The European threat to the U.S. economy
Our Readers Who Comment are trading economic theories and pointing fingers at various perceived villains as they debate the sobering news that if something really bad happens in Europe the U.S. economic recovery could quickly go into reverse.
Some readers blame globalization. Others blame Wall Street. Several see not-well-defined conspiracies. Many worry about our own debt and others are concerned that we're skating on very thin ice.
As Howard Schneider and Neil Irwin write, if one or more European governments "fail to make the expected progress on cutting budgets, restructuring economies or boosting growth, it could drain confidence in a broad and unsettling way. Credit markets worldwide could lock up and throw the global economy back into recession."
We'll start with blert, who wrote, "Economic recovery in a lot of foreign countries has hinged on market moves and policy decisions in the United States for decades. It hurts that the tables have suddenly turned. I'm not sure if this is a sign of how much Europe has caught up with the U.S. economically or of how far the U.S. has fallen in the past decade or so. What is clear is that all of the promises of globalization and free trade are coming up empty. All free trade has gained us is a dependence on foreign markets and on weak economies governed by spineless bureaucrats..."
TECWRITE said, "Not a problem! Now, if 12 or 15 countries in Europe can all fill inside straights, all at the same time of course, every thing will be just fine. Oh, I forgot! Darn! If you add the deficits of the state and local governments to the deficit of the US federal government we are in worse shape than Europe. Even an inside straight won't fix that one. Darn again!..."
rdco wrote, "I suspect that the problem is not entirely psychological. Since most government bonds and securities based on them have long been considered "safe" investments--they are also regarded to be part of every investor's capital base (e.g. low risk portion of their portfolio)...The great surprise that south European debt is larger than admitted and politically difficult to get under control, has made a lot of "safe" assets look otherwise!..."
pofinpa whined that "globalization,what a wonderful idea this was. exported our jobs,technology and military presence to every crappy counry in the world and now it is coming back to destroy what is left of the economy that liar in chief and gang started."
douglaslbarber wrote, "how about we go through a period of severe pain meant to teach people to never again forget that big money is not your friend?"
santafe2 said, "We didn't have these problems when we had tariffs. We didn't have these problems when America took care of America First. The basic problem is that the anti-American globalists took control of both political parties, and intentionally destroyed the wages of workers throughout the world so that the wealthy class can make super profits. It's called "savage capitalism." Solution? Either an FDR to control the excesses of the wealthy class, or socialism. And Obama is a tool of the capitalist class, not a socialist."
mike85 wrote, "California is a larger economy than Greece, and is in much worse financial condition. And, there are several other states close behind. The Us needs to dramatically reorganize its finances, or it will make the European Union look like child's play."
infuse said, "The "New World Order" has always been about making international bankers sovereign kings. The so-called European crisis is another BANK crisis. One that will once again call on taxpayers everywhere to bail out more bankers. So when will banks ever pay a dime for their scams? After all, Barack Obama has never met a bank he won't bail out ... even if it's in Europe."
coqui44 wrote, "...My question is: how do you "boost growth" when you cut budgets (more unemployment)? Where do the 'saved' money from the budget cuts goes? It goes to the banksters. We are all supposed to drop dead so that the super wealthy can continue having their super life...."
dilettante replied, "The boost in growth comes from capital being applied, not to the payment of interest on government debt, or the salaries of some government sinecure, but to private industry: the only real source of economic growth.
True, those who currently collect government payments would have to find productive work or be unemployed; but the new investment in the private sector would generate the needed jobs."
COWENS99 noted that "Europe is not fighting two wars, allowed private industry to police themselves, granted tax break after tax break to private industry.
Sorry, could Europe be smarter [than] us?"
shel_zahav said, "This article is way over the top. Most people get on fine without greedy banks and greedier governments and will continue to do so. Those are primarily the people who actually produce things!"
BlueTwo1 wrote, "...My 401(k) exists because the captains of industry didn't want to be on the hook for a pension for me and my family. So, I was supposed to depend on the stock market to earn me a pension that would be ripe for the picking the moment I retire... I invested well and would be set to retire except my diversified portfolio, guaranteed by nothing but hope, tanked in response to the irresponsibility of others..."
pjs1965 said, "Let the euro Monopoly money and the European Union fail. Both are the root of the problem and are bad ideas that will not work in the long run... The euro currency is a political Trojan horse designed to force political union on the unwilling. Every country that had the guts to hold a public referendum on whether to adopt the euro as its currency -- letting the people decide -- wisely rejected it... The European Union and the euro are bad for Europe and bad for the world. the sooner they die off, the better off we will all be."
yellowtavern2 wrote, "The U.S. got itself where it is: by overspending on the military starting in the 80s. Politicians just can't get enough of borrowed money. Greece is just the tip of the iceburg. The U.S. economy is going to go belly up very, very shortly when the Chinese start asking us to pay back what we owe them."
We'll close with canty1, who wrote, "A lot is at stake. We should certainly wish them well."
All comments on this article are here.
May 24, 2010; 9:10 AM ET
| Tags: Economy, Europe, Wall Street
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