And their combined population exceeds the U.S. by 18 million people. Via Weekly Standard: As the chart shows, America’s debt is currently $15.1 trillion, while the Eurozone (which includes France, Germany, Greece, Italy, Spain, the U.K., and others) has a combined debt of $12.7 trillion. (All dollar amounts are in U.S. dollars, and the data
See the article here:
America’s Debt Is Greater Than Entire Eurozone And U.K. Debt Combined…
Promoted from the diaries Decades ago, when British Prime Minister Harold Macmillen was asked by a journalist what would decide an upcoming election, he replied: “Events, my dear boy, events.” As we take stock of where we are – and what’s likely to happen between now and the first Tuesday of November – it’s clear that one of the greatest “events” facing us today – which also has the potential to escalate much further – is the European debt crisis. The mainstream media has given a lot of coverage to the debt crisis and the bailout bonanza it’s unleashed – first the Greek bailout, then the Irish and Portuguese bailouts, then Greece again. But the MSM conveniently forgets to mention two important things: the role of the International Monetary Fund in funding these bailouts (one-third of the cost, actually), and the fact that America is the largest contributor to the IMF. This month, the European Union unveiled its umpteenth bailout of Greece, bringing the total cost of that bailout alone to $500 billion (or more than the entire Greek economy). That doesn’t include the cost of the Ireland and Portugal bailouts (combined total: $259 billion), and the growing likelihood that Spain and Italy will need bailouts too. While the MSM looks the other way, a critical mass of bloggers and activists are starting to ask the question, “At a time when America is borrowing over $1 trillion every single year, why are we borrowing more money – much of it from China – to bail out Europe?” Even the White House understands the political potency of this issue. At last week’s White House press briefing , Deputy Press Secretary Josh Earnest was asked whether the Administration would come to Congress to request more funding for the IMF. Earnest said “further contributions” to the IMF are “off the table.” But that’s misleading. Every month, the IMF is using “further contributions” from you – the taxpayer – through America’s $68 billion IMF quota plus a separate $100 billion line of credit called the “New Arrangements to Borrow” (NAB) – for the European bailouts. Those bailouts could be stopped by the Administration, but they refuse to take action. Why? Because they support the bailouts (albeit quietly). And the media won’t call them out on it. And so, it’s time for Congress to take action to protect your tax money. I have introduced legislation, HR 2313, that would repeal the Administration’s $100 billion line of credit to the IMF. As of today, only $7 billion of that $100 billion has been committed, so we have up to $93 billion to protect and designate for deficit reduction. Every day, that money is in jeopardy of being committed by the IMF, so we don’t have time to waste. And should Spain or Italy need a bailout, there is no question that most of the $100 billion will disappear, and quickly. My bill has 91 cosponsors. Sen. Jim DeMint has introduced a similar bill in the Senate – S. 1276 – which has 25 cosponsors, more than half the Republican Conference. At the very least, we should have a public debate about whether or not America should be involved in these European bailouts. And the Administration should be honest about its support for them. If the mainstream media won’t hold the Administration accountable, Congress and the blogosphere must do it for them. I, for one, will continue to oppose American involvement in a European TARP. We cannot afford to take the “too big to fail” philosophy to a global level. The only thing “too big to fail” is America itself. Rep. Cathy McMorris Rodgers (R-WA) is Vice Chair of the House Republican Conference. A compilation of her work against the IMF bailouts can be found here .
Originally posted here:
Why is Obama Bailing Out Greece? And Why is the MSM Covering Up For Him?
