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Everything You Need To Know About Europe In Three Charts
Juxtaposing Merkel's (righteous and principally correct) insistence on debt brakes and fiscal discipline with the socialist tendencies of her European (let us print) comrades is at the heart of the crisis in Europe. Nowhere is that more apparent than in these three charts, from the World Bank, which highlight just how large in absolute and relative terms Europe's social protection based government spending has become. This situation will only get more demanding as by 2060 almost a third of Europeans will be over 65 years old. While there was a belief that Europeans were willing to accept less growth for better growth (cleaner, smarter, kinder?), in order to meet the needs of an increasingly heavy 'social' burden, government debt brakes will clearly have to be unhitched further, no matter what Merkel demands (increasing tensions), or the 'new growth model' that is heralded but not yet substantive will have to be a miracle.
World Bank: THE PRECIPITATE PROMISE OF SOCIAL PROTECTION
Europe will have to make big changes in how it organizes labor and government. The reasons are becoming ever more obvious: the labor force is shrinking, societies are aging, social security is already a large part of government spending, and fiscal deficits and public debt are often already onerous.
In dealing with government spending, deficits, and debt, it is sensible to start by asking whether European governments are too big; that is, whether they spend too much. They are obviously bigger than their peers. In the EU15, governments spent 50 percent of GDP in 2009; in much of the rest of Europe, this share was about 45 percent—versus less than 40 percent in the United States and Japan, 33 percent in Latin America, and about 25 percent in emerging East Asia. A map of the world resized to reflect government spending instead of land area shows how Europe might look to outsiders (figure 16 below).
Governments in Europe spend between 7 and 10 percent of GDP more than their peers elsewhere—viz., countries at similar levels of per capita income. The difference is mostly the spending on social protection. For example, Western European governments spend about 10 percent of GDP more than the United States, Canada, Australia, and Japan. The difference in social protection spending is 9 percent of GDP (chart below).
A staggering 58% of world government spending on social protection is European.
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1. Europe is full of hipsters.
2. Europe is full of rioters.
3. Europe is full of banksters.
At least, Europe is spending the money it doesn't have (any more) for people's lives, while the U.S. spends it for other people's sudden death.
As an €-American I'm torn by your comment. Let's just say that between us we're living a life-in-death and split the difference...
I dunno who this, "Rest of the World," guy is, but if he's spending more than us on his military, we're in trouble.
-GHW
+3.1415...
That's an irrational comment.
i!
Don't worry, as an American I wish we hadn't been subsidizing Europe's military for decades as well.
Exactly, it is easy spend money on social programs, when you have someone else protect you. Fuck the Europeans.
True, but you run the risk of making it seem like America is any better. We're shitty in our own way. For example, it takes weeks of debate to extend unemployment benefits, yet it's a given that no amount of money is too great to give to the TBTFs so that they can give the appearance of solvency. Regardless of what you think about unemployment benefits and food stamps and the like, that is just fucked up, period.
There is some truth in that, granted. However, the 850bn+ spent on invading Iraq (and thereby strengthening Iran and destabilizing the entire region), the billions wasted on invading Afghanistan (the Russians, after all, were just too dumb to succeed there, no?), killing millions of innocent people in Vietnam etc. isn't exactly related to the protection neither of American nor of European lives.
Chump, having the world's reserve currency is the equivalent of collecting subsidies/tribute.
Whenever Ben prints, he collects funds for the empire, from all the holders of USD, which are, in order of magnitude:
1) the foreign Central Banks, 2) the global banking system and of course 3) you.
Some of those funds are used to keep the "extraction system" afloat, hence the bank bailouts.
Your comment about America subsidizing Europe's military is at best uninformed.
No, having the world's reserve currency and viciously debasing it has the predictable results you just outlined. Even the Fed's stated goal of 2% inflation or thereabouts - how they call this stable prices I don't know - is outright debasement, but pales in comparison to the various alphabet soup programs we've witnessed in the past few years. But you know all this. You should also know that if European countries had been forced to fully fund their own militaries without any support (R&D, equipment, personnel, etc. etc.) for the past 40 years, their budgets would look entirely different than they do now. Agreed?
I share your obvious disgust with the machinations of the Fed and America's imperialism.
pan atlantic mega merger(USA+EU) coming up ... creating the world new super reserve currency backed by Europe and USA. lol
Looks like the Northern Hemisphere could stand to lose a few (Quadrillion) pounds. It's never too late to start..............until it is.
Japan is looking kinda chubby too!
We sing this at the office each day.
Panzer Lied (The Tank Song)
http://www.youtube.com/watch?v=SndPb5XohYM
This situation will only get more demanding as by 2060 almost a third of Europeans will be over 65 years old.
Is this a joke? 2060??? Who gives a fuck about 2060?? What's next, by 4552, a third of Europeans will have 3 arms? Seriously, projecting to 2060 is a waste of time.
I think that projecting populations is probably somewhat easier than mutations. But I dunno, X Men First Class was pretty good.
'Governments in Europe spend between 7 and 10 percent of GDP more than their peers elsewhere—viz., countries at similar levels of per capita income.'
