7 ms·

The EU and USA both have free movement between states. But the USA has massive federal tax revenue and spending which redistributes wealth from rich states to

by klipt 2y ago

The EU and USA both have free movement between states. But the USA has massive federal tax revenue and spending which redistributes wealth from rich states to poor states. Federal taxes are much higher than state taxes. By comparison the EU has high state taxes, but very tiny "confederal" EU level revenue. So much less ability to balance things between rich and poor member states. This puts poor states like Portugal into a bad position where they suffer from brain drain due to the free movement, but don't get enough monetary benefits from the EU to counteract that. This turns Portugal into a gateway country for the EU: they have loose immigration rules because they want to attract young workers. But as soon as those workers live in Portugal long enough to get an EU passport, many brain drain away to other (better paying) EU countries, and need to be replaced with even more immigrants.

alephnerd 2y ago
> This puts poor states like Portugal into a bad position The only reason Portugal (and Ireland, Spain, Greece, etc) is counted as a "Developed Country" today is because of the EU. These countries received the lion's share of EU Development Funds until EU expansion in the 1990s-2000s. If Portugal didn't join the EU, it would have been similar to Argentina - it's economic peer until EU ascension in 1986
- melenaboija 2y ago
  Spain is x3 the nominal GDP of Ireland and x6 Greece and the 15th economy in the world and the three together are of the size of Canada. Maybe your comment about what defines a developed country might be overly simplified...
  - alephnerd 2y ago
    > developed country Developmental indicators, nominal GDP per Capita, and median household income. Before Spain, Ireland, Greece, and Portugal ascended into the EU in the 1970s-80s, their developmental indicators largely mirrored those of developing countries from that era (Malaysia, Turkey, Argentina, Iran). It was EU developmental funds that helped these countries not fall into the middle income trap. The only developing countries that were able to escape the middle income trap without EU Development Funds or oil were South Korea, Taiwan, Singapore, and Israel. Also, having a large GDP does not mean a country is developed. China and India have the 2nd and 5th largest GDP in the world, yet their median household incomes are less than that of Thailand, Mexico, or Malaysia - let alone countries defined as developed by the IMF.
    - lastdong 2y ago
      Portugal, like Spain and Argentina, faced significant historical challenges in the 20th century. Portugal's fascist regime, which lasted until 1974, limited investment in infrastructure and economic development. Spain, under Franco's dictatorship, also faced political and economic constraints. Argentina, too, experienced political instability and economic turmoil, particularly during the 1970s military dictatorship. Also were mentioned Malaysia, Turkey, and Iran, which have their own unique historical contexts that I'm not as familiar with.
      - alephnerd 2y ago
        Absolutely. And that doesn't have anything to do with my point that Spain was a developing country well into the 1990s, and that most of the post-Franco era development was subsidized by EEC and EU Developmental Funds Read this, it's a good overview of the process - https://www.elibrary.imf.org/display/book/9781557753199/ch02.xml https://www.elibrary.imf.org/display/book/9781557753199/ch02...
        shiroiushi 2y ago
        Yep, Spain was a dictatorship until about 50 years ago, well within many people's living memory. Even worse, why is it a democratic nation (sorta--they still have a king after all) now? Because they got tired of living in a dicatorship? No. It's because the dictator got old and died, and I guess they couldn't find a new dictator to replace him. It shouldn't be any surprise that a nation and culture so tolerant of living in a dictatorship isn't exactly leading the world.
        mejutoco 2y ago
        Franco designated his successor. It was supposed to be the previous king Juan Carlos. He reinstated the monarchy and became king instead. In terms of getting rid of dictators, you also have to realize that since the Spanish civil war (1936-1939) there was a dictatorship until 1975. That is a lot of time to purge any opposition. Your last sentence is uncharitable and overly simplistic.
steveBK123 2y ago
Yes, EU is hurt a lot by being a currency union with freedom of movement without being a true federal state. It is helpful to the core rich countries and to elite/upwards mobile across countries. But it hollows out the periphery. A lot of the GFC era EU debt crisis was German banks lending to southern European states to then buy goods/services from.. German industry. So I was not as understanding of the northern countries looking down at the "lazy south". It was far more complicated than this and they were happy to look the other way while it worked for the first decade. I'm honestly not sure where EU goes from here as the GFC & the response dampers any enthusiasm for a true federal government, unified military, etc. Not that there was much appetite to hand over that much sovereignty to start with. Nor does it help that post-GFC, even the rich parts of EU have further diverged in terms of wealth/income from the US, so they are probably feeling even less "generous". Draghi wrote a whole report on EU competitiveness recently and in standard Eurocrat form its like a 500 page paper no one will read, let alone action.
- fakedang 2y ago
  And that is precisely the issue with the EU. I was always supportive of the spirit of the European Union and its ultimate objectives, but in its current state, it's a brutalized self-sabotaging entity that has disillusioned the general public to veer rightwards. And with furthermore technological lagging vis-a-vis China and the US, and the immigration crisis, not to mention the Russian Axis round the corner and the collective inaction of a number of EU states around that, and it's no wonder the EU is falling back into 3rd place. And for some reason, the EU still thinks net uncontrolled refugee migration is good for their economics,their population and their electability, as is letting American private equity buy up large swathes of residential properties. Guess that's what you get when you let freeloaders who haven't worked a real job in their lives hold unelected positions of power.
  - randomNumber7 2y ago
    From my impression of Germany I can tell you they would do the same suicide without the eu.
  - xk_id 2y ago
namaria 2y ago
Portugal's GDP PPP is about 485 billion dollars. About the same as Tennessee. Portugal received about 3 billion dollars from EU funds in 2021. About the same Tennessee received from the US federal government in that same year. I fail to see how a nominal difference in internal organization leads to much different outcomes. edit: I got some bad data on my search, my bad, will leave my mistake up.
- alephnerd 2y ago
  Loans and Bonds are not serviced in purchasing power - they are serviced in exchange rate $s and €s. Portugal (and a significant portion of EU members) had an economic meltdown during the Eurozone crisis from 2008-14, and are still trying to service those loans and bonds to this day. Also, Portugal's GDP is half that of Tennessee's. In fact, Portugal has the same population size as Michigan and North Carolina, yet a GDP that is ~50% and ~33% in size respectively.
  - namaria 2y ago
    PPP is used solely to compare Portugal to a US federation unit. The economy of Portugal happens in Euro and Tennessee in Dollars, and that is immaterial to this argument.
    - alephnerd 2y ago
      PPP is not a useful comparison unit when nominal $-€ conversions and costs are extremely well understood.
      - namaria 2y ago
        Which US state has an economy of a size comparable to that of Portugal? Does that change when the relative value of Euro to Dollar fluctuates?
        alephnerd 2y ago
        > Which US state has an economy of a size comparable to that of Portugal Oklahoma, but Oklahoma also only has 40% of the population of Portugal. Despite being in the Western half of Europe, Portugal is economically comparable to an Eastern European country like Poland or Slovakia. The only US territory (not state - even poor Mississippi has a higher median household income and GDP per capita than much of Western Europe excluding Germany and Scandinavia) that is comparable to Portugal is Puerto Rico. In fact, the problems Puerto Rico faces today in the US mirror those that Portugal faces in the EU.

