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Start with a very rich country - a former superpower that fought with its rival for world domination. I'm not talking about USA and USSR but France and England.

by guylhem 14y ago

Start with a very rich country - a former superpower that fought with its rival for world domination. I'm not talking about USA and USSR but France and England. The #1 spots comes with lot of advantages like accumulated wealth, educated workforce, etc. Now start to introduce socialist reforms - little by little, and watch the country bleed itself out while its voters supports this self destructive streak being proud of the equality they are achieving. This "equality" makes me think of thermodynamics. Yes they are increasing entropy, destroying the country. It can be achieved in a small amount of time (Zimbabwe managed to turn itself from very rich to very poor in a record amount of time!) or a long time - as France is showing. At the moment, France can only take advantage of the size of its economy as a refuge in the eurozone for those who don't want to put all their eggs in Germany If France keep destroying its economy that way (or if say the UK gets in the eurozone) the end of the ride is near. [I wonder if it will need food help to fight famine, like Zimbabwe, after after being a net food exporter]

cdavid 14y ago
What makes you think France is destroying its economy ? And what makes you think UK or Germany is that much better ? When you scratch behind the superficial discourses around european economy, some underlying issues are systemic and shared across all big European economies. One of them is the very weak capitalization of banks, and high asset/gdp of the private banking system [1]. This by itself explains a large part of the current European policies (for example, those countries don't/can't recognize that they will need to re-capitalize their banks at taxpayer-expense). This is much, much more critical than changes in taxes which effects are at best very disputed, and mostly explained by political biases of each side. [1] (asset / gdp is > 6x GDP for switzerland, > 3x GDP for UK and France, to compare to 0.6 x GDP for the US: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/03/20120322_eu1.png http://www.zerohedge.com/sites/default/files/images/user3303...)

by guylhem 14y ago

cdavid 14y ago

What makes you think France is destroying its economy ? And what makes you think UK or Germany is that much better ? When you scratch behind the superficial discourses around european economy, some underlying issues are systemic and shared across all big European economies. One of them is the very weak capitalization of banks, and high asset/gdp of the private banking system [1]. This by itself explains a large part of the current European policies (for example, those countries don't/can't recognize that they will need to re-capitalize their banks at taxpayer-expense). This is much, much more critical than changes in taxes which effects are at best very disputed, and mostly explained by political biases of each side. [1] (asset / gdp is > 6x GDP for switzerland, > 3x GDP for UK and France, to compare to 0.6 x GDP for the US: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/03/20120322_eu1.png http://www.zerohedge.com/sites/default/files/images/user3303...)