Posted on 04/18/2012 7:43:02 AM PDT by ctdonath2
Let's try a thought experiment. Imagine you walked into the bank, told them you were going to be taking pay cuts for the next few years, and then asked for a loan. You'd be laughed out of the office or else pay an interest rate so high that "usurious" wouldn't do it justice. The logic is simple: If you're in debt and your income is shrinking, it's mighty hard to pay back what you already owe.
... Nearly a quarter of Spain's population is unemployed. Half of its youth are out of work. And it's only going to get worse. Spain is supposed to trim its deficit by some 5.5 percent of GDP over the next two years. That's not a recipe for growth. Just ask the IMF, which downgraded its projections for Spain's economy back in January.
What matters for a nation is its GDP. That's a country's equivalent of personal income. If Spain's GDP is set to fall for the foreseeable future -- and it is -- then who would want to lend to Spain?
(Excerpt) Read more at theatlantic.com ...
Spain, and lets be honest the US, tried to have a nice welfare system. Of course that just attracted more and more people until the system collapses. Now, there really isn't much for them to do. There aren't enough jobs to fill all the unemployed (Spain is much worse than us here), and there aren't enough people with the right skills to do the higher IQ managing jobs that full automation would need.
I worked for a Spanish engineering firm, and many of them were hard working (and partying). The firm preferred to hire Americans because they didn't expect the same benefits as EU citizens did, and they could fire them at will.
Again, what do you do with the people who are not skilled enough to have much higher than a traditional farm or factory job? If we don't start thinking about that, and soon, we will either have a vast underclass of non workers or civil unrest like the world hasn't seen for a hundred years.
The population is a bell curve. We have been pushing the jobs further and further to one side without thinking about the consequences.
You’ve really touched on a key issue. In the new economy that’s evolved over the last few decades... With massive shifts to automation, and an increasing “knowledge work” and “information economy” or whatever other buzzwords they’re throwing around these days... What it finally comes down to is that there is a growing portion of the population that is simply unemployable— permanently.
The world still needs ditch-diggers and sweepers, but it doesn’t need so many of them anymore. It’s a thorny problem, and I can’t say I know the answer.
This guy wants them to ‘charge’ more?
I'm just guessing but an immediate and wide spread cut of about 10% would probably keep the economy going, and a tax cut to boot would get the economy GROWING...JMO...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.