We all know about the ever-increasing trouble that is plaguing the European economy. Some say they are in worse shape than the United States. The collapse of Greece’s economy and the threat of the same fate to other members of the EU are making the future bleak for many, and for others, the search for a solid plan is needed.
Germany provides some chance of hope in the economic dark, due in part to their sustained amount of unemployment and GDP growth. This could be attributed to their exporting specializing mainly in luxury cars and goods. However, while it is deemed “volatile”, if the Germans were to suffer a decline along with the rest of Europe, it is believed by many that their recession would be shorter and less straining than others would. While U.S. unemployment in the 2008-2009 business year rose from roughly 7% to 10%, in Germany it only rose from 7% to 8%. This is because German employers were “extremely reluctant to let go of skilled staff”. In addition, many expect the number to actually decrease in the 2012 business year, promising an end to the recession. There is also pressure on unemployed to seek work, which is much different from what occurs in the United States, where it seems that whenever the media cover the subject of unemployed, it is always the same negative message about how everyone is upset that those without work “give up” on their search. If there were more incentive and/or assistance given, along the lines of reform to corporate taxes, then businesses would be more likely to not lay-off nearly as many, and keep more Americans working.
This all depends on the leader’s reform and usage of money. The Germans are planning to increase government spending, in hopes of preventing a further rise in unemployment. Families will see a 100 Euro ($136) monthly stipend for not enrolling children in day-care centers, money will be given for public roadwork projects, and taxes are proposed to be cut. This is the simple formula for expansionary fiscal policy: increase government spending and decrease taxes. Chancellor Merkel is attempting to curb the recession by spending money, in an effort to pump money into the economy through more wages for workers, and more money left over by the decreased taxes. In order to end the global recession, we cannot rely on a few strong economies. While it would help others, providing an example and also assisting those in need, the world’s leaders must come to their senses and make fiscally-responsible decisions that will give their people jobs and money to provide for their families.
http://www.economist.com/node/21538183
http://www.tradingeconomics.com/unemployment-rates-list-by-country
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