Knowledge is power
Socialist/Progressive Hannes Swoboda writes that Europe can spend its way to growth!. Especially now since, politically, the auterity measures have been shown to be in disfavor.
Europe is back on the right track. With François Hollande as the new French president, we have made a significant step toward growth and the revival of the damaged European economy. Mr. Hollande’s plan to present the June European summit with joint French-German proposals for a growth pact is right, and—in these turbulent times—finally a ray of political hope
YEA!!! Europe is SAVED.
n view of the rising levels of debt compared with gross domestic product in most European countries, we must take stock of the disastrous effects of the one-sided austerity politics and also recognize their antisocial character, proven by record unemployment figures. The collapse of some governments—notably in France and Greece—and the increasing strength of extremist parties further demonstrate the political danger. How many more facts does it take to end these austerity policies?
Humn … how about this fact?
Look at this chart. It is based on Eurostat data which you can find here. Following years of large spending increases, Spain, the United Kingdom, France, and Greece — countries widely cited for adopting austerity measures — haven’t significantly reduced spending since 2008. As you can see on this chart:
* These countries still spend more than pre-recession levels
* France and the U.K. did not cut spending.
* In Greece, and Spain, when spending was actually reduced — between 2009–2011 — the cuts have been relatively small compared to what is needed. Also, meaningful structural reforms were seldom implemented.
* As for Italy, the country reduced spending between 2009 and 2010 but the data shows and uptick in spending 2011. The increase in spending represents more than the previous reduction.
The most important point to keep in mind is that whenever cuts took place, they were always overwhelmed by large counterproductive tax increases.
But, never mind. Progressive minds have bigger things coming up the chute.
We actually need to go a step even further. The EU member states should not only be forced to limit their debt in accordance with European treaties. The European institutions should enact legislation that requires all members to make public investments in growth and employment.
In addition to fighting unemployment, such investments would finally lead us onto the path toward a seriously environment-friendly economy. A shift toward more renewable energies is not taking off so far. We have agreed on great goals within the Europe 2020 strategy, but we hinder their achievement by tough austerity policies.
These additional investments need to be financed, one way or another. A financial transaction tax and a more efficient fight against tax evasion could channel additional funds into national treasuries. And once growth takes off, tax revenues will start flowing. Tax policy that favors lower-income classes and better regulation of financial markets would already be fostering growth.
Amazing. Truly amazing.