Tag Archives: Europe

Top academic warns of collapse of European economy

From the SA Times Live web site – top academic warns of economic collapse in Europe. (H/T Mary)

Excerpt:

Dennis Lachman, a professor in economics at Georgetown University and a resident fellow at the American Enterprise Institute for Public Policy Research, said at a conference on monetary policy and financial stability at the Reserve Bank on Thursday he has little doubt about this.

“The only question is how long the governments in the northern part of Europe can keep kicking the can forward by financing a trillion dollars here and a trillion dollars there to keep the party going for a little bit longer.

“We are talking about a currency arrangement that was flawed from the start.”

Lachman said the default of Greece or Ireland by the end of next year was another certainty.

“The important thing is that we are not talking about problems only in Europe’s periphery; we are talking about problems in the European banking system.

“Their inter-linkages with the European banking system makes this of concern. It is not only for the European economy, but what we have learned from the Lehman (Brothers) debacle and the sub-prime debacle is that these kinds of crises have a habit of being global in scope.”

Lachman said at the end of 2009 the exposure of French banks to the so-called PIIGS countries (Portugal, Ireland, Italy, Greece and Spain,) was around 37% of France’s gross domestic product. For Germany the exposure is 21% of GDP.

A write down of the debt of these countries would thus result in a shock for economies that haven’t fully adjusted to the Lehman shock, he said.

A euro crisis would coincide with the US economy either double-dipping or flirting with a double-dip, Lachman said.

I found two related videos on Verum Serum.

Austerity measures:

Rioting in Ireland:

The good news is that Americans have voted to avoid this dismal fate by electing Republicans. But we’re not out of the woods yet. But it’s definitely a good time to reduce your spending and start saving for a rainy day, and making a plan.

I’m struggling right now, because this is all happening too fast and my plan requires at least 3 years to execute… GAH! I didn’t expect this would happen so fast. I hope the House Republicans can put the brakes on the spending.

The relationship between government spending and immigration

Political Map of Canada

Mark Steyn is one controversial Canadian. Here is a summary of his concerns about government spending, immigration, multiculturalism and Western civilization, from Canada’s national newspaper – the National Post.

Excerpt:

Rates of public spending growth here in Canada, meanwhile, are only sustainable if we permit mass immigration, given that Canadian birthrate declines are more drastic than even America’s (where they hold, for now at least at roughly replacement levels). These days, that immigration comes from Muslim countries, something that has caused severe social unrest in European countries that have relied on a similar model.

“In the space of about 20 years, the Muslim community went from really nothing to overtake the well-established Jewish community in Toronto. And the idea that that’s simply just one more interesting exotic item in the Canadian salad bar—we would be extremely lucky if that were the case.”

Amsterdam, among the most liberal cities in the world, he points out, is suffering an epidemic of gay bashing from unassimilated Muslims. In Sweden, perhaps Europe’s most tolerant country, half the Jewish population of Malmo has fled after a sharp rise in Islamic anti-Semitic attacks.

“I was in Malmo a couple of weeks ago,” he says. “It’s future is as a Muslim city.”

That he considers Muslim fundamentalists an unwelcome element in liberal society is the kind of thing that gets Mr. Steyn so readily branded as a bigot, particularly in Canada where a worship of his most hated term “multiculturalism” has, he says, utterly shrivelled the limits on public discussion. That may, however, only prove his point.

“It’s a sick fetish,” he says. “The idea that multiculturalism simply on its own terms is a virtue in itself is completely preposterous.”

What the fact that 75% of Canada’s population growth relies on immigration says “in effect, is that tomorrow’s a crapshoot; tomorrow is whoever happens to turn up.”

