HBG

I know the US somewhat and even got married there. Being such a vast and diverse place, it's difficult to compare it with anything European. But Europe is where the US came from, Brits, Irish, Germans, French, Italian, from all over old Europe.

If you compare what the modern US and modern Europe have become, I would say that they are not much different, but statistically the US has more debt that the EU, and their furious money printing hasn't helped.

One big difference however, is the lack of governmental support for the poorest in the US, they don't have European benefit levels and poverty is more painful than in most European countries.

amideislas

Well, I admit it certainly isn't what you want to hear. But wrong or inaccurate, it certainly is not. There certainly are problems over there (not like there aren't any here: the unemployment rate here is more than double what it is over there, for example).

Also, it's an election year, so naturally the opposing politicians are in exaggeration mode on a grand scale. Some politician said last night on the news that 50% of the population lives in poverty. Now that's ridiculous. But I'm sure you would assume that to be a fact, because it's what you want to hear. Nonetheless, I'm the nutter, not the one who says there's 50% poverty.

Another fact you (and lots of European politicians) don't want to hear is that the problem with the Euro is that there are 17 economies using one currency. This isn't conjecture, it's a fact written ad-nauseum by leading economists.. Spain's economy is not Germany's, so you can't apply the conditions of Germany to Spain - but that's exactly what's happening, and why Spain remains stagnant.

Spain needs to get out of those handcuffs and get it's own currency back so that it can do what every other economy in the world does in times of crisis: Print money.

But naturally, you'll call me a nutter for suggesting such a stupid idea - the same strategy implemented by all the major economies in time of crisis, including the UK.

So, OK I admit it - I'm just another nutter. Just like you.

agoreira

Not even sure it's that good! Just reading the Spanish press this morning I see Ciudad Real airport is closing for a year (no flights!) and they are having to pump thousands of euros into the airport at Alguaire (Lérida), because of empty seats. Someone talks in the comments of the AVE on some route travelling with 7 passengers a day! These were just some of the "vanity" projects I spoke of some time back, but of course it was rubbished by those that know better! Spain has received billions from the EU, it would have been far better investing in something that was going to make money, produce jobs, instead of fanciful schemes that were only ever going to lose money. Spain is covered in grandiose schemes, one autonomous region trying to outdo each other (they all have to have an airport), the majority closed or losing huge amounts of money.

Lynn R

I've only visited Florida as a tourist - but even then, if you take a wrong turn it is so easy to find yourself in a very poor, very run down area where you immediately feel unsafe. It happened to us on our first visit there, with the OH's 2 children in the car, when driving back from Tampa to Orlando. I still don't know the name of the place, and wouldn't ever want to go back there, but we found ourselves in a street with groups of young men hanging out on street corners, full of gun shops, pawn shops and liquor stores. We made sure all the doors were locked and got out as fast as possible.

It was very noticeable that just about everyone we saw on the streets there was black, in direct contrast to the areas more frequented by tourists. I found the huge chasm between the haves and the have-nots there really shocking, just around the corner there are people living very, very different lives to the comfortably off in their gated communities (come to think of it, why do they need gated communities in the first place?).

amideislas

Actually, printing money has cut US debt significantly - that's the purpose.

Here's how QE works (greatly simplified):

Let's say 1 dollar is worth 1 Euro, You owe 1000 dollars (Euros) to someone, but can't pay it. So, the central bank prints 1000 dollars, halving the value of it against the Euro, so the value of your 1000 dollar debt is now 500 Euros.

Of course that's over-simplified, and a central bank needs to be extremely careful about how much money it prints, or else it results in hyper-inflation, but that's the basic point of printing money and devaluing a currency, and it's been going on since currency was created.

It's also what virtually every economy does in times of crisis, but Spain (and the rest of the PIIGS) are prevented from doing so, because it is stuck with the Euro, which is largely controlled by the German economic model which doesn't really need QE. And Germany is now taking the lead role in managing the crisis, so you can bet they will look out for their own interests first.

There are other advantages: Devaluing a currency makes products and services cheaper to the rest of the world. China has been a huge beneficiary of keeping the value of the Yuan low. You buy lots and lots of Chinese products as a result - whether you believe you do or not. Same with the US dollar. US exports to Europe grown significantly in the past 5 years. Without QE, the US would be a lot worse shape than it is. Why do you think the US is so interested in getting the Euro debt crisis solved?

Amidst those advantages, Spain has another problem that could be solved through QE: In the boom times, the socialist government implemented one of Europe's highest wage and benefit policies for public workers. Public workers in Spain make nearly double what's Germany's public workers make, and their benefits are equally absurd.