by klipt 2y ago

alephnerd 2y ago

> This puts poor states like Portugal into a bad position The only reason Portugal (and Ireland, Spain, Greece, etc) is counted as a "Developed Country" today is because of the EU. These countries received the lion's share of EU Development Funds until EU expansion in the 1990s-2000s. If Portugal didn't join the EU, it would have been similar to Argentina - it's economic peer until EU ascension in 1986

melenaboija 2y ago
Spain is x3 the nominal GDP of Ireland and x6 Greece and the 15th economy in the world and the three together are of the size of Canada. Maybe your comment about what defines a developed country might be overly simplified...
- alephnerd 2y ago
  > developed country Developmental indicators, nominal GDP per Capita, and median household income. Before Spain, Ireland, Greece, and Portugal ascended into the EU in the 1970s-80s, their developmental indicators largely mirrored those of developing countries from that era (Malaysia, Turkey, Argentina, Iran). It was EU developmental funds that helped these countries not fall into the middle income trap. The only developing countries that were able to escape the middle income trap without EU Development Funds or oil were South Korea, Taiwan, Singapore, and Israel. Also, having a large GDP does not mean a country is developed. China and India have the 2nd and 5th largest GDP in the world, yet their median household incomes are less than that of Thailand, Mexico, or Malaysia - let alone countries defined as developed by the IMF.
  - lastdong 2y ago
    Portugal, like Spain and Argentina, faced significant historical challenges in the 20th century. Portugal's fascist regime, which lasted until 1974, limited investment in infrastructure and economic development. Spain, under Franco's dictatorship, also faced political and economic constraints. Argentina, too, experienced political instability and economic turmoil, particularly during the 1970s military dictatorship. Also were mentioned Malaysia, Turkey, and Iran, which have their own unique historical contexts that I'm not as familiar with.
    - alephnerd 2y ago
      Absolutely. And that doesn't have anything to do with my point that Spain was a developing country well into the 1990s, and that most of the post-Franco era development was subsidized by EEC and EU Developmental Funds Read this, it's a good overview of the process - https://www.elibrary.imf.org/display/book/9781557753199/ch02.xml https://www.elibrary.imf.org/display/book/9781557753199/ch02...
      - shiroiushi 2y ago
        Yep, Spain was a dictatorship until about 50 years ago, well within many people's living memory. Even worse, why is it a democratic nation (sorta--they still have a king after all) now? Because they got tired of living in a dicatorship? No. It's because the dictator got old and died, and I guess they couldn't find a new dictator to replace him. It shouldn't be any surprise that a nation and culture so tolerant of living in a dictatorship isn't exactly leading the world.
        mejutoco 2y ago
        Franco designated his successor. It was supposed to be the previous king Juan Carlos. He reinstated the monarchy and became king instead. In terms of getting rid of dictators, you also have to realize that since the Spanish civil war (1936-1939) there was a dictatorship until 1975. That is a lot of time to purge any opposition. Your last sentence is uncharitable and overly simplistic.