When Immigration Minister Jason Kenney suggests, as he did this week that Canadians can choose between higher immigration levels, or having more children, he leaves out one option: for Canadians to stop spending at a rate that demands population growth. In any case, Mr. Steyn says, the fact that most immigrants bring behind them older or unproductive family members is just a way to “kick the can 10 years down the line and ensure there’s an even bigger population making demands upon the state for which you’ll have to bring in even more people.” Eventually, the pyramid scheme runs out. We are, he says, engaged in nothing less than “civilizational suicide.”

An interesting story just came to a conclusion in Canada. A Canadian-born Muslim was captured on the battlefield in Afghanistan while fighting Canadian soldiers. In Canada, Muslim men can marry four women who will all collect wefare. The article raises questions about whether the women entered the country legally. The same thing happens in the UK, according to the article. (In fact, there is an epidemic of rapes by Muslim gangs in various countries who justify their raping by same that the non-Muslim women are not dressed to proper Islamic standards.) Some work needs to be done to acclimate immigrants to Western standards of conduct.

A policy of preferring skilled immigrants might help prevent the problem of radical immigrants, but that’s not the policy favored by the left – they want unskilled immigrants because unskilled immigrants tend to vote for bigger government, more wealth redistribution, higher taxes and more control of business. These policies are put in place by the left in order to buy votes from those who like to collect government handouts. In fact, the left opposes immigration of skilled workers, since they are more likely to vote for lower taxes and limited government. I think we could be very open about legal immigration – but then we have to make immigrants responsible for paying their own way and following the laws of the land.

What can we learn from Europe about big government?

From Ace of Spades. (H/T ECM)

Excerpt:

We see our future playing out in England and France right now. Only our upheavals are going to be much larger and more violent than theirs. Our population is larger, more diverse, and more polarized; our politics more fraught; our debts and obligations massively larger. Our passions are harder to rouse, but once aflame, take a long time to burn out.

As in France, we have let an enormous segment of our population — perhaps as much as half — fall into a state where they depend on government largesse for a substantial part of their income. This is not money they earned themselves, not wages or savings, but rather money squeezed from the more productive half of the country. Half of our citizens pay no income taxes at all. An increasing number will draw public-sector pensions, Social Security, and medical insurance (Medicare/Medicaid) in amounts that far exceed what they contributed to those plans. Half of the US population, in short, lives not by the fruits of their own toil but by the (coerced) charity of others, as filtered and distilled through the hand of the government. This can not — it can not, by the laws of economics and simple physics — continue. The mathematics of the problem trump even philosophical issues of fairness, of governance, of ethics or law. The mathematics simply will not allow it.

Consider the French. They are rioting over a proposal to raise the national age of retirement from 60 to 62. Germany’s is 65 (going to 67) — how happy will German workers be to subsidize the early retirements of their French neighbors? The French labor unions are on a rampage, denouncing the move as a violation of a “promise” the country made to the workers. (If this reminds you of California, New Jersey, New York, and Michigan — well, the situations are closely analogous.) The word “promise” is illuminating: people have stopped thinking of social welfare as a “benefit” or a “perquisite”, and have begun instead to think of it as a “right” or a “promise”. A legally-binding promise which cannot be broken, though the heavens fall. Well, the heavens are falling, and the sovereigns will discover a universal truth: a government “promise” is not a suicide pact. Reality will assert itself, one way or another.

Governments the world over are discovering that the river of money is not endless. That seemingly-inexhaustable mountain of wealth has been turned into an ocean of debt that will take decades to pay off. The spendthrift habits of the Western nations will put burdens on our children, and other generations not yet born, that should outrage us as a people. We are investing in the old rather than the young, and are punishing risk-taking and entrepreneurship rather than rewarding it. Our tax regimes seem to be deliberately crafted to kill innovation and long-term thinking. (What does “legacy” mean if the wealth I have accumulated in my life cannot be passed on to my children or heirs, but is instead eaten by the all-consuming government?) Young people — young families — are the foundation upon which Western Civilization is built. Neglect them, overburden them, cheat them, and you are committing societal suicide.

This is what the House Republicans have to stop Obama from doing. This is what is at stake.