Eurozone: Crisis or not?

[Brother None]

This isn't really a gold value thread, guys. Just...y'know....just saying, the topic was supposed to be the Eurozone crisis.

 

[Kari]

Hi all!

I'm worried about recent opinions of people i've read from several newspapers website comments. People seems to think, that rich people are cause of this crisis as they hog all money to themself. I don't think it is away from me, if someone gets rich. Instead i see rich people as good customers, that pay bills i write for them without asking questions, except those Scrooge McDucks, that die in starvation with fortunes in pockets. Also they have money for establishing new companies where i could be employed. However, no one seems to have money and i'm poor and unemployed.

People are getting more unhappy and i have feeling, that we might have something unusual happening in some years.

I think it could be "Soviet Union, resurrection in west". Well... that was exaggregated, but somehow this situation seems ominous. Im not saying that revolution will happen, but there could be risk of that happening in some form. I didn't notice this "Marx spirit" in air few years ago. Also people could be more prone to radical political movements now.

Also i think that we are soon on dead end with Greece. Economy there was working with loan money and public sector is big. Now all of sudden that big public sector should be minimized and people should be employed to private sector. That could be done, but i think it will take long time. Now it should happen immediately and disaster follows. Also people should change way of thinking there and recent election proved they dont support this economical operation. Lots of money will be lost and economy won't still work there. Let's still hope i'm wrong.

I'm different and say straight, that i still don't have any idea, what should have been done instead. All choices are so bad.

Now we see, that this EMU thing is quite vulnerable. I believe that Italy and Spain will get things working again.

 

[Sander]

Edit 2: The rich are, actually, taxed more than ever nowadays. According to an economy 101 lecture by Prof. Timothy Taylor, in 1980 the top quintile of income paid 56.3% of all taxes in the US. In 1990 this was up to 57.9%, by 1995 the top quintile was paying 61.9% of all federal taxes. By 2000 the top quintile was paying 66.7% of all taxes. That dropped of a bit in 2002 after the tax cuts in 2001, when it was 64.8%.

If you look at the top 5% of income, they were paying 37.3% of all federal taxes as of 2002. I'm with Taylor here when he states that, he's not against the rich paying more, but compared to the 1980's and the Reagan years, they are paying a larger share of taxes. And it wouldn't be right to say that they're paying a historically low share of taxes.

Looking at their total share in taxes is pretty inaccurate. You're not actually measuring how much of their income they're paying in taxes, just how much of the nationwide wealth/income is theirs. Inequality has been growing for decades in the USA. The result should naturally be that the rich pay more taxes in an absolute sense, but that doesn't mean they are being taxed more in a relative sense.

It's much more productive to look at the economy and income equality as a whole, in which case the picture is a lot less rosy.

 

[valcik]

I'm worried about recent opinions of people i've read from several newspapers website comments. People seems to think, that rich people are cause of this crisis as they hog all money to themself.

In fact, trouble started in 2007 when an American real estate market have collapsed. Thousands people of America were dreaming their American dream about an own house, taking highly risky hypothecary debts. A lot of this people were unable to pay their debts due to various reason pretty soon. When the American market collapsed, European Central Bank was hit by weakened world economy in 2008.

 

[AskWazzup]

Could you really call it a Euro crisis, when the whole economy is pretty global now. Sure the EU countries have a bunch of problems, but so do every other country in the world, because they run on similar economic models. If there will be a real EU crisis, the world will follow.

In any case, i think we will see cycles upon cycles of worldwide economic crisis, with the way we are living right now - burning up too many resources very inefficiently, so to provide a living standart that we cannot upkeep in the long run with the way things work now.

 

[Tagaziel]

Could you really call it a Euro crisis, when the whole economy is pretty global now. Sure the EU countries have a bunch of problems, but so do every other country in the world, because they run on similar economic models. If there will be a real EU crisis, the world will follow.