Anything from the World Bank is to be viewed with much skepticism seeing as they are continually coming out with rear view 'analysis'
I don't mind as long as their next rear view analysis takes a look at Miss Kardashian.
They can probably fix everything just by weighting health care to eliminate all but palliative measures for European units over 70..
Just like they will eventually do here.
Europe provides the highest standard of living on earth for the Unskilled which is why it attracts the Unskilled from the Third World and harnesses the Educated and Skilled to servicing the needs of the Unskilled. Never before in human history has an income been guaranteed to All-Comers irrespective of national origin and skillset to be paid at least 60% Median Incomes through NOT working
It's the same with every program every where. If you are not made responsible for yourself you become fat, lazy and dependant allured to a sedintary life.
Social protection bubble meets the housing bubble.....POP!
Great stuff!
One thought along the lines of "lies, damn lies and statistics"- in the US, the health care industry is nominally "private", but in fact it's subject to ever-increasing government control (just like banks, auto companies...) This will become even more true in 2013 when health care reform kicks in. How would US spending compare like if, like Europe, we had a direct government-paid health care system. A "single provider" system which we seem to be moving towards.
According to Wikipedia, the US spends 16% of GDP on health care. The only country in the world that spends more is East Timor!
TMP: Too Many Promises, Too Many People.
Menu options: Stealth default or cataclysm.
TMP: Too Many Promises, Too Many People.
Menu options: Stealth default or cataclysm.
No trifecta? Shame. And such a gem...
Like a fat man on a treadmill, something's gotta give.
I grew up in Michigan in the 70s. A lot of people moved to Michigan because it had some of the most generous welfare benefits in the US. Interesting. That indigents from across Eastern Europe, the Middle East and North Africa have found a home in France and Germany doesn't surprise me in the least. I used to wonder why people from hot, arid lands would move to The Netherlands. I wonder no more.
You add in the private spending for health care and there is no difference from the United Sttes. Yet Europe has a much better social safety net. When the bad times comes I think this will result in much less crime/violence than in the United States.
I would believe just the opposite would occur. With a higher dependence rate (and to a greater degree) there are going to be a lot more pissed off people in Europe, hence more violence. Considering the recent melting pot of cultures, this might be even more exagerrated.
Wow, coincidence that food stamp usage has skyrocketed under the current administration?
No no no, you must have missed when Obama clearly explained how rising food stamp usage is Bush's fault. What will that dastardly demon do next??
http://www.realclearpolitics.com/video/2012/01/27/obama_on_being_called_the_food_stamp_president_bush_was_not_me.html
Damnit, out of office for 3 years now, and George W. is still fucking things up with the deficit and the unemployment and the food stamps. WTF?!
But seriously, the buck stops anywhere BUT here.
The economist Ludwig von Mises showed in 1920 [1,2] that since a socialist economy destroys price information via government intrusion, the myriad of participants in the economy are unable to make a fully rational calculation about true profit and loss. Any economic activity that operates at a loss cannot be “sustainable”, a concept the left loves to scold us about, yet cannot really grasp.
Taking another approach, the Nobel economist F.A. Hayek showed that a national economy had such an immense myriad of dynamic economic relationships that no single committee or bureaurcracy, no matter how smart or how well staffed, could possibly know enough to direct prices or production levels. His Nobel Lecture [3] was entitled The Pretence of Knowledge. Hayek had previously used this idea as the basis for a very thorough article [4] on the subject, “The Use of Knowledge in Society.”
When these two different withering critiques of socialism are combined, it is easy to see that not only is it dangrously foolish to think that economic decisions can successfully be made by government, but that competing bureaucracies will invariably react to the consequences of intrusions in the marketplace by each other. It would be like trying to control the height of waves on a lake by measuring them from the back of a boat circling in its own wake.
"Mr. Keynes's aggregates conceal the most fundamental mechanisms of change." --FA Hayek
Socialism is also morally bankrupt, for it demands we accept the premise that we can each live at the expense of others, despite how this violates the Commandments that forbid coveting and theft.
[1] Economic Calculation in the Socialist Commonwealth by Ludwig von Mises
http://mises.org/pdf/econcalc.pdf
[2] Why a Socialist Economy is "Impossible" by Joseph T. Salerno
http://mises.org/econcalc/POST.asp
[3] The Pretense of Knowledge
http://mises.org/daily/3229
[4] “The Use of Knowledge in Society,” American Economic Review, XXXV, No. 4; September, 1945, pp. 519–30.
http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Fti...
Sarkozy just raised taxes... problem solved.
A very strange set of graphs.
To decide to chart what the government spends in these areas rather than the total spent makes little sense. If you add private plus public spending in the US on medical care then it exceeds that for any EU country. Is it spent efficiently - who has the better outcomes as measured by life expectancy, quality of life - then the EU does better.
If the choice is government spending, assuming they do not borrow to spend, or old folks starving in the gutter, then the choice is easy.
Bottom line - we learned nothing in these three charts.
Rating for article - they won't let you vote zero, which is too bad.
