All Posts Tagged With: "Spain"

“Austerity” usually means spending cuts and tax hikes. But, it does not take long before politicians, bureaucrats, public employees and corporate cronies all agree that they don’t actually want to cut spending. Usually, they take some unpleasant swipes at welfare programs and services – in other words, the only programs that actually do some good, and which are especially important in a recession.

The question begging itself here, of course, is how Europe intends to come up with roughly a trillion in bailout money. Sell Portugal to China? Cut Greece up into bait and catch whatever fish are left in the Mediterranean Sea? Frankly, I’m stumped. Talk about robbing Peter to pay Paul…

Let’s pause for a moment to reconsider what may have happened last week with Wall Street’s “trading glitch.” Is it possible that traders saw the cops beating protestors in the Streets and surmised this: No matter what deal European leaders come up with to bailout Greece, that deal isn’t going to fly on the streets of Athens.

Let’s leave off with the underlying economic debate about the resource rent tax and talk about the market. It’s getting shellacked. Our colleagues Kris Sayce and Alex Cowie are finding many of the positions they’ve recommend in their publications since the March lows are declining and hitting suggested trailing stop levels.

The communists learned their lessons. They proved that government spending does not make people rich. But now…what’s this…? The US and other countries are greatly increasing the percentage of GDP spent by the government.

Spain’s debt has grown from 36% to 66% of GDP in the last two years. This is thanks to a budget deficit of 11.2 per cent this year, and will still be around 10.2 per cent for next year.

Not only that, but the unemployment level in Spain is heading for twenty per cent in 2010. Already a staggering 43 per cent of people under the age of twenty five are out of work.