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Economics Discuss European Fiscal Crisis: Lessons for America at the Political Forums; Wanna see a hot little Italian, economic, brainiac explain what went wrong in Europe, and what to avoid? The European ...

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Old 11-19-2011, 02:31 PM
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Default European Fiscal Crisis: Lessons for America

Wanna see a hot little Italian, economic, brainiac explain what went wrong in Europe, and what to avoid?

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Old 11-19-2011, 08:54 PM
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Default Re: European Fiscal Crisis: Lessons for America

That sounds more like typical rightwing anti-big government talking points.

A large part of Europe's fiscal crisis has more to do with the fact that it is a group of countries united under a single currency but not a single set of economic rules. Some are very undisciplined (Greece) and others much more disciplined (Germany). It's very different from the U.S. system of states.

Unfortunately, I can't quite figure out how the Greeks, for example - are rioting against austerity measures like increasing retirement age etc - when their country is going to go bankrupt if they don't - money isn't going to magically appear no matter how much they riot
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Old 11-19-2011, 09:34 PM
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Default Re: European Fiscal Crisis: Lessons for America

Might as well paste in those "talking points", so people who don't click videos know what we're talking about.

Quote:
1. Higher taxes lead to higher spending, not lower deficits. Miss Morandotti looks at the evidence from Europe and shows that politicians almost always claim that higher taxes will be used to reduce red ink, but the inevitable result is bigger government. This is a lesson that gullible Republicans need to learn – especially since some of them want to acquiesce to a tax hike as part of the “Supercommitee” negotiations.

2. A value-added tax would be a disaster. This was music to my ears sinceI have repeatedly warned that the statists won’t be able to impose a European-style welfare state in the United States without first imposing this European-style money machine for big government.

3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video.

4. Nations reach a point of no return when the number of people mooching off government exceeds the number of people producing. Indeed, Miss Morandotti drew these two cartoons showing how the welfare state inevitably leads to fiscal collapse.

5. Bailouts don’t work. This also was a powerful lesson. Imagine how much better things would be in Europe if Greece never received an initial bailout. Much less money would have been flushed down the toilet and this tough-love approach would have sent a very positive message to nations such as Portugal, Italy, and Spain about the danger of continued excessive spending.
and here's the graph she uses...



Quote:
Our chronic problem has been the gap between our level of spending (20.3% of GDP) and our revenue (18.0%) of GDP. Note that the exact same tax regime that existed in 2007 and produced slightly higher revenue than the historical average is still in place today, which shows that tax rates really aren’t an acute problem. Our acute problem is that we have escalated spending levels dramatically, and that is what we need to address, not the tax rates.
More on his here...

Video: 5 lessons from the European fiscal crisis Hot Air
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