The Unfortunate European and American Recession

The economic state in Europe is in ruins right now with the fall of the euro and failed anti-capitalistic policies.Moreover, America’s dismal financial situation isn’t helping out Europe’s woes and vice versa.  Capitalism is a very delicate flower where it has to be nourished and properly looked after.  If Europe holds on tightly to the principles of capitalism, then their economic situation might improve.  The upcoming United State’s presidential election is so important because the major thing that is on voter’s mind is for their country to achieveeconomic growth; both America and Europe need it.Capitalism involves limited regulation, free market enterprise and concern for the growth of the middle class.  More importantly it is the separation of economy and state.  Many people across the world feel that government should not interfere with people’s financial endeavors.  Alan Greenspan describes capitalism in the following quote,

“Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear.”

It is unfortunate for the leaders of suffering European countries that are in heavy amounts of debt are not listening to their citizens.  Democracy indicates that a  government is supposed to serve the public.  These politicians are dodging the inevitable restructuring, which is becoming paramount in countries like Greece:

A more fundamental rethink is needed. It may be better to bite the bullet of default, starting with Greece. A recent report from Bruegel, a think-tank, concluded that Greece had become insolvent, called the current wait-and-see approach “a dubious strategy” and said that restructuring was necessary. The main objection to such a policy is the risk of destabilisingthe European banking system. But that risk could be contained… if banks’ weaknesses were addressed following new stress tests…The idea of resolving the debt crisis through restructuring may still be anathema in official European circles, but it won’t go away.

Leave a Reply

 

Switch to our mobile site