Reinko

15 Notes on the Global Economy

It is now a day later (there is 6 to 8 hours time lag you know).

It is amazing how many people react on what I wrote, so lets look at a few comments on for example health care:

My health insurance is 110 € a month and the kids are free, to be precise I can voluntary pay about 25 € for dentist insurance.
A lot of people point to the fact that via taxes we pay for the rest of the insurance; that is not correct. Here in the Netherlands the employer also pays a large part.

With or without a job my health care is only 110 Euro, it is impossible not to be insured because by law everbody has to pay for health insurance.
(So there is no large pool of relative healthy people that opt for no insurance.)
Even stronger: The hospitals have insurance against those who are not insured (like illegal aliens).
In short: Here are no millions without healt care.
We might not have a third or a fourth car, but what extra happiness does that bring to society?

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Without backing it up, User64738 knows that we have far higher taxes compared to the USA. That falls into the category of popular myth; I did think that too for a long time but most USA folks pay 30 to 40% taxes on their income and that is pretty much in line with over here.
However in the past this has been a problem here after we had socialist labor parties running the country; above 100000 of income? Easily over 60% was taxed away and at some point in time people in high paid jobs refused to work any longer any overtimes because they more or less worked for free.

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Then otbricki adds that the few trillions towards East Europe will wipe out the Euro. He forgets to mention the logic involved; aren't it the countries that stayed out of the Euro that get the real beating?

The Euro might still be a young currency but without it troubles would have been much greater. Going back to a situation without the Euro would also multiply the problems; once more Europe would be a wheelbarrow with frogs.
Giving up the Euro would be the same as the Americans giving up the $.

Often you hear that in Europe there are no multinational organizations to deal with the problems, that is correct but this also brings the benefit of flexibility; every country can do what it wants where in the USA for exampla California is not allowed to run a deficit (or face Chapter 11 if they do).

And the fact that a lot of banks will go is obvious; there is much to much banking capacity anyway. Let them die!
In the USA before the crisis broke out, financial sector was 20% of the economy. If you think about it; that is crazy, counter productive and such a large size can only work as a parasite on the real economy.

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On the reserve status of the US dollar:

I simply stay with my many year long obervation that the reserve status has always propped up the dollar and the Americans got lazy by that.
I am also hefty against such a role for the € in the future; the first one or two decades it will bring benefits, after that you get similar sizes in drawbacks.

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On obesity rates:

It is well known that in the USA this is a statistic running rampant, in no other nation there are so many very fat people. When people get lazy they get fat, that is as simple as 1 + 1 = 2.

Here in Europe obesity is also on the rise but I never studied those statistics so I cannot make much comment on that.

Bosun.j wrote 130 million Europeans qualify for obesity; that would be a large fraction of the population. I think it is less, lets say 100 million, but it is on the rise so in this regard the crisis is a good thing...

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At last: The 17 trillion of debt the US financial sector has will be a giant producer of future toxic debt. It is not in the news but those folks at CNN or CNBC or Fox News do not understand what happens when debt is above one USA GDP and routinely grows faster then the GDP for a few decades.

Interest obligations (and coupon for bonds) are so huge; this credit crisis hasn't really begun yet.

Printing money will become more important because the sizes of toxic debt will be to large for taxpayer money.

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I hope (although one day late) I have answered some of the things you folks threw up.

Have a nice crisis or try to get one...;)