The Comeback Continent

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nytimes.com/2008/01/11/opinion/11krugman.html?_r=1&oref=slogin
Paul Krugman:
Today I’d like to talk about a much-derided contender making a surprising comeback, a comeback that calls into question much of the conventional wisdom of American politics. No, I’m not talking about a politician. I’m talking about an economy — specifically, the European economy, which many Americans assume is tired and spent but has lately been showing surprising vitality.
…

But there’s another thing: it’s important to get the facts about Europe’s economy right because the alleged woes of that economy play an important role in American political discourse, usually as an excuse for the insecurities and injustices of our own society.

For example, does Hillary Clinton have a plan to cover the millions of Americans who lack health insurance? “She takes her inspiration from European bureaucracies,” sneers Mitt Romney.

…

Since 2000, employment has actually grown a bit faster in Europe than in the United States — and since Europe has a lower rate of population growth, this has translated into a substantial rise in the percentage of working-age Europeans with jobs, even as America’s employment-population ratio has declined.

In particular, in the prime working years, from 25 to 54, the big gap between European and U.S. employment rates that existed a decade ago has been largely eliminated. If you think Europe is a place where lots of able-bodied adults just sit at home collecting welfare checks, think again.

…

What’s behind Europe’s comeback? It’s a complicated story, probably involving a combination of deregulation (which has expanded job opportunities) and smart regulation. One of the keys to Europe’s broadband success is that unlike U.S. regulators, many European governments have promoted competition, preventing phone and cable companies from monopolizing broadband access.

What European countries definitely haven’t done is dismantle their strong social safety nets. Universal health care is a given. So are a variety of programs that support families in trouble, helping protect Europeans from the extreme poverty all too common in this country. All of this costs money — even though European countries spend far less on health care than we do — and European taxes are very high by U.S. standards.

In short, Europe continues to be a big-government sort of place. And that’s why it’s important to get the real story of the European economy out there.

…

But the next time a politician tries to scare you with the European bogeyman, bear this in mind: Europe’s economy is actually doing O.K. these days, despite a level of taxing and spending beyond the wildest ambitions of American progressives
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I thought this was extremely enlightening. So it is possible to have a strong social safety net and have an excellent economy. And no, Paul Krugman isn’t a socialist, but he believes the government should provide a strong social safety net.
 
The govt has no business providing social safetly nets.

That role belongs to the Churches and charities.

Govt should stay out of it, govt only messes it up, just look at anti-Christian homophile coddling secular fanatic Europe.

btw, don’t watch yugioh gx, or yugioh for that matter, those are immoral cartoons promoting witchcraft.
 
Part of the problem I see is that in 2000 the US was still in the climax of the “dot-com bubble,” so I don’t know if that’s the best initial starting point. Also while in that subject, any instantaneous moment is not always a good representation of an economy. If one is in the middle of a bubble, one is also going to have to figure in the bust of it. If I take out a loan my fiances might look great, so long as you don’t figure in the later months as I have to pay it off.
 
I agree that the United States should have a more extensive and better organized social safety net. I believe this would actually increase innovation and productivity, as I think people who were confident that they would have their basic needs taken care of would take greater risks in starting new businesses, etc.

I am softening to the idea of universal healthcare, as the reality of lack of health insurance has impacted my family strongly lately. Not everyone has the good luck of having a solid skill set and consistent employment, there are some who have problems holding jobs for various reasons, some of them personal. Simply because someone can’t get their **** together is no reason to abandon them in the cold. We must have more patience and charity than that, and a broadbased government solution that coordinates a national program seems to be the only logical way to approach this problem.
 
One aspect that is seldom mentioned is the built-in waste and inefficiency of any government-run program. When they run the numbers, the cost of administering government programs (not to mention fraud and abuse) results in a significant portion of the funds dedicated to that program being swallowed up before it ever gets to the intended beneficiary. This is a major reason why charitable programs are so much more successful.

Another feature of government programs is that they exist to continue indefinitely, and seek to expand. When the goal of a program is to help someone get back on their feet and get back to work, government intervention is often unsuccessful because of the cross-purposes at work.

Last, in regards to health care, there appears to be a common idea that someone who does not have health insurance does not receive health care services. This is false. Such persons still go to the doctor when they are sick, but they pay cash for the visit. Because there are no forms to fill out, the doctors will often give a substantial discount for a cash payment. I have friends that have no health insurance and this is what they do. They don’t run to the doctor for “every little thing”, but when they are sick, they go to the doctor. People that advocate government-run health care are perpetuating a myth that people without health insurance do not receive any health care services.
 
I find the article very weak in supporting evidence. The author tries to make the employment rate and job growth numbers the measure of the relative economies, but fails to realize that Europe’s failure to reproduce artificially sustains their employment rate. In other words, the numbers he touts could easily occur in an economy that is gradually eroding, but at a slower rate than the population erodes.

I find it meaningful that he doesn’t compare GDP numbers.
 
Anything published by the NY Times is subject to legitimate question.

The article, for example, does not compare actual employment rates. It is generally accepted that you can’t get unemployment to go below a certain rate, because part of it simply represents those who are going voluntarily from one job to another. If, say, the U.S. was at that unemployment rate (most say it has been for years) and Europe was at double that rate, (which was true the last time I saw any numbers) a reduction in European unemployment relative to that of the U.S. is entirely meaningless. Notably, the article does not state the actual rates for either.

It could be argued that the unemployment rate in the U.S. is zero or even less than zero for citizens, since the statistical rate is at or near the “full employment” rate and we have a lot of illegals who are working “off the books”.

And, of course, the European population is (for now) greater than that of the U.S. So relatively comparable GDPs, if they are comparable, don’t tell us a whole lot either.

And, of course, if one has to wait a lengthy period for health care, he (or the government, for him) will spend less for it, on average, within a given period than one who has immediate access. If there is an inadequate supply of oranges in the stores in my town and if they are abundantly available in another town, the residents of that other town will spend more on oranges than will I, all other things being equal. But that doesn’t mean my town’s approach to providing an orange supply is superior.

That’s not to say the “safety net” in the U.S. is good. It’s not. Unfortunately, politicians direct most social programs toward the middle class which doesn’t need them, rather than to the truly poor who do. They do that because the middle class votes in great numbers, whereas the poor don’t. Actually, the best “social welfare” program for the middle class is a reduced tax burden.

I agree that the healthcare system needs major reform. But simply throwing more government money at it is not reform. The pricing system is truly insane, and is a big part of the U.S. healthcare system’s problem.

The NY Times article might have been interesting had it had any actual content.
 
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