As Spain’s finance minister, De Gunidos, comments are crossing the wires; “Budget cuts and economic growth are incompatible”, maybe it is time to recall what austerity really means. More austerity, more misery. From Azizonomics:
I noted yesterday that anything the government gives you, the government can take away, and that dependency on government services — which might be withdrawn — leaves citizens weak and unfree.
One cause for the withdrawal of government that I neglected to mention (intentionally, as I hoped someone would pick it up in comments) was the matter of austerity. While the example I was bouncing my ideas off — of denying treatment to smokers or the obese — remains theoretical, the withdrawal of government services and spending as a result of austerity is very much a reality, especially in Europe.
Below are some projections of some of the trends that will dominate the World going forward. If this will be true or not, remains to be seen, but these are some trends that will shape the world. The world in 2030. The full report by ESPAS click here. From Finance Addict.
1. India will have more people than China.
Grant Williams on firewalls, central banks and much more in the latest things that makes you go hmmm
“But what about the Maginot Line?” I hear you cry… Well, the German army found a slightly simpler solution to that particular ‘impregnable defense’; they attacked France through Luxem- bourg and then Belgium, completely bypassing the main part of the Maginot Line – thus render- ing it virtually useless.
That’s the problem with firewalls, you see; they ALWAYS seem as though they provide a solution to the problem they are built to mitigate but they rarely do.
Since 2008, the Central Banks of the world along with their respective govern- ments have been moving heaven and earth to put in place the kind of firewalls that will protect the world from a ‘collapse of the system’ – even though we literally have no idea just what that ‘collapse’ would look like or entail.
Quantitative Easing, TARP, HAMP, LTRO I & II, Ba- sel III and all sorts of other schemes have been dreamt up by those in power in order to protect the world from something that is, essentially, unavoidable; the after-effects of two decades spent bingeing on debt and free money. And what has been the single most often-used solu- tion employed in the treatment of this particular problem? Yes, more free money.
Let’s be clear, printing money out of thin air CANNOT fix this. If it COULD, then why not just give everybody in the world $10,000,000 in cold, hard cash and we can all go about our business? The question is redundant. The answer obvious. But that hasn’t stopped the Keynesian geniuses at the wheel from persisting down this particular road for several years now in the misguided be- lief that just a LITTLE more free cash will finally get things flowing again.
Spanish economy slipped back into recession in the first quarter of 2012, making the government’s job of meeting the deficit targets even tougher amid the public anger against the deepening austerity and record-high unemployment.
Gross domestic product contracted 0.3 percent quarter-on-quarter in the first quarter, the statistical office INE said Monday. This followed a 0.3 percent fall in the fourth quarter of 2011, which was the first decline in activity since the final three months of 2009.
The country is now in a technical recession, which is commonly defined as two consecutive quarters of economic contraction.
However, the latest result was better than the 0.4 percent decline estimated by the Bank of Spain last week. Economists had expected a 0.5 percent drop.
Annually, the GDP fell 0.4 percent following a 0.3 percent expansion in the previous quarter. Economists had forecast a 0.6 percent fall. Bank of Spain had estimated a 0.5 percent annual fall in GDP. ( full reading here.)
Meanwhile, Mr Rajoy warns of new reforms to be announced every Friday, as the economy is in such a bad shape. Truly extreme measures are needed if the Spanish economy is to be saved. From El Pais.
The NYT must read article on Apple’s creative tax planning receiving some attention this weekend.
Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains.
California’s corporate tax rate is 8.84 percent. Nevada’s? Zero.
Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.
Neel Kashkari on the very few housing winners.
Since the housing downturn that began in 2007, policymakers in both parties have implemented numerous programs to modify loans and help homeowners avoid foreclosures. Sadly, none of these programs has lived up to its goals. With each missed expectation, advocates identified the next impediment and offered the next silver bullet. But there is a reason all these programs have fallen short — and why in-kind successors will, too.
When I worked in the Treasury Department, my colleagues and I evaluated hundreds of mortgage modification proposals and started several. At the same time, Congress and several states put in place their own plans. Hope Now. The rate-freeze plan. Hope for Homeowners. The basic thesis behind such programs is that foreclosures are very costly to everyone involved: Tens of thousands of dollars are needlessly poured down the drain when a house goes through foreclosure. A bank’s recovery on its loan is severely impaired. Homeowners are out on the street. Neighborhoods are blighted. If, however, a compromise is reached, everyone wins: Banks recover more, families stay in their homes and neighborhoods are strengthened. With so many different modification programs, why haven’t more struggling homeowners been helped?
Full article here.