[andyt]

Back on topic:

As jobless rate soars, Europe rethinks austerity moves

http://www.theglobeandmail.com/report-o ... le2320585/


The grim jobless numbers are forcing some European leaders, many economists and even the International Monetary Fund – co-sponsor of three sovereign bailouts and early advocate of austerity – to rethink the strategy of using spending cuts and tax hikes to try to crunch budget deficits when economic growth is soggy.

“The elevated unemployment rates in southern Europe are partly caused by structural factors, but also reflect the pain inflicted by the draconian austerity programs,” said Martin van Vliet, senior economist at ING Bank. “In that regard, one should welcome any decision to relax unrealistic fiscal deficit targets, as being contemplated in the case of Spain.”

In Madrid, the new centre-right government of Mariano Rajoy is pleading with the EU to inject some “realism” into Spain’s tight budget deficit targets, which are being blamed for killing growth. Spain’s economic output fell 0.3 per cent in the final quarter of 2011. Most forecasts point to a Spanish recession in 2012, when growth is needed desperately to create jobs.

[QBall]

It's not government's job to create jobs, it's their job to create an environment that private businesses will want to set up shop in their jurisdiction and create jobs. That's how a city/province/state/nation creates wealth, not by government employing 25% of the population and providing wages and benefits which are completely unsustainable.

[Prof_Chomsky]

QBall QBall:

It's not government's job to create jobs, it's their job to create an environment that private businesses will want to set up shop in their jurisdiction and create jobs. That's how a city/province/state/nation creates wealth, not by government employing 25% of the population and providing wages and benefits which are completely unsustainable.

I half agree with you, but government employment is also a fantastic way to provide cheaper essential services such as water, roads, electricity, healthcare, schools, and in my opinion even basic internet and insurance. Those government jobs with their supposedly “unsustainable” wages and benefits not only provide low cost essentials for everyone, they also create a competitive environment where private industry has to compete for talent and are more prone to provide extended health benefits, retirement plans, and higher wages.

It may be off topic, but do a cost comparison with privately run US essential services like electric, water and healthcare. Not only do we do it for pennies on the dollar, we provide higher wages to the working class in those industries because we all but eliminate hundred million dollar stock packages for CEO’s, or the need to squeeze profits at the expense of the public. Win, win, win.

I’m in no way insinuating government industry breeds innovation the way private industry can. But an argument could be made toward that as well considering publically funded universities tend to be the hotbeds of innovation.

Call me a socialist all you want, but capitalism is not the solution to anything. All it breeds are profits for people who find ways to cut corners, costs, and corner the market any way they can.

[andyt]

There are some jobs that only govt can do. There are jobs that govt does best - which is why that raving socialist WAC Bennett nationalized BC Hydro, the ferries and BC rail - it created private sector jobs by allowing the opening up of BC to industry. Ie it created "an environment that private businesses will want to set up shop in their jurisdiction and create jobs."

Where govts are stuck is that raising taxes (on the middle class) and cutting spending just reduces economic activity, depresses the economy so there's less govt revenue.

[QBall]

Prof_Chomsky Prof_Chomsky:

I half agree with you, but government employment is also a fantastic way to provide cheaper essential services such as water, roads, electricity, healthcare, schools, and in my opinion even basic internet and insurance. Those government jobs with their supposedly “unsustainable” wages and benefits not only provide low cost essentials for everyone, they also create a competitive environment where private industry has to compete for talent and are more prone to provide extended health benefits, retirement plans, and higher wages.

The problem is government's first and foremost job is to retain power, and they'll do it by any means necessary including by walking on the backs of the taxpayer. They bend over backwards to give in to the demands of their workforce to avoid or minimize disruptions (i.e. the David Miller approach) all the while never sparing a thought for the plight of the taxpayer. And while government may be able to do some services cheaper (not many) I question their ability to do it better. If you ask the average parent if they could get their kid into a private school if they could afford it how many do you think would say no? If government health care is so great why did Danny Williams, Jean Chretien, Robert Bourassa, Joe Clark, Jack Layton and Paul Martin use private clinics (some in the U.S.)? Roads? Why is the 407 (a privately owned toll road north of Toronto for those who don't know) in so much better shape than the 401 (public highway running along the north end of Toronto)?
Plus governments do not create a competitive environment by getting directly involved in it. You can't have a competitive environment when the government is using their "competitors" money to compete against them. That's like saying the CBC creates a competitive environment in the broadcast industry by being given $1 billion in corporate welfare. Plus if that were true then Greece should be the most economically powerful country on the planet. The truth is the Greek government provided benefits to their overly populated workforce that no private corporation could offer or would want to offer, and then expected these same corporations to shovel their money into the government's bottomless gut to pay for it. Governments need to be in the business of running themselves in the smallest and most efficient manner possible.

[Lemmy]

QBall QBall:

Roads? Why is the 407 (a privately owned toll road north of Toronto for those who don't know) in so much better shape than the 401 (public highway running along the north end of Toronto)

How is the 407 in "better shape" than the 401?

[saturn_656]

$1:

Roads? Why is the 407 (a privately owned toll road north of Toronto for those who don't know) in so much better shape than the 401 (public highway running along the north end of Toronto)?

The crooked consortium that runs the 407 doesn't own the road, they have leased it for 99 years under an agreement with Ont. Gov.

Shame I won't live to see the lease expire.