How does printing money and giving it to people having no idea how to conserve and save their assets is going to be good for the world economy. I’m speaking of America’s Bail-Out 2.0.
America, in the form of Ben Bernanke’s Traveling Money Manufacturing and Economic Shortfall Show, has taken to the road. The next stop is Europe. The Federal Reserve has decided to print almost limitless greenbacks to assist the Euro, a hemorrhaging monetary structure more noted for the fact few people understand it, than not.
The Euro is in trouble. No doubt. The first sign of trouble was when Europe decided somewhat mystically, several disparate, mostly contentious and in many stages of European history, sharing enemy status could coexist peacefully and prosper by sharing a common currency.
Oh yeah. There’s no enforcement procedure for the rules set-up for this mess.
They need interpreters at times to simply communicate. Occasionally this is only to enforce their chauvinistic stance thus making them seem statelier in the matter. Their demand for autonomy and therefore placement above their associates is more a matter of posturing than dominance in any political endeavor.
Each country came to the original Eurozone Table with baggage few members really expected to have as major a set of effects as have appeared. So many nations in the Eurozone stepped back from the pursuit of Communism with the fall of the Berlin Wall. But they didn’t step backward very far. They maintained an allegiance to Marxist Socialism having a nasty effect to this day.
Europe as a “worker’s paradise” has largely been recognized as a success. In Greece, as an example, you can earn top dollar, get paid benefits from the state and retirement at full salary at age 50 (or so it appears). That doesn’t seem too bad does it? No. But looks are deceiving.
Who pays for it all? Everybody else is the answer. Nobody understands they’re shelling out so much to keep a system like this on life support until it’s too late. They treat the symptoms (social unrest, strikes, protests, work slowdowns, and anarchy widening its spread from country to country) but never the underlying disease.
That disease is a widening failure by individuals comprising a society to accept responsibility for their own destiny, future or life-path, whatever you want to call it. Each generation wants the next to pay for their happiness. Europeans supplement their tax structures with Value Added Taxes (VAT). They tax themselves out of solvency with a taxing system where people are taxed based on how much they consume rather than how much they add to the economy (income tax). At every step of production a new tax is levied until it’s finally sold. Everything costs exorbitant amounts.
This is not good when you consider they want all of the benefits of a Capitalist society but want the Socialist economic format of the state providing everything for the society.
Look at it this way. America sends limitless Bail-Out money to shore up the economies of European countries. This theoretically allows people to buy products at a lower exchange rate and they can buy more disposable goods. In fact, because they’re taxed so much; they have less disposable cash.
With the countries having VATs there are problems. Each nation has different rates.
The United Kingdom has a 50% Income Tax and a VAT of 17.5 % Total taxation per citizen: 67.5% Tax rate. Sweden: Income Tax 55%; VAT 25% Total: 80%. Norway: Income Tax: 54.3% Total: 79.3%. Denmark: Income Tax 58%; VAT 25% Total: 83%
Even with these outrageous tax structures these countries are NOT financing social programs solely from taxes. They’re in debt beyond their eyeballs and need bail-out money no other country can really afford to provide. Except Ben Bernanke; he’ll print money until it has NO value and then print some more. Some say Bernanke needs an exorcism. He’s channeling John Maynard Keynes to no good effect.
Bernanke thinks the European socialist economic system is something America needs to assist. Good luck.
I’d suggest rather than an exorcism for channeling Keynes; he needs an enema. It might clear his head.
Thanks for listening.