Technical recession. Recession nonetheless. The ECB has a real problem with asymmetry. Can't cut rates just for Germany. At the same time there's high inflation in Austria, Slovenia and the Baltics.
>The ECB has a real problem with asymmetry. Can't cut rates just for Germany.
It's as if a single currency and a single central bank for 25 different economies with different levels of debt, doesn't really work that well in every situation.
> At the same time there's high inflation in Austria
Inflation in Austria is now mostly due to greedflation. If you cross the border into Germany the same goods are suddenly cheaper.
A monetary union without a fiscal union doesn't really make sense, imo. The US (mostly) works because states run balanced budgets(if you ignore underfunded pensions) and the federal govt corrects trade imbalances by taking money from some states and sending it to others.
Economists in the EU must have understood this and if I had to guess they assumed a fiscal union would develop at some point?
True, but every system has flaws. For the most part the Euro and ECB has been a benefit for every country in it.
Even a country like Greece. As bad as the single currency was for Greece, outside the EU and Eurozone, Greece could very likely have been closer to Venezuela with even fewer resource wealth to benefit from.
Was it really a benefit? The only benefit is belief that Germany won't let euro fail and will bailout anybody no matter how shitty situation is. On the other side, this prevents fixing root causes. Why fix anything and make people angry if you can ride the wave, hope for the best and in worst case someone will bail you out?
That's why we have this massive inflation. No real value is created, yet everybody is flush with the money. Pandemic was just a perfect excuse for BS that is brewing since at least 08 crisis.
>That's why we have this massive inflation. No real value is created, yet everybody is flush with the money.
Indeed. Most of EU's economic growth since the 2008 crash was just printing money and propping up assets. A bunch of wealthy boomers buying expensive houses from one another does not mean actual economic prosperity.
We just printed our way into prosperity but Covid supply chain disruptions, the energy shortage, and the Ukraine conflict exposed the EU emperor had no clothes.
And lots of money poured into various „EU-funded“ (= money pulled out of thin air) programmes. All sorts Bs training that creates no wealth. Sure, topics may read nice on paper. But does it create any value? All while basic economy is going down the drain.
Who cares if everybody and his or her dog can discuss emotional intelligence, yet we end up relying on China more and more? Both to import crucial stuff and export crappy extravaganza nobody else is buying.
The green whatever plan is great example. Let's fuck over our farmers and kick out remaining manufacturing. Just to pretend we're soooo environment-friendly. And then import fuckton of stuff from far away. Thankfully there will be CO2 import tax. But CO2 regulations is not the only thing curbing local economies while faking low CO2 reports in far away countries may be a lucrative industry...
Maybe not outright exiting the EU. But maybe exiting the Eurozone and removing some other problematic economic straightjackets like overly large tax-financed subsidies.
Imo that would leave Italy and Spain and their respective union members in the dust competing against the US, China and India.
But maybe that's worth it, or maybe the Brexit will turn out great like pg said due to them not having stringent EU-type regulations on things like AI and banking (though if you're a founder leaving the EU i don't see why you'd go to the UK over the US or Canada).
Italy and Spain are heavily based on tourism and snobbery (e.g. high fashion). They ain't competing against US/China/India. And that's OK. But they need different economical policies than, for example, Germany.
Greece's problem is internal, not external. Endemic bad management that used to be dealt with by devaluing the currency. With the euro there is nowhere to hide but at least that indeed prevents runaway devaluation.
Not really. US is in a better position for a federal-wide monetary union. Labor mobility is a key component, and it is easier when you don't have different languages and cultures.
To what extent does each state run its own economy? The EU does not have centralised taxes or a centralised economic policy, but it does have a single currency. It's possible a single currency also requires more centralised financial/economic policies.
State economies do differ dramatically though, and monetary policy can indeed affect them in opposite ways at least for a while. And state revenues are almost entirely collected by the state aren't they? There are funds for interstates and railroads, and schools, but often schools are primarily funded at the city level by property taxes.
>The major difference between states is tax rates.
Also tax spending. For example there's no central EU funded military but each member budgets it differently, just like how there's no New York military and Pennsylvania military.
Austria is always lagging behind Germany. I'd say about 6-12 months. So I have no worry that Austria will go down to roughly the same level as in Germany.
Gas prices have already dropped to a level where it is slowly getting in the range of pre-covid
> then why am I being asked to bail out a generation's college loans?
Wouldn't that fit perfectly with the comment you're responding to? Because the money is there. In fact I'd expect us to be bailing people out as we get richer. Less govern
So perhaps there are just more people! (Anything can be an "all time high" or "record X" if you ignore this fact). Or local trust in food banks has risen. Or food banks have more money now to hand out more food.
> then why are more six-figure earners reporting to be living paycheck-to-paycheck?
Because the popular report you're citing here, sponsored by lending service LendingClub, includes buying groceries on a credit card as "living paycheck to paycheck" even if you're paying it off each month and only doing it for the points.
> then why is personal credit card debt at an all time high?
Because there are more people! Or are you actually talking about debt as a percent of income which is a more realistic stat? Because people spend less on their debt now than almost ever. https://fred.stlouisfed.org/series/TDSP
this is called "hopium" one-liner.. look at the demographics.. twelve billionaires and 2.6 million adults having trouble paying monthly bills in my US West coastal area. Asset bubbles notably residential housing. capital-flight..
There is a trend that some people lean heavily on government intervention to solve their problems, rather than exercising personal initiative. This dependence can exacerbate issues in densely populated regions, where high living costs, limited housing, and food security concerns are rampant, despite surprisingly low out-migration rates.
However, alternatives are readily available. Inland areas beyond the coastlines offer affordable living and plentiful housing.
> some people lean heavily on government intervention to solve their problems
this lecture is better pointed at the naive.. look at system rules in place, benefiting "stall" politics and high tax on labor, local govt zoning, and access to capital projects. You explain to me how "Noah's Bagels" makes multi-hundred franchise with high-end remodelling, to sell bagels. A person "exercising personal initiative" goes out of business in less than half a year! Also construction contractors..
hollow platitudes work when the system is flush.. dont be surprised to get serious pushback with that
Government is not able to fix the peoples' problems. Entrenched poverty and homelessness has been a problem in New York [3] and California for decades, but even though the same party has been in power for similar decades -- New York has been under single-party control since 1975 [1] and California since 1959 [2] -- the problems remain. There is no motivation to solve the peoples' problems, only "lectures pointed at the naive" around election time.
For the individual, the only realistic option is out-migration to lower density areas.
> New York has been under Democrat control since 1975 [1] and California since 1959 [2] -
Neither of those claims are supported by those links (and even the control that actually is shown by those links may be misleading, in that it ignores things like “controlling all of the separately elected executive offices and having majorities in both houses of the legislature is insufficient to govern California since it takes a legislative supermajority to make tax changes that involve any increases, and, prior to 2014, to even pass an annual budget”.)
Feel free to post a source for your claims that the party with 5+ decades of majority control is excused from its failures to alleviate the problems of its most desperate citizens because of spoiler votes.
In any case, the fact that that situation is even possible is support enough for folks to move to lower density areas.
