5 ms·

Youths with nothing to lose are how bloody revolutions start, rarely turning out well for any involved. I find one thing about the unemployment rate in Europe

by kposehn 13y ago

Youths with nothing to lose are how bloody revolutions start, rarely turning out well for any involved. I find one thing about the unemployment rate in Europe truly scary: There are a /lot/ of youths there with nothing to lose.

kposehn 13y ago
And another thing: austerity is all that stands between Europe and total collapse. They can't keep writing checks they cannot cash.
- sopooneo 13y ago
  Do you mean that you believe austerity will help avoid collapse, or that austerity will bring it on? I think you mean the former. I'm too ignorant on the issue to have an opinion myself.
  - javs42 13y ago
    Unfortunately there is still debate about the benefit/drawbacks of austerity, but if Europe is any indication, it is just degrading the whole situation. What's keeping Europe away from the edge or from a turn to prosperity is the hard-nosed devotion to austerity.
    - adventured 13y ago
      Ah yes, if the troubled European nations would just spend a lot more money they don't actually have while not paying off any of their debts, while pretending they could ever afford the vast welfare states they built, they would find themselves prosperous again. Keynesian faith based economics at its finest. Spend what you don't have, run up debts you can never pay back, and print your way deeper into destruction when all else fails, because inflation is easier to lie about than an equivalent austerity cut. Keynesian economics, turning first world countries into second world countries since 1936.
      - deminature 13y ago
        Are we just going to pretend that Keynesian economics is some obviously foolhardy strategy and hasn't worked repeatedly in the past? It is understood to have worked with particularly great effect in Australia following the GFC.
      - rbehrends 13y ago
        No offense, but this comment betrays a very limited understanding of the situation. First of all, the European countries with the strongest welfare states do just fine. Also, social expenditures are not actually much different in the United States compared to EU countries -- it's just that more of it comes out of pocket [1]; in the end, it still comes out of your paycheck (as an employee) or profit (if self-employed). In fact, the US has higher net social expenditures than Spain (as a percentage of GDP). Second, money creation does not work the way you understand it. The majority of what economists call the M2 money supply is not created by the government or the central bank, but by private banks through fractional reserve banking [2], i.e. loans. And as a matter of fact, the M2 money supply [3] in Greece [4] and Spain [5] has cratered in recent years. The private banks have been "unprinting" money, if you like that terminology. While in theory this might have come from money being transferred to Germany etc., money supply growth across the Eurozone as a whole has also slowed down since the crisis [6], as opposed to the US [7]. Note that it is normal for the money supply to grow with the economy, even absent inflation, because M2 (= money in circulation) is an indirect indicator of economic activity. Finally, much as "printing money" is favored as a term by some people, this is not actually what Quantitative Easing is. What Quantitative Easing does (simplifying a bit) is a central bank making loans in lieu of the private banks when the latter fail to do so in sufficient measure. The QE process has the central bank buying private assets with money it created to compensate for a shortage in the money supply; the crucial difference (compared to printing money) is that the process is easily reversible; when the economy recovers, the central bank sells these assets again and destroys the money it gets back. Thus, the central bank retains control over the total money supply. QE is what the US Fed has been doing to prop up the money supply in recent years because Congress couldn't get its act together. Borrowing, likewise, is in the current situation in no way comparable to "printing" money. In fact, short term government bonds of most developed countries (T-bills or their equivalent) not called Greece, Spain, or Italy go for yields below the very low inflation rate: investors buy