PDF said:
Kasz216 said:
PDF said:
| Kasz216 said:
No. Spain's recent problems aren't related to debt. Just the construction bubble bursting.
Spain's economy has recovered fairly quickly and pretty nicely off from an unsustainable bubble...
but Spain's economic problems were big before the financial crisis ever occured, hidden by the data in some regards... and the same base issues are there.
Spain's pretty much always had a huge unemployment rate. .. espeically for younger employees.
What Spain needs is less rigid employment laws and buisnsess laws... which are unlikely to pass, because of just how stupid Franco was in pushing things the opposite way.
Unions and labor laws protect workers... but the problem is, they only protect current workers. Letting older workers stay around past their prime, and past the point of where they have more then enough money to live out their retirements.
It's hard to lay off workers, making it harder for companies in Spain to take risks, knowing that if the risks fail they're stuck with employees they can't use.
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So your in agreement that the policy of the EU (germans) that austerity is a one size fits all economic problems is not a good idea?
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Yep. It's just a good idea for most of the effected places.
Though I don't think Austerity ended up hurting anything, it didn't help.
The economy has recovered on it's own... because that's what economies do.
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How can you say Austerity doesn't hurt anything. Austerity is often terrible in recession as it dicourages spending which leads to a slower economic recovery. When you cut spending you are laying people off which only adds to the problem.
I think austerity makes sense incases of extreme debt because painful spending cuts is better than defaulting but it is a brutal process and makes it often take longer to rebound the economy.
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It's pretty simple... because government spending isn't real.
Government spending outside a few very rare cases doesn't actually create any real economic growth.
If you aren't running a deficit, that money that taxes are using to pay someone else, would end up being spent or invested privately, and it'd all go around all the same.
If you are deficit spending, you are pulling ahead economic activity, but in the end, it's been shown time and time again in research that the debt you have to pay is far greater. Even the studies that people like to pull forth on how much stimulus increases the economy tend to note that the decrease ends up wiping out any gains PLUS some.