The important fact is that Europe is spending 50 PERCENT OF GDP EVERY YEAR! Now that they are going into recession AND have aging demographics, if it was possible, they would be on trajectory to spend over 100 percent of GDP annually.
This is why bailouts cannot solve the problem. Unless there is permanent changes, even if they wrote off all of their current debt, they would be insolvent again within 3 years.
Merkel currently talking about the need for fiscal union, shortened in our acronym-happy world to "FU." How appropriate!
the occupy Jakobites would have you think more should be taken from the producers and handed over to the non-producers, only one direction, only one destination, it is only a matter of time.
Money for nothing and chicks for free... Yeah, we all want to live the easy life. SOMEONE PAYS THOUGH.
http://www.vh1.com/video/dire-straits/18177/money-for-nothing.jhtml
The chart would be more interesting on a per capita basis.
They're talking up the Golden Cross on CNBC so things must be peachy.
(/sarc off)
You can't build social programs by offshoring production via crony capitalism and parasitic banks.
Or, said another way, parasitic banks and crony capitalism with privatized gains and socialized losses necessitates failure at both.
Savings rate would be useful
European governments spend money more efficiently than US semi-private companies on health care as measured by life expectancy and self reported quality of life. Giving people food and apartments does more for the average persons quality of life than buying tanks and aircraft carriers and hiring people to operate them. Likewise spending trillions to support Iraq and Afghanistan only degrades average Americans quality of life. And let us not forget, Europeans PAY for this stuff themselves. US borrows half of it from China and Japan.
Don't destroy the American dream; let them eat cake on Chinese money and Euro spreads!
Genetic fitness is determined by the number of fertile offspring. Ever wonder why?
So, if Europe had to pay for their own defense, their "Quality of life" would decrease? Something's wrong with that equation.
Economics now replace wars; you live or die depending on performance on economic field. Protectionism is statist paradise, like building a Trojan wall, with borrowed Helen inside, primed up by Paris's pump after a spectacular slam dunk on Spartan Menelaus; but it ends badly. Andromache now the queenly prize, there where Helen was the enticing excuse. Its always about women, the golden snitch that makes us itch.
The face that launched a thousand ships becomes second string; as her replacement, the butt that sprung the Ultimate king : Alexander the Great, is the stuff that allows the Trojan legend to become History.
And as corollary, the man who ejected from the Horse's belly, having injected first the marvel into Troy's palatial night, then goes around the world in ten year Odyssey and returns as iconic father of every future adventurer; drinking nectar with a dolphin witch called Calypso and avoiding Charybdis and Scylla to escape Circe, Giants and Cyclops, all awesome NFL teams of Super bowl fame.
Only today the Oligarchs don't have a woman to acclaim or blame for making financial war on Eurozone. Carla should have been Merkel for the derivative spread eagled fun to become more mythical. I vote that we demote Merkozy and name Carla n George C in their place; not Dubya, for God's sake! You can keep him in the Alamo as relic.
As George says here in Eurozone : Nespresso what else!
So you don't agree with Hobhouse who produced the text Lenin filched for
Imperialism, the Highest Stage of Capitalismfor which we now read Globalisation instead of Imperialism, that ALL wars are economic ? The First World War was economic, Britain trying to restrain an effective economic competitor before it built a maritime fleet.. What is the EU after all, a multi-lateral treaty organisation in place of the old bilateral treaties to produce a customs union simply on the Wilsonian Premise of Open Agreements Openly Arrived At in place of secret treaties.
I don't doubt it, but before capitalism...it was slightly, only slightly, different; wars were fought for GOd, for women, for blood line succession AND economic reasons.
Don't you like Nespresso? And Helen?
that top "chart" is freaking hilarious! L0L!!!
look at japan!
where's africa?
hearken to the heavenly chorus that debt-ridden nations would be fools to cut their spending in this 'economy'...
we are doomed, BiCheZ!!! doomed!
Yeah, at first I mistook South Korea for Japan, and wondered what that rightmost blob is...
I thought Canada was doing something with all their taxes.
As portion of GDP, Canada spends around the same as America, as noted in the article. Since we have about 1/10th the population and 1/10th the GDP, and the scale is by total dollars spent, it looks small on that map.
The higher taxes we pay is the reason why we spend about the same amount of GDP per year as the American government, without borrowing quite so much.
I'm sure someone can tell me how it's worse to spend on social protection (actually helps people, builds infrastructure, adds jobs, health care etc) as opposed to spending that much on the military (kills people, destroys infrastructure, produces nothing but profits the elite)? If you're going to spend at these levels and accumulate massive, unsustainable debt, at least the Europeans did stuff that was humane.
Military and Social Protection... and when you add the private side of 'growth': autos and banking, it's no wonder our global economy is in more trouble than these assholes will admit. Imbalances, imbalances, imbalances...
The debt obligation is considered secured, if creditors have recourse to the assets of the company on a proprietary basis or otherwise ahead of general claims against the company. Unsecured debt comprises financial obligations, where creditors do not have recourse to the assets of the borrower to satisfy their claims.Thanks.
Regards,
Gainey Ranch