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I'm sorry, but that is completely irrelevant to the situation in Spain, which among other things just suffered a housing bubble that almost makes the one in the

by uriel 15y ago

I'm sorry, but that is completely irrelevant to the situation in Spain, which among other things just suffered a housing bubble that almost makes the one in the US look like child's play. The employment market and other aspects of the Spanish economy are stuck in the middle ages. Surprisingly, the big Spanish banks were mostly responsible and have done better than banks in other countries, but the rest of the economy is bust because half was in the construction sector and the other half was is the government sector, you can't have a viable economy like that, you need private productive industries, and for that you need to make it possible for people to start new business and properly run existing business.

lyudmil 15y ago
Well the construction sector is nothing like half of the economy (16% of GDP, 12% of employment before the crash). Still, if you have 16% of your economy collapse, you will have severe problems. However, the reason why it collapsed is the same reason it collapsed everywhere else in Europe - there was no financing. Your point simply doesn't contradict mine, except for your assertion that the private sector is the only way out. The private sector cannot currently be the solution because the money it depends on are in banks as I pointed out before. Banks aren't lending because of the problems on their balance sheets. The government, on the other hand, can print money and is the only institution that can do so, so it is your only option. My evidence in support of what I'm arguing is Germany, whose government intervened to stimulate the economy and currently has had less of a drop in employment than the US even though its GDP fell more. Work-sharing is the most prominent, and probably most successful, program in that regard. NOTE: I'm not arguing this is sustainable forever. What I'm arguing only applies to the current situation, which is anything but normal.

by uriel 15y ago

lyudmil 15y ago

Well the construction sector is nothing like half of the economy (16% of GDP, 12% of employment before the crash). Still, if you have 16% of your economy collapse, you will have severe problems. However, the reason why it collapsed is the same reason it collapsed everywhere else in Europe - there was no financing. Your point simply doesn't contradict mine, except for your assertion that the private sector is the only way out. The private sector cannot currently be the solution because the money it depends on are in banks as I pointed out before. Banks aren't lending because of the problems on their balance sheets. The government, on the other hand, can print money and is the only institution that can do so, so it is your only option. My evidence in support of what I'm arguing is Germany, whose government intervened to stimulate the economy and currently has had less of a drop in employment than the US even though its GDP fell more. Work-sharing is the most prominent, and probably most successful, program in that regard. NOTE: I'm not arguing this is sustainable forever. What I'm arguing only applies to the current situation, which is anything but normal.