Those of us who find it hard to fathom that the economic collapse of a few small European nations could bring down our economy are starting to benefit from basic, explanatory stories in the mainstream media.
Liberal New York Times columnist Paul Krugman has a piece that argues it takes more than a coin -- a currency -- to unite countries toward a unified goal, or a unified show of support when economic storms hit.
In citing the near downfall of the Greek economy, Krugman explains the situation in Europe by comparing it to individual American states. The result is an interesting contrast between the European and American political and economic systems.
He's a portion of the piece:
"Consider, for example, what would be happening to Florida right now, in
the aftermath of its huge housing bubble, if the state had to come up
with the money for Social Security and Medicare out of its own suddenly
reduced revenues. Luckily for Florida, Washington rather than
Tallahassee is picking up the tab, which means that Florida is in effect
receiving a bailout on a scale no European nation could dream of.
"Or consider an older example, the savings and loan crisis of the 1980s, which was largely a Texas affair.
Taxpayers ended up paying a huge sum to clean up the mess — but the
vast majority of those taxpayers were in states other than Texas. Again,
the state received an automatic bailout on a scale inconceivable in
modern Europe.
"So Greece, although not without sin, is mainly in trouble thanks to the
arrogance of European officials, mostly from richer countries, who
convinced themselves that they could make a single currency work without
a single government. And these same officials have made the situation
even worse by insisting, in the teeth of the evidence, that all the
currency’s troubles were caused by irresponsible behavior on the part of
those Southern Europeans, and that everything would work out if only
people were willing to suffer some more"
You can read more here.
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