In reality, Spain couldn't really afford these generous policies, but living in a bubble, they made the deal and now are stuck with it. Now during the crisis, life is damn good on the public dole, paid for by... guess who? I know plenty of people that are living well from it, and have been long unemployed. To roll this back as an austerity measure would cause public revolt and political chaos. No politician wants to take responsibility for that.

Now just about everything Spanish is too expensive - and these costs eventually end up in Spanish products and services. It's simply too expensive to do business in Spain. Therefore, businesses that employ people aren't starting up or moving to Spain. Some are moving out. It simply isn't fiscally responsible. Better to stay in Germany or Poland or Slovakia...

Agriculture over-production in Spain? I'd be more inclined to believe that it's over-priced, not over-produced. If Spanish produce were cheaper, they'd have no problem selling it. The demand is still there and strong as ever.

So, if Spain were to go back to the Peseta, valued relative to the Euro, then subsequently print money and devalue of the peseta against the Euro, then the cost of labour (and virtually everything Spanish) would become much more competitive without the unpopular/disastrous austerity measures that Spain would otherwise be forced to implement.

Further, Spain should implement extremely business-friendly policies. Offer huge tax breaks to both small and large-scale businesses. Get companies to open plants here, encourage start-ups and investment...

You think Volkwagen pays much tax in Germany? No, their employees do...

jackytoo

America may not have a welfare state like the UK but it provides more welfare benefits than Spain. Of course it is not good to be down and out in America but it isn't in Spain either when unemployment benefit has run out.

Almost everything costs less in the US and one of the reasons Europe is so expensive is the EU policies. IVA is reaching 23% in many countries. Sales tax equivalent in USA is under 10%.

amideislas

Sounds like a few areas I know of in Madrid, Paris, and Berlin.

Bigger Jim

You seem to have missed out the Hispanic population of the US.

July 1 2009 - 48.4million Official Census.

Jim

EsuriJohn

and London, Birmingham, Bradford and Liverpool.

Lynn R

I'm perfectly well aware that there are run-down areas in all major cities - but I was replying to your statement that you had visited the USA and never seen any evidence of poverty. You must have gone around with your eyes closed.

And one important difference between the USA and Madrid, Paris and Berlin - there are no gun shops to be found on your local high street in any of those! They are undoubtedly available on the black market to criminals but at least anybody slightly unhinged or with a grudge against society doesn't have a legal right to carry one.

cricketman

General tat costs less in the US but the important things cost a hell of a lot more

e.g. at least $700 per month for basic health insurance
going to nursery part time there is around $700 per month also, compared to 50 euros here. Rent is a lot more expensive almost everywhere, my relatives pay $1200 per month to live in basically a cardboard shoe box - and thats not even near a major city

People can live in the USA if they like, it has plenty of good things too, but to suggest the quality of life is better than in Europe and that it is cheaper is ridiculous

cricketman

Almost everything in this post is wrong. I dont have time to go through it all. Can I be rude and ask if you ever went to school past the age of 14?

I havent got time to go through it all so I'll just make one point re wages in Spain

I know several funcionarios. In fact someone in my family was the head of social services for one of the provinces. Earning may 50k euros. In the UK she would have been on £150k. So the salary was almost a quarter that in the UK. Another person I know earns 1500 euros per month as a paper pusher, been there for 20 years.

Drs in Spain can earn as little as 30k euros per year

I will bet a lot of money that German salaries are a lot higher in the public service!

Rosemary

I would have thought that there are very few places that do not have areas of people living in poverty.

When we went to Jersey for a short break we came across a really run down terrible estate on the edge of St Helier. Having just rubbed shoulders with so many rich people in the centre of the town doing their Christmas shopping it was a bigger shock than it would have been if we had just been touring around.

Rosemary

jojojojojo

Why do you have to be rude???? Simply saying you disagree is quite adequate and less inflammatory

Jo

amideislas

I didn't say that. That was your interpretation.

I simply said they seem to live a much higher standard than we do - and find it curious that such an impoverished nation can live so well, complain about it, and maintain a 15 Trillion GDP - the world's largest. My conclusion is that the exaggerated nonsense I've been constantly told about the horrible condition of the US is either the result of a fad, political campaigns, jealousy, or just plain ignorance. What I see on the ground just isn't very supportive of the popular perception.

Poverty is everywhere - even where you live. There are plenty of homeless living around the streets of Palma, near me, for example. Berlin has many, many homeless. I've seen unbelievable poverty in Paris. Somehow I suspect this is NOT limited to these specific cities.