bonds even though they're technically losing money; similarly, those governments could technically make money by borrowing more at the moment because the aforementioned investors are willing to loan it to them at effective negative rates. [1] http://www.oecd.org/els/soc/OECD2012SocialSpendingDuringTheCrisis8pages.pdf http://www.oecd.org/els/soc/OECD2012SocialSpendingDuringTheC... (a convenient chart is on page 8). [2] http://en.wikipedia.org/wiki/Fractional_reserve_banking http://en.wikipedia.org/wiki/Fractional_reserve_banking [3] http://en.wikipedia.org/wiki/Money_supply#Empirical_measures_in_the_United_States_Federal_Reserve_System http://en.wikipedia.org/wiki/Money_supply#Empirical_measures... [4] http://www.tradingeconomics.com/charts/greece-money-supply-m2.png?s=greecemonsupm2&d1=20020101&d2=20130630 http://www.tradingeconomics.com/charts/greece-money-supply-m... [5] http://www.tradingeconomics.com/charts/spain-money-supply-m2.png?s=spainmonsupm2&d1=20020101&d2=20130630 http://www.tradingeconomics.com/charts/spain-money-supply-m2... [6] http://www.tradingeconomics.com/charts/euro-area-money-supply-m2.png?s=emu%2cevolvmonsupm2&d1=20010101&d2=20130630 http://www.tradingeconomics.com/charts/euro-area-money-suppl... [7] http://www.tradingeconomics.com/charts/united-states-money-supply-m2.png?s=unitedstamonsupm2&d1=20020101&d2=20130630 http://www.tradingeconomics.com/charts/united-states-money-s...
- JamisonM 13y ago
  Actually, they can keep writing cheques and cashing them, they have their own currency, it allows you to do that. The current problem is that the "core" of the EU thinks it is in their best interest to keep inflation down and let the other nations suffer. The best evidence we have so far indicates that this is a very bad idea.
  - adventured 13y ago
    Cuts or inflation, it's the same end result. One is just more of a fraud than the other. Inflation is almost universally preferred by the political class because it does a better job of hiding the erosion of purchasing power and standard of living.
    - bodyfour 13y ago
      They have a similar end result on wages, maybe. It doesn't matter if your paycheck (and public benefits) decrease outright because of austerity or its silently inflated away. They differ though on who pays overall. Inflation is a tax on anyone holding €-denominated assets. For those who have denominated debts at a fixed interest rate, it's a boon. I'm sure France wouldn't complain if they end up repaying their 10-year bonds at a negative real return. Austerity is largely the opposite: countries (and people) who are in the worst financial situation feel the most pain. It's perfectly understandable that those with money will want more austerity, while those without want more inflation.
  - sliverstorm 13y ago
    The best evidence we have so far indicates that this is a very bad idea. Do we have evidence that indicates the alternative is any better? There's nothing that says both options can't be terrible.
    - deleted 13y ago
      [deleted]
    - snowwrestler 13y ago
      The U.S. has not followed a program of austerity, and our economy and hiring is recovering faster than Europe's.
- kposehn 13y ago
  Clarification: They can't keep writing political checks their economy cannot cash.
piokoch 13y ago
Nope. Revolution needs some "force in the middle" - the poor, lazy an uninterested will not start revolution. French revolution was not started by poor people, but by "middle class" who was not able to extend its wealth and influence because of ruling oligarchy (all these barons, etc). The poor were used by them, but were not the driving force. I am not sure that among young, comfortable, teached from kindergarden about tolerance, socialistic version of human rights there is enough energy to start anything (like making mind effort not to choose stupid and promising every for free politicians). The intellectual condition of european youth is rather poor. Spaniards have choosen socialistic government who was dealing with important stuff like human rights for monkeys. Go figure...
- kposehn 13y ago
  The youth's don't necessarily start it - but they are primed to carry it on. What happens is a groups with something to lose (the french middle class) takes advantage of another group that has nothing to lose (the poor). You can't start a fire with only a spark; you have to have a fuel source.

