too much". Why aren't lefties talking about taxing the already-rich rather than the trying-to-get-rich? Never really understood that.
The third leg, and probably the most powerful one in the short term, is economic growth. Pro-growth policies that don't touch taxes or spending (much) might include eliminating the most economically destructive federal agencies and all of the rules & laws they enforce. The EPA is certainly the worst offender probably followed closely by the Dept. of Labor. Kill those and a few more like them and we can probably kick the tax/spending can down the road quite a ways further. Heck, even Jimmy Carter, moron that he is, understood the power of deregulation.