Here’s a question: If tax dollars were being used to make prices cheaper for companies overseas while simultaneously forbidding American companies from enjoying the same luxury…would that be fair? I would submit that it’s not, and President Obama claimed to feel the same way at his State of the Union earlier this year : … It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized. Unfortunately, that’s exactly what is happening. Let me introduce you to something call the Export-Import Bank . The Export-Import Bank of the United States (Ex-Im) exists for the purpose of backing U.S. goods sold to foreign customers that are unwilling to take a credit risk. Basically the agency, which was created in 1934 by those executive orders we all love so much, makes sure people in other countries buy our stuff and prevents things like “credit” from getting in the way. One of the things that the Ex-Im currently does is provide foreign airlines loans at rates as low as 4% (vs. domestic carriers which pay much higher market rates). But remember, as great as these loan guarantees are, they are only available to foreign airlines, not U.S. airlines. This is because of something called the “Home Market Rule.” The Home Market Rule “prohibits airlines based in the domestic market of Boeing of the US or Europe’s Airbus (France, Germany, the UK and Spain) from getting ECA support. Instead these airlines must rely on commercial financing, which some complain is more expensive.” The result of observing this rule is that U.S. airlines do not have access to the below-market rate financing opportunities that their own government agency is handing out to foreign manufacturers. So what does all this mean? It means that whoever is selling an in-demand product to overseas customers might be doing pretty well for themselves . Of the $9.3 billion in loan guarantees Ex-Im issued in fiscal 2009, $8.4 billion subsidized Boeing sales. In Ex-Im loan guarantees, private banks or foreign governments finance the purchase (by a foreign company or government) of U.S. goods, and Ex-Im underwrites the loan, putting the U.S. taxpayer on the hook if the foreign customer defaults. This allows Boeing to offer lower prices, and it guarantees that Boeing and the lender get paid. This is called public risk for private profit. You may recognize this format. It’s basically the international version of Freddie/Fannie home guarantees except these houses fly. The Examiner piece goes on to point out precisely what might go wrong: For instance, Boeing landed a $2 billion-plus deal with the state-owned parent company of Air India. Bailed-out investment bank JP Morgan is lending Air India the cash to buy 68 Boeing jets. That’s when the taxpayer enters the picture. Ex-Im agreed at its June 11 board meeting last year to guarantee $2 billion of the deal. So, if Air India runs out of cash in the future, Ex-Im pays JP Morgan and Boeing — with taxpayer money. But would that ever really happen? Having the government guarantee sub-prime loans to enrich a select few American companies and sell product to customers that could not otherwise afford it has never come back to bite us, right ? Pew confirmed the data a year earlier and revealed that this same level of corporate welfare was being kicked out in 2007 & 2008 as well. The Export-Import Bank (Ex-Im)—the official government agency subsidizing U.S. exports of goods and services—provided nearly two-thirds of its long-term loan guarantees over the last two years to a single corporate entity, according to analysis released today by Pew’s Subsidyscope project. In FY2007 and FY2008 combined, Ex-Im issued $15.3 billion in long-term loan guarantees. Of that total, almost $10 billion, or an average of 65 percent, went toward the purchase of commercial aircraft made by the Boeing Company , the world’s largest manufacturer of commercial jetliners and military aircraft combined. (emphasis mine) With so many guarantees going to one American company, and with the other companies unable to access any of the low interest financing afforded to foreign customers, U.S. airlines have had to cut jobs in the thousands at a loss of hundreds of millions of dollars in employee income. For instance, in 2006 , Delta began nonstop flights from New York to Mumbai. But by 2009, the Ex-Im gave foreign competitor Air India over $3 billion in loan guarantees, which in turn were used to finance 68 Boeing 777-LR aircrafts at below market prices. The result was that “after confirming in June that it would move to its nonstop flight from Atlanta to Mumbai, India, back to New York, Delta Air Lines Inc. has now suspended the service altogether, leaving the airline with no nonstop flights between the United States and India.” Additionally, just last month American Airlines cancelled its nonstop flights to India and announced that it will lay off 150 airport employees. Now comes word that the Congress is considering the reauthorization of the Ex-Im and may increase the cap on its loans and guarantees by as much as $160 billion. Something I’m sure we all agree is more spending for which we simply can’t afford to be on the hook. Senator Tom Coburn, in a letter written to Senators Reid and McConnell, had this to say: We understand you are considering taking up the Export-Import Bank Reauthorization Act of 2011(S. 1547) during this Senate work period. While we are aware of the Export-Import (Ex-Im) Bank’s role in facilitating the export of U.S.-produced goods and services, Ex-Im is congressionally mandated to balance the benefits it provides to U.S. manufacturers against the harm it does other U.S. employers – a mandate the bank fails to follow. We realize that Ex-Im’s authorization expires at the end of May and that the bank has publicly stated its concern that it will reach its authorized financing ceiling of $100 billion in the next few months. However, these impending hurdles cannot and should not prevent Congress from addressing larger, more systemic failures of the bank. This is a complicated issue and one that I only know about because of the hard work of people like Senator Coburn. But the fact of the matter is that the Ex-Im is defying its mandate and providing a courtesy to foreign competitors that is detrimental to American interests, all to the benefit of only one American company. We cannot continue to risk American tax dollars to finance our own competition. The Ex-Im authorization must be reviewed, and the mandates that are not being followed must be enforced. Cross-Posted at Ben Howe Blog Follow @ben_howe
Continued here:
Why is the United States Government Financing Our Foreign Competition?