In any case, i think we will see cycles upon cycles of worldwide economic crisis, with the way we are living right now - burning up too many resources very inefficiently, so to provide a living standart that we cannot upkeep in the long run with the way things work now.

This is another point people often ignore or forget. The economic recession is global, which is one of the reasons behind the current problems of the Eurozone.

On topic, although I see how ejecting countries from the Eurozone might be the best solution in terms of finances, I'm not sure if this is the best solution politically: such an action would severely undermine the trust in the European Union and its main players. I believe a solution of similiar effectiveness can be reached, that can be also politically viable, or even encouraged. As BN suggested, this may be the establishment of a stronger central oversight body for the Eurozone and related fiscal matters. I think this'd mesh in nicely with the improved framework estabilished in 2007 by the EU treaty.

 

[DammitBoy]

Inequality has been growing for decades in the USA. The result should naturally be that the rich pay more taxes in an absolute sense, but that doesn't mean they are being taxed more in a relative sense.

It's much more productive to look at the economy and income equality as a whole, in which case the picture is a lot less rosy.

How has taking more and more of the peoples money in taxation worked out for europe so far? lol

 

[TheGM]

Do rich people and corporations get welfare checks in Europe like they do in the States?

 

[Tagaziel]

How has taking more and more of the peoples money in taxation worked out for europe so far? lol

We're the largest economy and market in the world, in terms of PPP-adjusted GDP. And Sweden, which imposes very high taxes, boasts one of the stablest economies worldwide - and one of the highest quality of life ratings.

 

[incognito]

Gold has no intrinsic value. Like money, the only value it has is the value people give it.

Gold has value it is used as a hedge in bad times, against inflation in a sense locks your value. I do not know why sander think that i meant that gold is constant it is not, It is stable has been through recorded history. the low point in the year 2000 is historic anomaly.

The 1920s would like to have their retarded, discredited economic ideas back.

No you mean get 1970s idea back, else i do not know what you mean. (unless you referring to infusion of capital that created the great depression also named "the roaring 20s")

Also, Robert Wenzel isn't actually a credible authority on economics, he's just a dude with a website and some crackpot theories based on the idea that markets are inherently efficient (no, they are not).

Dude wtf man, he is prominent guest invited to the fed it self and you call him a crackpot? So if Joseph Stiglitz comes to your town hall you gonna trow him out?

 

[Stanislao Moulinsky]

Considering Italy still isn't used to being a country and parts of it threaten civil war every other week I'm sure it wouldn't take much.

Those are just empty threats made to appeal to the people idiot enough to believe them.

Italy will never split, at least not in my lifetime and not until the proverbial shit hits the fan. We are just too lazy.

Also tax the rich. A lot.

Tell that to our ex-Prime Minister and leader of the biggest political party in Italy, which coincidentally is also a multi-millionaire industry tycoon. Strangely he doesn't share your idea.

I can't speak for the rest of the EU - I'm not really all that familiar with their tax systems - but at least in Belgium, it's reached a breaking point.
The Financial Times (IIRC) put Belgium just below Barbados in the countries where it's best living when you're rich, hell when you're working class. I'm currently still being paid a wage, which in my tax bracked (and I'm not in a particularly high one by far) 56% of my total wage costs go to the government, another 2% to municipal level. Which leaves 42% of my wage for me. 42%! 42! Can you imagine such a thing? When one takes stuff like VAT and 'indirect' taxes (car, taxes paid immediately on stuff like gasoline, cigarettes, insurance, etc.), my 'net' spending power drops to something like 30% of my gross income. It's ridiculous. And then they wonder why almost no-one under 35 can't buy a house without *substantial* help from their elder family members.

What this leads to is a society that doesn't spend its money. My g/f and I, and most people of my age I know, desperately try to spend as little as possible in order to save to buy a house someday.

Are you sure this isn't a description of Italy? Oh wait, no. Our taxation is "just" 45%.

