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> Economically, Europe has been stagnating thats since 2008, when ECB and most of european governments have decided to go full Aysterity and cut all kinds of i

> Economically, Europe has been stagnating thats since 2008, when ECB and most of european governments have decided to go full Aysterity and cut all kinds of investments. Prior to this idiocy EU economy was actually larger than US economy. These ecents are notbrelevant to the taxation model, which predates them by decades

NeverFade 3y ago
The EU economy fell way below the US (after being roughly equal) because they were never able to compete in the new digital economy. All the big tech companies are American. You also have to ask yourself why the ECB and European governments had to cut spending. Perhaps because the levels before weren't sustainable? Perhaps because you can't just keep living beyond your means, as eventually you'll run out of other people's money?
- RandomLensman 3y ago
  It is now pretty much accepted that the European reaction to the financial crisis was massively worse than the American. A big and expensive error can have long lasting effects - perhaps no need for beyond means, digital etc. but that is rather a result not a cause.
  - Detrytus 3y ago
    The big and bad error that caused European bad reaction to the financial crisis was the introduction of common currency. Eurozone does not form Optimum Currency Area, under Mundell's definition (https://en.wikipedia.org/wiki/Optimum_currency_area https://en.wikipedia.org/wiki/Optimum_currency_area), so any significant crisis is made worse by "asymmetric shocks".
    - RandomLensman 3y ago
      I disagree with that, the policy errors where far more direct (and well analyzed). For example: poor bank recapitalisation, wrong incentives about balance optimization, ECB even raising rates in the beginning of the GFC
em500 3y ago
"Full austerity" is wildly hyperbolic. Here's EU government spending as share of GDP: https://tradingeconomics.com/european-union/government-spending-to-gdp https://tradingeconomics.com/european-union/government-spend... Try to click on MAX and spot when governments went "full austerity".
miguelxt 3y ago
What austerity? In Spain’s case, both debt to GDP and tax revenue to GDP ratios has been increasing since a decade ago. That’s the contrary of austerity.
- ClumsyPilot 3y ago
  tax revenue to GDO? how is that relevant to government cutting spending? I never said they've cut taxes. If economy collapses, state recenues drop, ofcourse debt will grow

NeverFade 3y ago

The EU economy fell way below the US (after being roughly equal) because they were never able to compete in the new digital economy. All the big tech companies are American. You also have to ask yourself why the ECB and European governments had to cut spending. Perhaps because the levels before weren't sustainable? Perhaps because you can't just keep living beyond your means, as eventually you'll run out of other people's money?

RandomLensman 3y ago
It is now pretty much accepted that the European reaction to the financial crisis was massively worse than the American. A big and expensive error can have long lasting effects - perhaps no need for beyond means, digital etc. but that is rather a result not a cause.
- Detrytus 3y ago
  The big and bad error that caused European bad reaction to the financial crisis was the introduction of common currency. Eurozone does not form Optimum Currency Area, under Mundell's definition (https://en.wikipedia.org/wiki/Optimum_currency_area https://en.wikipedia.org/wiki/Optimum_currency_area), so any significant crisis is made worse by "asymmetric shocks".
  - RandomLensman 3y ago
    I disagree with that, the policy errors where far more direct (and well analyzed). For example: poor bank recapitalisation, wrong incentives about balance optimization, ECB even raising rates in the beginning of the GFC

em500 3y ago

"Full austerity" is wildly hyperbolic. Here's EU government spending as share of GDP: https://tradingeconomics.com/european-union/government-spending-to-gdp https://tradingeconomics.com/european-union/government-spend... Try to click on MAX and spot when governments went "full austerity".

miguelxt 3y ago

What austerity? In Spain’s case, both debt to GDP and tax revenue to GDP ratios has been increasing since a decade ago. That’s the contrary of austerity.

ClumsyPilot 3y ago
tax revenue to GDO? how is that relevant to government cutting spending? I never said they've cut taxes. If economy collapses, state recenues drop, ofcourse debt will grow