Yeah, the last time I checked all Americans were begging for it:

[RRSignal]

RRSiignal do you genuinely believe that any democracy or even a Democratic party could survive 40 years of austerity. Rather timely for this thread the Spanish government have tonight requested a "bailout" for their banks after implementing three years of austerity policy as requested by the European Central bank.

They'd better - government and it's feel-good quick-fixes are what got us into this mess in the first place, and are only digging us deeper day by day. Can you live an entire life on borrowed money? Government has done that for over a generation. And, how are you going to pay millions of government workers not to work the rest of their lives and think that's in any way sustainable? Unfortunately, unless we effectively default on those obligations, we're only going to dig ourselves deeper. And, even if we do, if we continue to expand government, we're only going to recreate the original problem. As is often attributed to Albert Einstein, insanity is doing the same thing over and over and expecting different results and, as you pointed out, history has a habit of repeating itself.

FYI, Europe may obey different laws of economics, physics, etc. but the U.S. was built mostly by private industry. Over time, as government got more and more involved, they ended up wrecking the wealth and forcing jobs overseas. Government has largely raised the costs of doing business and, rather than addressing how we can lower the cost of providing a service (e.g. healthcare), government tends to be more concerned with blindly paying the bill with money they/we don't have.

One thing is certain - what government touches has a tendency to turn to (bleep).

 

[rjhowie]

I think that those in Europe that can't handle austerity are those that weren't that strong in the first place and thought that the EU was problem solved.Out came the begging bowls and they went daft spending and spending. The Euro (which I am gratefully thankful we don't have) instead of being a happy situ is a dreadful one. Countries like Spain, Portugal, Greece, Ireland (thought I'm glad it is a railway degree of heaven now!) were not ones that had any great financial system before the EU and was over-used as a solver. They got a wee bit caried away even if the people over-all had an improved life style. Greece for example should never have been in it with it's history and record. Tax evasion, working practices - too many working for the State and so on. However, we cannot simply argue that no-one should work for the Local Clncil or the government as you still need a Civil Service just not so many. I worked for years in Local Government and I did realise that due to a slightly selfish attitude we were getting pension deals far improved than the private sector. That is unfair and we cannot solve it by saying that same rules apply to private staff. A City can just up the tax a private company is not in the same league! So someone in the private sector is paying extra for the Public Employees. Up here in Scotland we have had far too many working in the Public Sector and time it was changed but don't hold your breath!

The rad truth is governments don't have any money they spend ours. If you spend too much on your credit cards there will be a crunch and many in that bracket moan at governments as in a somehow a different thing. Years ago I got into difficulty but go out of it and thereafter decided to live within my means and doing comfortably well. So a country is just like an individual and has no unlimited money supply. If it has to be austerity then so be it until things can be sorted. Just borrowing more is a not very intelligent idea and just adds to the debt. The interest along is punishing.

Margaret Thatcher in fact had a wider point she was making. We could no longer rely on heavy industry and had to get out of that midset. Thr hard truth was that others in the developing world could pruce the heavy stuff cheaper than us so they were dying of their own accord. However, I do agree that there has to be some degree of making our own things.

 

[wholbr]

Hi Everybody.

I have deleted this posting as the one following was supposed to be an edit of this one but somehow came out as a full separate posting,
Apologies to everyone.

Bill

 

[wholbr]

Hi Everybody.

I think I must be missing something in this thread as there are members of the forum who say that austerity is a good policy and must be followed by western countries around the world to end government borrowing.

Spain has followed an austerity policy for the last three years and has received many pats on the back from the International monetary fund and the European Central bank as well as governments like Britain, France and Germany. (Okay, great I follow that so far)

The result of the policy is that 20% of Spain's adult population are unemployed along with 50% youth unemployment. (Okay, just a side-effect of the policy)

The foregoing means that the unemployed are unable to pay their rents and mortgages and therefore the Spanish banks are landed with all those bad debts which is threatening a collapse of the Spanish banking system. (Again, just another side-effect of the policy.... But leaves me wondering a bit)

The Spanish government cannot let its banks fail and therefore has asked the European Central bank to lend it one hundred billion euros to support the banking system and prevent it from collapse. (Now this is the bit I do not get. I thought that austerity was brought in to end the need for the Spanish government to borrow……. Oh well let's go).

The European Central bank will lend the Spanish government money so that they can continue its successful austerity policy, but the European Central bank does not have any money of its own. It will have to ask all the other European governments to contribute to the 100 billion required required (again this bit I do not get. To me that means that all the other governments will have to borrow to raise the money for the Spanish government to borrow)

Ah, now thinking about it I believe I can see where the success will come. With the money under its belt the Spanish government will be able to continue its successful austerity programme which undoubtedly will achieve a minimum of 50% unemployment in the adult population and total unemployment among the youth population. The ofshot of that would mean a further bailout for the Spanish banks and its government with all those unemployed to support. Again the money would be raised by other governments, This time it will probably be double or treble the original amount.

The Spanish government would then be able to throw a big party to celebrate its successful austerity programme and in doing so bringing down the western capitalist system throughout the world.

Ah, I see I see it all now.........................yes great stuff
Bill

 

[robd]

Some very strong opinions appear in this thread regarding the current global economic situation but, alas, the solution to the problem hasn't been put forward.

I don't know what the solution may be and I doubt very much that the previous posters know either. They're just full of hot air and it needs to escape from them!