Over at NRO,
If there is one word that captures many Europeans’ response to the continent’s financial crisis, it is denial. Witness the description by the editors of France’s newspaper-of-record, Le Monde , of France’s S&P credit-downgrade on January 13 as ” un non-événement financier .” The fact that this “non-event” will increase France’s borrowing-costs (not to mention those of the EU’s own bailout fund) at a time when France’s government is already struggling to contain spending apparently escaped Le Monde’ s attention. This habit of ignoring reality, however, goes beyond blinkered reactions to one-off occurrences. It’s also reflected in many Europeans’ perceptible inability to acknowledge some of the deeper dynamics driving the crisis. Here most of us think of unaffordable welfare states and other sinking ships to which many Europeans cling like limpets. But there is one element at work in Europe’s crisis that even fewer Europeans will openly acknowledge: the economic forces set in motion by Europe’s slow-motion population implosion. The demographic facts concerning European population-trends are clear. The replacement level for a population (what keeps it stable) is a fertility-rate of 2.1 children per woman. According to the UN, the average fertility-rate of European women was 1.53 between 2005 and 2010. The figures for Greece (1.46), Spain (1.41), Portugal (1.36), Italy (1.38), and Germany (1.36) were especially depressing. France (1.97), Britain (1.83), and Sweden (1.9) did marginally better. Ireland alone managed to attain the 2.1 threshold. All these figures represented decline from 1955-1960 rates : Greece (2.27), Spain (2.7), Portugal (3.29), Italy (2.29), Germany (2.3), France (2.7), Britain (2.49), Sweden (2.23), and Ireland (3.58). These developments translate into more old people, fewer young people, and, eventually, shrinking populations. But it also shifts what’s called “the dependency ratio”: the ratio of retirees per member of the labor force. On some estimates , Italy, Spain and Germany will have very high dependency ratios by 2050: every two workers will be supporting one retiree. Those working will also have to pay either greater contributions or higher taxes to fund existing pension systems. The present situation is further worsened by another ominous trend: the growing exodus of tens of thousands of young EU citizens searching for work to Latin America, North America, and Asia. Similarly, hundreds of thousands of young immigrants to the EU from developing nations are heading home. The odds that many will return to Europe in the near-future are dim. These facts have made some Europeans willing to ponder the necessity of labor-market and welfare reform, not least because those countries that have weathered the crisis better than others (e.g., Germany and Sweden) actually implemented such changes in the 2000s. Getting Europeans to talk publicly about the continent’s population-trends and their economic consequences, however, is a different matter. Why? One reason is that many Europeans have long been in thrall to the over-population gospel. Long before Paul Erhlich’s The Population Bomb (1968) — whose doomsday future-scenarios of a world devastated by famines, mass disease, and social unrest unleashed by overpopulation never materialized — numerous European economists had bought into this thesis. In 1798, the Anglican vicar and one of the first modern economists, Thomas Malthus, published his Essay on the Principle of Population . This argued that growing populations would produce an increasing labor-supply. The result, Malthus insisted, would be lower wages and therefore mass poverty. “The power of population,” he claimed, “is so superior to the power of the Earth to produce subsistence for man, that premature death must in some shape or other visit the human race.” Another English philosopher-economist, John Stuart Mill, was so convinced by Malthusian arguments that he actually spent time in London parks distributing birth-control pamphlets to bemused onlookers. By the 20th century, plenty of other prominent European economists were getting into the act. Knut Wicksell, a Swede whose thought was immensely influential upon often otherwise-opposed economic schools of thought, loudly proclaimed depopulation’s economic benefits. Likewise the German economist Wilhelm Röpke conjured up visions of a world overrun by teeming masses unless birth rates radically declined. (Oddly enough, John Maynard Keynes was one of the few economists to abandon his earlier Malthusian views and argue — to the British Eugenics Society no less! — that population-growth helped create demand and thereby fuel prosperity.) But it’s not just economists who have propagated anti-natalist positions. For decades, European governments have been pushing population-control programs upon developing nations (including trying to force them to legalize abortion) by making foreign-aid dependent upon adopting such policies. The phrase “neo-colonialism” comes to mind. Then there’s the Swiss theologian Hans Küng who — as if locked in a 1970s time warp — avowed in 2010 that the Catholic Church’s teaching on contraception was facilitating “overpopulation.” And, as always, we have environmentalists adamantly maintaining that population growth is putting the planet’s future at risk. The existential scale of Europe’s present economic crisis may, however, at last be providing space for those Europeans unconvinced by neo-Malthusian orthodoxies to crack the consensus on these matters. One such figure is Ettore Gotti Tedeschi, the Italian economist who heads the Istituto per le Opere di Religione (otherwise known as “the Vatican Bank”). In article after article, Tedeschi has observed that graying and dwindling European populations imply not only reduced demand but also higher tax burdens on those who are young and working. The resulting shrinkage of disposable income discourages those of child-bearing years from having more children. This in turn gradually narrows the dependency ratio, thereby creating even greater strains on Europe’s already-tottering welfare states and over-loaded tax base. So while deficit-reduction and welfare reform matters, perhaps the biggest long-term test for Europe is to break the vicious cycle fueled by population aging and decline that could worsen the already-bleak fiscal future for young Europeans. But this will require many Europeans to do something they find even more difficult than scaling back welfare programs. And that is to break through the politically correct taboos that presently strangle objective discussion of Europe’s population challenges, and concede their miscalculation of the economics of population. I’m not holding my breath.
Originally posted here:
Europe in Demographic Denial
