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View Diary: Unemployment hits new highs in Spain and France (25 comments)

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  •  One idea: Get off the euro and borrow from IMF (0+ / 0-)

    It will be a good test to see if the IMF really has moved away from its one-size-fits-all austerity solution of the past.

    Devaluing the peseta and the drachma would make the Spanish and Greek economies far more competitive.

    •  Their borrowing needs are too big for IMF. (0+ / 0-)

      Spain and Greece need to make major changes in their economy to get their private sector growing far faster.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Fri Apr 26, 2013 at 10:07:48 AM PDT

      [ Parent ]

      •  That's austerity right there (0+ / 0-)

        Make major changes "to get private sector growing" faster.

        But the logic is backward. By killing the economy and killing credit, you destroy tens of thousands of private businesses. Until there's nothing left. Then maybe you can grow faster. Out of nothing. Obviously you'll grow when you've been reduced to rubble.

        Tens of thousands of very profitable businesses have gone under.

        And this week, the Greek Parliament was forced to get rid of minimum wage for under 30s. It used to be $5,000 a year, in a country that has a higher cost of living than the USA.

        We can look at Germany's Treuhand to see if this model works. It was supposed to raise over billions in funds from the sale of East German "assets" but in the end, it cratered private enterprise in East Germany, it lost billions on the sale of assets (as the Treuhand commission took more money than it raised) and 4 million jobs were lost.

        Here we are, two decades after reunification and Treuhand, and East Germany still has double the unemployment rate that Western Germany does.

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Mon Apr 29, 2013 at 06:36:23 AM PDT

        [ Parent ]

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