I question the the need by some folk to put forward such opinions on a forum which is essentially all about a virtual railway simulator.

Rob.

 

[wholbr]

Some very strong opinions appear in this thread regarding the current global economic situation but, alas, the solution to the problem hasn't been put forward.

I don't know what the solution may be and I doubt very much that the previous posters know either. They're just full of hot air and it needs to escape from them!

I question the the need by some folk to put forward such opinions on a forum which is essentially all about a virtual railway simulator.

Rob.

Try reading the thread right through Robd and you will see that any number of solutions have been put forward. Therefore I think most of the " hot air" is coming from yourself for not making the effort to read the thread. Also if you do not like the thread don't read it.

But as usual you do not put any effort into your postings and seem to go out of your way to "insult" other members which you have had to apologise for in subsequent postings before. Doubtless now you will request the thread closed as usual.

I'm sorry that you did not appreciate my humour in my last posting but you have always appeared to have no sense of humour in anything you have placed on this forum
Bill

 

[sparky15]

As long as you have one half of a population totally dependent on the other half for everything from basic food to advanced education, you will never do anything but break even at best.
Add in globalization where a loaf of bread costs $1 in country A, $3 in country B and $5 in country C, you will waste money subsidizing country C to compete with country A.
Now our economies are "hooked" to one another, when one fails, they all fail. A strong economy in the US could absorb a normal economy downfall in Europe for example. The other way as well. Japan's "lost decade" could be absorbed by other economies to make the pain easier on us all. Not so much anymore.
Simplified, but I hope you get the idea.*

 

[RRSignal]

The Spanish government cannot let its banks fail and therefore has asked the European Central bank to lend it one hundred billion euros to support the banking system and prevent it from collapse. (Now this is the bit I do not get. I thought that austerity was brought in to end the need for the Spanish government to borrow……. Oh well let's go).

Two problems with this - the logic behind TBTF is that we have to reward bad decision-making, and in some cases, bad behavior, with...a taxpayer bailout. No lesson will be learned, and there is no incentive not to repeat the mistakes that got Spain, Chrysler, etc. into the mess to begin with. In fact, if anything, there is more incentive to replicate said bad behavior.

The other problem is this logic is so government-focused. Government does not create wealth; in most cases, it destroys it. Government can, on occasion, steer the economy, but more often than not, the not-so-invisible hand of government simply gets in the way, if not makes things much worse.

Here in the U.S., most of our productivity-building occurred during the relatively laissez-faire period prior to WWII; it was after, as government gradually became more and more entrenched in our everyday lives, wealth and manufacturing gradually left the country. Seems there's a pattern here, be it the U.S, Spain, etc. - the more government involvement, the more economic instability and unemployment eventually follows.

Nobody's saying austerity will be an easy or pleasant road, but the problem is, there really isn't any other sustainable alternative, regardless of what the politicians try to lead people to believe.

 

[RRSignal]

---whoops, double post ---

 

[wholbr]

Hi Everybody

Two problems with this - the logic behind TBTF is that we have to reward bad decision-making, and in some cases, bad behavior, with...a taxpayer bailout. No lesson will be learned, and there is no incentive not to repeat the mistakes that got Spain, Chrysler, etc. into the mess to begin with. In fact, if anything, there is more incentive to replicate said bad behavior. .

I would 100% agree with what you say there RRSignal we should never reward bad management in any organisation or company and I think it grates with everybody that the executives of these banks always seem to walk away still keeping their huge pensions which then have to be paid from the tax of people earning less than one 10th of their salaries.

However, I think you have to appreciate the position of British Prime Minister Gordon Brown at the time of the Royal Bank of Scotland collapse when he was telephoned in the early hours of the morning by its chief executive who told him that if he did not bailout his bank to the tune of many billions then in four hours the bank branches would not open their doors and all the cash machines would be switched off. That would have meant that people would not been able to access their salaries paid into the banks and pensioners their savings or pensions. That is often why these banks have to be bailed out as much as we all hate it.

The other problem is this logic is so government-focused. Government does not create wealth; in most cases, it destroys it. Government can, on occasion, steer the economy, but more often than not, the not-so-invisible hand of government simply gets in the way, if not makes things much worse. .

I believe I can also agree with most of what you say there RRSingal. Owning my own company involved in workplace health and safety we have four levels of government bureaucracy above us. The government health and safety executive, the government health and safety commission, the environmental health agency and the Crown prosecution service who also may be at times involved. .(It's ridiculous)

However, when it really comes down to it these bodies are not the main driving force in workplace health and safety. That belongs to the various insurance companies. The insurers use companies like mine to carry out safety audits and investigations at workplaces they insure or who are applying for insurance. That costs the taxpayer nothing. I'm not blowing my own trumpet there, just quoting my long experience in one sector of industry.

In some parts of Britain over a 30% of the working population are in government or local council employment with bodies like the above. That I agree with you is unsustainable and has to be changed.

The question is how do we change the above situation. Well obviously we have to transfer many people from public sector employment to private sector employment. That is proving impossible at the moment because there is no demand in the economy for the private sector to take up those who are being made redundant in the public sector. That is why I say that at least for a limited time we have to find the money for large infrastructure projects such as railway development to try to get the economy rolling and enable private companies to employ more. Should that fail then there may be no alternative to your long hard road but that could take many countries into the abyss before recovery comes.

All I am requesting is one final try
Bill