How justifiable is a single currency in Europe when countries like Germany end up pulling the economic weight of Greece, Portugal, Italy and Spain? What will happen in the euro to make the move to a single currency become more than just a tool of economic convenience? Did Spain jump the bullet in its recent 100Billion Euro infusion from the ESFS? Will it be possible in the future for the economic production of countries like Spain Italy and Greece to match that of Germany? Many other countries in Europe and around the world, including the United States have taken loans on debt, and inflated their credit to stimulate their economies.
At what point does currency become worthless, and money effectively run out? In recent decades, the connection between government, banks, and financial entities like the real estate market has become more obvious than ever. Taxes, price and rate controls, and currency adjustment have limited reach in terms of economic growth. Eventually America, as well as other countries around the world will need to take stock of the resources that they have, and use them to build their economies. The major economies of the world are more competitive than ever, and it is inevitable that most people are going to have to endure transformation and temporary austerity.
There is no way that Greece and Spain as well as many other major world economies will be able to avoid having to endure major transformation in the coming years. In Greece’s current election, there is an idea being floated that they can be treated the same as Spain in terms of borrowing money from the ECB. But Germany has made it clear to the Greek government that it will have to undergo major austerity if it decides not to default on its debt. At least for Spain and Ireland, and the United States, their banking troubles are due in a large part to a real-estate crash similar to America’s bursting real-estate bubble in 2006-2008. However, countries like Italy, Greece, and Portugal have much larger issues that they have to deal with. Government programs and employment are limited, and so is the amount of money citizens are willing to pay in the form of taxes for their pensions. Assessment needs to be taken as to whose government services are important enough to warrant lifelong pensions.
Due to its inability to fully take advantage of its resources, and drastically grow its financial markets, Europe’s financial woes are much more severe than America’s. At least in America, there is still a strong small business sector. America also has an immense amount of resources and arable land. There is also a large amount of closed infrastructure that can be re-opened and re-used. Government could lessen regulation on American business, as well as lower corporate taxes. Government entities like the EPA can allow room for use of resources allowing for a larger financial return. To a great extent, America can build its way out of recession. But America has its own financial woes due to outdated government run financing and programs. For example, one can look to states like Wisconsin to notice that citizens are limited in their willingness to pay more money, and sweeter employment terms to those who are in public unions. Even California, one of the most big-government states has had to cut back on spending on healthcare and unemployment services.
Why is it possible for America to build itself out of recession? The answer is simple- America is possibly the largest country in the world in terms of available resources. Many of these resources are quite affordable in terms of global pricing. It is possible that even developing nations that are plentiful in commodities could invest in American resources. Not only is America abundant in corporate intellectual and managerial property, at the other end of the spectrum of economic development, America is abundant in the type of commodities essential in keeping world economies functioning. These commodities are coal, natural gas, oil, metals and minerals, agriculture, and land, and they are in heavy demand by industries and economies around the world. What America needs right now is a government and a banking system that is aggressive in its support of the free market and the production of American resources.