by kposehn 13y ago

kposehn 13y ago

And another thing: austerity is all that stands between Europe and total collapse. They can't keep writing checks they cannot cash.

sopooneo 13y ago
Do you mean that you believe austerity will help avoid collapse, or that austerity will bring it on? I think you mean the former. I'm too ignorant on the issue to have an opinion myself.
- javs42 13y ago
  Unfortunately there is still debate about the benefit/drawbacks of austerity, but if Europe is any indication, it is just degrading the whole situation. What's keeping Europe away from the edge or from a turn to prosperity is the hard-nosed devotion to austerity.
  - adventured 13y ago
    Ah yes, if the troubled European nations would just spend a lot more money they don't actually have while not paying off any of their debts, while pretending they could ever afford the vast welfare states they built, they would find themselves prosperous again. Keynesian faith based economics at its finest. Spend what you don't have, run up debts you can never pay back, and print your way deeper into destruction when all else fails, because inflation is easier to lie about than an equivalent austerity cut. Keynesian economics, turning first world countries into second world countries since 1936.
    - deminature 13y ago
      Are we just going to pretend that Keynesian economics is some obviously foolhardy strategy and hasn't worked repeatedly in the past? It is understood to have worked with particularly great effect in Australia following the GFC.
    - rbehrends 13y ago
      No offense, but this comment betrays a very limited understanding of the situation. First of all, the European countries with the strongest welfare states do just fine. Also, social expenditures are not actually much different in the United States compared to EU countries -- it's just that more of it comes out of pocket [1]; in the end, it still comes out of your paycheck (as an employee) or profit (if self-employed). In fact, the US has higher net social expenditures than Spain (as a percentage of GDP). Second, money creation does not work the way you understand it. The majority of what economists call the M2 money supply is not created by the government or the central bank, but by private banks through fractional reserve banking [2], i.e. loans. And as a matter of fact, the M2 money supply [3] in Greece [4] and Spain [5] has cratered in recent years. The private banks have been "unprinting" money, if you like that terminology. While in theory this might have come from money being transferred to Germany etc., money supply growth across the Eurozone as a whole has also slowed down since the crisis [6], as opposed to the US [7]. Note that it is normal for the money supply to grow with the economy, even absent inflation, because M2 (= money in circulation) is an indirect indicator of economic activity. Finally, much as "printing money" is favored as a term by some people, this is not actually what Quantitative Easing is. What Quantitative Easing does (simplifying a bit) is a central bank making loans in lieu of the private banks when the latter fail to do so in sufficient measure. The QE process has the central bank buying private assets with money it created to compensate for a shortage in the money supply; the crucial difference (compared to printing money) is that the process is easily reversible; when the economy recovers, the central bank sells these assets again and destroys the money it gets back. Thus, the central bank retains control over the total money supply. QE is what the US Fed has been doing to prop up the money supply in recent years because Congress couldn't get its act together. Borrowing, likewise, is in the current situation in no way comparable to "printing" money. In fact, short term government bonds of most developed countries (T-bills or their equivalent) not called Greece, Spain, or Italy go for yields below the very low inflation rate: investors buy bonds even though they're technically losing money; similarly, those governments could technically make money by borrowing more at the moment because the aforementioned investors are willing to loan it to them at effective negative rates. [1] http://www.oecd.org/els/soc/OECD2012SocialSpendingDuringTheCrisis8pages.pdf http://www.oecd.org/els/soc/OECD2012SocialSpendingDuringTheC... (a convenient chart is on page 8). [2] http://en.wikipedia.org/wiki/Fractional_reserve_banking http://en.wikipedia.org/wiki/Fractional_reserve_banking [3] http://en.wikipedia.org/wiki/Money_supply#Empirical_measures_in_the_United_States_Federal_Reserve_System http://en.wikipedia.org/wiki/Money_supply#Empirical_measures... [4] http://www.tradingeconomics.com/charts/greece-money-supply-m2.png?s=greecemonsupm2&d1=20020101&d2=20130630 http://www.tradingeconomics.com/charts/greece-money-supply-m... [5] http://www.tradingeconomics.com/charts/spain-money-supply-m2.png?s=spainmonsupm2&d1=20020101&d2=20130630 http://www.tradingeconomics.com/charts/spain-money-supply-m2... [6] http://www.tradingeconomics.com/charts/euro-area-money-supply-m2.png?s=emu%2cevolvmonsupm2&d1=20010101&d2=20130630 http://www.tradingeconomics.com/charts/euro-area-money-suppl... [7] http://www.tradingeconomics.com/charts/united-states-money-supply-m2.png?s=unitedstamonsupm2&d1=20020101&d2=20130630 http://www.tradingeconomics.com/charts/united-states-money-s...
JamisonM 13y ago
Actually, they can keep writing cheques and cashing them, they have their own currency, it allows you to do that. The current problem is that the "core" of the EU thinks it is in their best interest to keep inflation down and let the other nations suffer. The best evidence we have so far indicates that this is a very bad idea.
- adventured 13y ago
  Cuts or inflation, it's the same end result. One is just more of a fraud than the other. Inflation is almost universally preferred by the political class because it does a better job of hiding the erosion of purchasing power and standard of living.
  - bodyfour 13y ago
    They have a similar end result on wages, maybe. It doesn't matter if your paycheck (and public benefits) decrease outright because of austerity or its silently inflated away. They differ though on who pays overall. Inflation is a tax on anyone holding €-denominated assets. For those who have denominated debts at a fixed interest rate, it's a boon. I'm sure France wouldn't complain if they end up repaying their 10-year bonds at a negative real return. Austerity is largely the opposite: countries (and people) who are in the worst financial situation feel the most pain. It's perfectly understandable that those with money will want more austerity, while those without want more inflation.
- sliverstorm 13y ago
  The best evidence we have so far indicates that this is a very bad idea. Do we have evidence that indicates the alternative is any better? There's nothing that says both options can't be terrible.
  - deleted 13y ago
    [deleted]
  - snowwrestler 13y ago
    The U.S. has not followed a program of austerity, and our economy and hiring is recovering faster than Europe's.
kposehn 13y ago
Clarification: They can't keep writing political checks their economy cannot cash.

piokoch 13y ago

Nope. Revolution needs some "force in the middle" - the poor, lazy an uninterested will not start revolution. French revolution was not started by poor people, but by "middle class" who was not able to extend its wealth and influence because of ruling oligarchy (all these barons, etc). The poor were used by them, but were not the driving force. I am not sure that among young, comfortable, teached from kindergarden about tolerance, socialistic version of human rights there is enough energy to start anything (like making mind effort not to choose stupid and promising every for free politicians). The intellectual condition of european youth is rather poor. Spaniards have choosen socialistic government who was dealing with important stuff like human rights for monkeys. Go figure...

kposehn 13y ago
The youth's don't necessarily start it - but they are primed to carry it on. What happens is a groups with something to lose (the french middle class) takes advantage of another group that has nothing to lose (the poor). You can't start a fire with only a spark; you have to have a fuel source.