This post is from Andrew Zvirzdin, who used to be a guest blogger, but now joins Atlantic Review as part of the team. Andrew is originally from upstate New York and is currently finishing his second year of grad school at the Maxwell School in Syracuse
After the implosion of the Dubai miracle in the desert, investors are nervously looking elsewhere for the next debt debacle. No small wonder that the focus has turned to European countries with high debt loads such as Greece and Italy. Top European monetary gurus have been quick to assure investors that no European default is likely. But these days, anyone with a big credit card bill looks suspect in international finance.
The remarkable thing is that the EU has taken a significant lead in charting the course towards global economic recovery, despite its heavy debt burden. Consider for example that Germany and France were among the first countries to escape the present recession late this summer. Their robust growth was due in part to automatic stabilizers already in place when the financial crisis hit. And the notorious-and by some estimates, beneficial-cash-for-clunkers program in the US was inspired by Germany and other European countries who already had similar but more successful programs.
Now, as Europe is fading as the American health care punching bag, the continent's ability to live with government debt is under close scrutiny. Paul Krugman has recently warned (here and here) against an excessive focus on fiscal deficits in the US, pointing to Europe as an example: "If these countries can run up debts of more than 100 percent of GDP without being destroyed by bond vigilantes, so can we." CNBC is less positive in its assessment but acknowledges that Italy's resilience despite high debt levels means there is still a "lot of debt tolerance out there."
Still, debt will remain a worry on everyone's mind for some time to come, though the Eurozone has the tools needed to weather this storm (as I have written about here and here), and the US still has its financial strength. With the US and European countries consistently ranked as among the most indebted countries in the world, both sides of the Atlantic will likely need to work together on debt-related matters. Indeed, as the eurozone has already shown, teaming up with other indebted nations makes it that much harder to be bullied around by international markets.
Americans and Europeans spend the same share of GDP on health care and education. "Properly measured, Mars and Venus spend the same share of income on these tasks," concludes Jacob Funk Kirkegaard from the Peterson Institute for International Economics: "The only meaningful difference between US and European expenditure levels is in private-sector healthcare spending, where the US private sector spends about three times more on healthcare than its European private-sector counterparts." (Read a summary of his paper on Atlantic-Community.org.)
Do Americans get better health care, given that their GDP is bigger than Europe's? Nope, in 2006, the "US performed poorly -placing last, in fact - among the six countries surveyed on six key domains of healthcare: Patient Safety, Effectiveness, Patient-Centeredness, Timeliness, Efficiency and Equity," writes Dialog International.
Related posts on Atlantic Review: "If It's From Europe, Forget It" and Other Comments on Health Care and Europeans are taller than Americans.
Update: The Red
Cross has not received enough donations after Katrina, reports the Washington
American Red Cross asked Americans to give more to help hurricane victims,
saying the $853 million donated for Katrina is less than half what's needed.
Rita will require even more.
not yet agreed on how to pay for the estimated $ 200 billion to rebuild the Gulf Coast
after Katrina's destruction, but NASA proudly presented plans to spend $104
billion to return to the moon. While
Rita's destructions will increase the federal bill and the debate about national spending priorities considerably, Katrina has,
according to the Dallas Morning News, already
the fiscal and social debate about how the nation can care for the poor and pay
for the retirement of the baby boom generation while maintaining tax and
economic policies that stimulate investment and growth. Those concerns,
combined with worries about chronic budget deficits, have spurred lawmakers and
lobbyists to dust off their favorite ideas on taxes, spending and pork.
Continue reading "How to pay for Katrina and Rita?"
to get out of Iraq
intensifies as well.... Here are some of the proposals to pay for the
rebuilding of the Gulf