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Forums - Politics - Any possible solutions to the European Debt Crisis?

richardhutnik on 02 January 2012
HappySqurriel said:
richardhutnik said:

Social spending has little to do with actually helping people (well, it does, despite itself).  What it has to do more about is placating societal guilt over the disadvanged and offer delusions there is actually a safety net for people, in the case things get bad.  Lastly, it is meant to get votes for politicians to get into and retain their offices.


I wouldn't say that ...

Most social spending is well intentioned but misguided efforts to change outcomes without addressing the conditions that led to these outcomes. The reason this approach is taken is that it is politically easier.

For example, creating an economic environment where households with 1 or 2 individuals working full time can cover their basic expenses with adequate cash left over for small luxuries is much more difficult than giving out food-stamps to those individuals who can't achieve this.

Any well intentioned aspects of it are tied to placating the guilt of society regarding the poor.  The intention is to try to make the problem go away.  End result is that it doesn't go well.  In short, people feel guilt and want the government to do something about it, or try to do something about it.  Well, at least they want it done, and a politician then campaigns on it.



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Kasz216 on 03 January 2012
theprof00 said:
Kasz216 said:

The news I watch talks about it everyday.

To be fair though... I pretty much only watch CNBC.  Nothing on between 4-8 Am on the West coast really.

As for "Solve" it depends on your definition of solve.

It's all a matter of forcing irresponsible countries to cap spending at +10% of revenue or so, while actually enforcing it and having regulators check out all the "budget tricks" countries use to hide how much they're really spending.

Ironiclly, europe essentially needs a "Balanced budget ammendment" like everyone was making fun people in the tea party for suggeting in the US.   Funny part is a lot of  Europian leaders agree.

Though while this DOES stop the crisis, it will likely put Europe in at least half a decade of recession and in generally puts the world closer to a "United States of Europe."


Anyone with a pretty decent knowledge of US history could of told you this was going to happen too.

http://www.thehollandbureau.com/2011/12/10/from-eurocrisis-to-united-states-of-europe/


I'm pretty sure that out of the 1000 or so retarded tea party ideas, this was not laughed at.

I call myself an independant leaning liberal, but I've seen the balanced budget amendments, and debt-term limits for elected officials when running a deficeit, or capped earnings, etc, and those all sound perfectly rational. I don't know anyone who really disagrees with those.

It's almost everything else they have to say that is laughed at.

No, that was actually one of the most made fun of things.  I'd just guess you weren't paying much attention to the coverage.

People called it idealistic, generally unrealistic and stupid because it didn't allow more spending in times of emergency, or if it did, would need specific framework and political action that would delay response times.  (Which could be solved by just... running a surplus and saving for disasters but whatever.)



Kasz216 on 03 January 2012
Vertigo-X said:
Kasz216 said:

It actually is when you consider that wealth isn't "fixed" we have more "money" and value  in society today then we did in 1980 both in real and subjective terms.

It's just a matter of only making responisble loans and having good risk threat assement models.  The problem with the morgage crisis was that the risk threat assement models didn't take into account a national housing bubble.  (And actually it was more a international housing bubble, the US bubble  is just the most talked about.)

Largely this was because a national housing bubble was generally unheard of.  Housing bubbles happened all the time, however whenever there was a down market in LA, there was an up market in New York, or Miami or Buffalo.... so by offsetting risk with other morgages in other cities, it always seemed to make sure the banks at least broke even.

However we got into a push to extend bad credit to people who couldn't afford it to push the American Dream. (homeownership in the modern age.)  Which led to some bad defualts, which lead to "lower end" responsible people getting hit, going straight up the latter like a chain.


Thinking about it purely in terms of money, I'd agree with you. What do you think about the sustainability of produced value (food, technology, natural resources, etc) under this model? If the growth in amount of currency doesn't match with the growth of the end products, where does it take the currency's value? Production looks pretty good now, but what about in the future when production growth isn't as great as it is now?

That's where deflation comes in. 

Or Inflation if there is more growth then money supply.

Which is generally why most countries target for slight inflation.

 Though that's largely irrelevent for loans, since a loan doesn't require economic growth, so much as PERSONAL economic growth.

Hence why loans should only be taken out for things that will increase your economic potential, A house, car, stuff like that.

Or, at the very least something that gives you a significant "psychic benefit" that your willing to pay more for then it costs to have it early.