I just find it hard to follow, there’s so much going on all the time.
There are a lot of European countries who have budget surpluses(not necessarily a good thing but proves you wrong). Norway has a lot of money stored in a public trust fund. Germany has a lot of forex reserves. So no Europe is not collapsing. It’s economy is deteriorating but it’s definitely not collapsing in the predictable future.
What are these so called forex reserves comprised off? do you know? How much of that is US dollars, Euros, Government bonds, and other toxic assets?
The point is that these countries are most likely heavily invested in garbage. The surpluses are mostly illusive.
That’s a bold statement. Proof please.
Proof for what? You claim they have savings. we are dealing with governments here so the burden of proof is on you to show what these saving are really comprised off.
I say they are invested in garbage. prove me wrong.
Lol this proves what wrong exactly?
He is referring to this:
What I meant is, how does it prove they’re not?
Norway is not part of the eurozone.
Unless they cut spending drastically, the eurozone is bound to fail in the predictable future.
I like Roger Garrison’s analogy. If the US debt is like a hockey stick, then the one who is holding it is the puck.
Sorry if someone already touched on this. I am not an economist, so smash my ideas if I am wrong. You say we don’t need so many drugs for the same illness. More money would be saved if we focused on producing limited number of drugs for every disease. Who is to say you don’t need many drugs for the same illness? Ultimately in a free market, you may have several drugs developed and competiting. That will drive down cost, but it would also allow for variations in the drugs themselves. Maybe one drug addresses the disease while causing a side effect with certain people, and the other doesn’t. It’s by allowing the market to decide what is produced, that we get the myriad of options and choices as consumers. Under a government run market, government would limit those choices. If you happen to be someone that has that side effect, oh well. You are out of luck.
Second, you say “We only need medical equipment that satisfies the bare minimum of curing the patient unlike in a capitalist economy where medical equipment costs much because it provides for unnecessary comfort” This is a bad thing? Maybe we should only provide the bare minimum in a car to get you from point A to point B. Why have heating, cushioned seats, or windows for that matter. I’m sure the absurdity is coming through, so why would health care be any different. Why wouldn’t manufacturers build in comfort? It’s a competitive advantage. It amazes me that this would be a negative to socialists. This is what quality of life is about. Being able to improve upon things. It’s because of socialism and the state, that they cannot have comfort and a better quality of life.
As someone else said, they have been able to milk off the US’s innovation. If we throw our innovation away by trying to be like them, everyone will suffer.
Lastly, these comforts and too many drugs is not why everything is so expensive. The reason that everything is so expensive is mainly government involvement way back to WWII when the put wage controls in place and caused companies to start providing insurance to get around it. Add to that medicare/medicaid, HMO legislation, mandatory coverage, and on and on. Only in the sectors where government is constantly meddling do you see prices ever increasing. In areas like computers, where they have not been heavily involved (not for long), you notice competition is fierce, prices go down, technology improves, and people are better off.
Ok. So by what criterion can you say that Europe is collapsing? We have so far established that not all of them are in debt crisis and that budget surpluses are irrelevant to the topic.
The EU is an economically integrated zone, tied by a common central bank, using the same media of exchange, and shares a labor market (free labor mobility). This means that the economies of Europe are more connected than they otherwise should be, and this puts pressure on those nations who don’t face economic disaster (they must decide whether to bailout the troubled economies or not). If they decide not to bailout the troubled European economies, then there are adverse economic ramifications (mass labor migrations, FDI collapses, ect). If, however, they decide to bail them out (troubled European economies), then the Euro faces downward pressure, and may collapse (attacked by currency speculators). Now Greece and Ireland don’t have much power in the EU, and they can’t force the European community to bail them out; but Spain, Portugal, Italy, England, and France, who are also in trouble, hold a lot of power in the European parliament. They will most definitely bail themselves out, and drag the relatively stable German economy (and the Euro) with them.
Either way, your point is moot. Welfare states rely on heavy deficits, which puts pressure on their debt, leading to fiscal crises; which is why the welfare states of Europe are about to collapse (Welfare states in the U.S are on the verge of collapse as well–NY, CA, MI, NJ). The fact that not all European nations are on the brink of collapse, at this very moment, is entirely immaterial. Welfare programs are not free–in fact, they are more expensive than they should be (market’s allocate resources more efficiently then government decrees).
Governments are inefficient (spend more per unit relative to the market), and inefficiency, subsidized by inflation and ruinous taxation, leads to economic catastrophe. You have no argument.
I think Esuric is right, and while I’m not nearly as economically well versed as he is, it’s pretty obvious that major european governments are approaching insolvency, much like the US government is. It’s really just a matter of time if you ask me.