steveBK123 2y ago

Yes, EU is hurt a lot by being a currency union with freedom of movement without being a true federal state. It is helpful to the core rich countries and to elite/upwards mobile across countries. But it hollows out the periphery. A lot of the GFC era EU debt crisis was German banks lending to southern European states to then buy goods/services from.. German industry. So I was not as understanding of the northern countries looking down at the "lazy south". It was far more complicated than this and they were happy to look the other way while it worked for the first decade. I'm honestly not sure where EU goes from here as the GFC & the response dampers any enthusiasm for a true federal government, unified military, etc. Not that there was much appetite to hand over that much sovereignty to start with. Nor does it help that post-GFC, even the rich parts of EU have further diverged in terms of wealth/income from the US, so they are probably feeling even less "generous". Draghi wrote a whole report on EU competitiveness recently and in standard Eurocrat form its like a 500 page paper no one will read, let alone action.

fakedang 2y ago
And that is precisely the issue with the EU. I was always supportive of the spirit of the European Union and its ultimate objectives, but in its current state, it's a brutalized self-sabotaging entity that has disillusioned the general public to veer rightwards. And with furthermore technological lagging vis-a-vis China and the US, and the immigration crisis, not to mention the Russian Axis round the corner and the collective inaction of a number of EU states around that, and it's no wonder the EU is falling back into 3rd place. And for some reason, the EU still thinks net uncontrolled refugee migration is good for their economics,their population and their electability, as is letting American private equity buy up large swathes of residential properties. Guess that's what you get when you let freeloaders who haven't worked a real job in their lives hold unelected positions of power.
- randomNumber7 2y ago
  From my impression of Germany I can tell you they would do the same suicide without the eu.
- xk_id 2y ago

namaria 2y ago

Portugal's GDP PPP is about 485 billion dollars. About the same as Tennessee. Portugal received about 3 billion dollars from EU funds in 2021. About the same Tennessee received from the US federal government in that same year. I fail to see how a nominal difference in internal organization leads to much different outcomes. edit: I got some bad data on my search, my bad, will leave my mistake up.

alephnerd 2y ago
Loans and Bonds are not serviced in purchasing power - they are serviced in exchange rate $s and €s. Portugal (and a significant portion of EU members) had an economic meltdown during the Eurozone crisis from 2008-14, and are still trying to service those loans and bonds to this day. Also, Portugal's GDP is half that of Tennessee's. In fact, Portugal has the same population size as Michigan and North Carolina, yet a GDP that is ~50% and ~33% in size respectively.
- namaria 2y ago
  PPP is used solely to compare Portugal to a US federation unit. The economy of Portugal happens in Euro and Tennessee in Dollars, and that is immaterial to this argument.
  - alephnerd 2y ago
    PPP is not a useful comparison unit when nominal $-€ conversions and costs are extremely well understood.
    - namaria 2y ago
      Which US state has an economy of a size comparable to that of Portugal? Does that change when the relative value of Euro to Dollar fluctuates?
      - alephnerd 2y ago
        > Which US state has an economy of a size comparable to that of Portugal Oklahoma, but Oklahoma also only has 40% of the population of Portugal. Despite being in the Western half of Europe, Portugal is economically comparable to an Eastern European country like Poland or Slovakia. The only US territory (not state - even poor Mississippi has a higher median household income and GDP per capita than much of Western Europe excluding Germany and Scandinavia) that is comparable to Portugal is Puerto Rico. In fact, the problems Puerto Rico faces today in the US mirror those that Portugal faces in the EU.