 

[Knight Captain Kerr]

I have heard people say Ireland should leave the EU. However EU membership has been very beneficial to Ireland. Pulling out would make matters far worse.

 

[Ilosar]

How has taking more and more of the peoples money in taxation worked out for europe so far? lol

How has having the biggest debt in the world and having millions of people eat on government food stamps worked for the US so far?

 

[zegh8578]

I'm reminded of a pal from another forum, who tends to drop by these kinds of debates, drop "execute the ultra-rich" for then to leave again.

That's the thought that always returns to me, ultimate responsability to the crisis comes down to, well, the "ultra rich". Then people successfully manipulated by the propaganda-machine goes on the offense "Oh, so if you're so against mass consumerism, why don't you just move into the woods then?"

Well, there's a middle ground between wanton out-of-control mass consumerism, and living in the woods eating roadkill.

We should take a lesson from the PRC: As much as they also allow for some corruption and tax-evasion among the rich, they DO make examples out of many of them - where we, the west, tend to simply reward them.

 

[warbon]

There really is that time that the area and the economy does not seem to be in a good economic stature but looking at it plainly, I would not think they are that affected of it. For one, they were still able to host the first leg of the EU F1 races with Spain yesterday. If the meltdown were to be of great risk, I would not be surprised if they did not proceed yesterday but it was a good go.

 

[Jebus]

How has taking more and more of the peoples money in taxation worked out for europe so far? lol

A major problem, at least in Belgium, is that taxation is very badly distributed. The middle in Belgium is very, very squeezed.
It's rather like in the USA, really. While this has always been the case in Belgium, the EU's Anglosaxon economic policies has made the situation much, much worse.

 

[Joelzania]

How has taking more and more of the peoples money in taxation worked out for europe so far? lol

A major problem, at least in Belgium, is that taxation is very badly distributed. The middle in Belgium is very, very squeezed.
It's rather like in the USA, really. While this has always been the case in Belgium, the EU's Anglosaxon economic policies has made the situation much, much worse.

Hey, at least I can break my leg and get it repaired for free!

 

[DammitBoy]

How has taking more and more of the peoples money in taxation worked out for europe so far? lol

How has having the biggest debt in the world and having millions of people eat on government food stamps worked for the US so far?

Emulating europe has pretty much screwed us, except for the fact that we have the worlds dominate naval force, so the rest of the world is forced to use our currency as the global standard.

In the meantime, any stable successful member of the EU will get sucked down the toilet along with the many, many unsuccessful loser countries they have tied their fates to...

----

Hey, at least I can break my leg and get it repaired for free!

Thanks for providing the exact reason why the EU is screwed. There is no such thing as free. Someone had to contribute their income to provide the non-contributor with "free" medical care. The EU's problem is there are a lot more willing to take while providing nothing of value in return.

Joelzania's idea that he is entitled to free things and that medical care is free is the sort of ignorance that will lead to the EU's downfall.

 

[Crni Vuk]

well are we again at this "USA! USA! USA! - Screw Europe" discussion?

Its not like the US hasn't their own problems or facing issues. Just like ... the rest of the World? Sheesh. When was the last time you did a trip to the Rust Belt DB? Third world country right in front of your door.

 

[Sander]

Emulating europe has pretty much screwed us, except for the fact that we have the worlds dominate naval force, so the rest of the world is forced to use our currency as the global standard.

Actually, no. The economic crisis was in no way caused by 'emulating Europe' or by anything do with social security. The economic crisis was caused by a complex system of financial incentives in the financial and mortgage markets - caused by deregulation and the creation of complicated derivatives and insurances on those derivatives.

Emulating Europe? Nothing to do with anything.

Thanks for providing the exact reason why the EU is screwed. There is no such thing as free. Someone had to contribute their income to provide the non-contributor with "free" medical care. The EU's problem is there are a lot more willing to take while providing nothing of value in return.

And again, not the issue in Europe at all. Lots of issues in the Euro zone. That? Not one of them.