Saturday, June 30, 2012

EU Deficits and the USA's Romney: What Does Mitt Romney Know About Europe? or about Public Debt and GDP? Find Out Here.

At ABC News, Shushannah Walshe has an article titled
Romney Says That Without Him, US Will Become ‘Like Europe’.

How much does Romney know about Europe? and what about his views on the European "financial crisis"?

Do the facts support what Romney is preaching in the USA, or is this just another example of domestic election campaigning hype with no support in the actual facts?

Romney is quoted as saying that:
"If I were not to … get elected, we would instead in my view become more like Europe with higher deficits, with a debt that could put us in a Greece or Spain or Italy-like circumstance...."
Oh, really?

We took a look at current IMF and CIA/Eurostat stats on national debt via the Wikipedia. A country's debt is usually calculated as the amount of public debt it has taken as a percentage of the nation's gross domestic product (GDP).

Here is that data to which we have added an EU "label" to the EU Member States, FOUR (4) of which have a higher public debt as a Percentage (%) of GDP than the USA and TWENTY-THREE (23) of which have a lower public debt as a Percentage (%) of GDP when compared to the United States.

So which Europe is Romney talking about?
Not the one that we live in.


List of Public Debt of the
World's Countries (States)
as % of GDP
(adapted from Wikipedia)
Public debt, International Monetary Fund,
April 2012 World Economic Outlook Database.
** marks data from The World Factbook, (est = estimated).
_____
USA debt here does not include state debt issued
by individual US states and intra-government debt
(amounts owed to Medicare & Social Security funds
are  the largest portion of "intra-government" debt)[4]
.
 
We have added the (EU) label to the 27 EU Member States, 4 of which
have greater public debt as a % of GDP than the USA and 23 of which have less.


Country (State)
(IMF) [3]
Date
229.77
2011
 Greece (EU)
160.81
2011
153.41
2011
138.98
2011
136.22
2011
133.82
2011
 Italy (EU)
120.11
2011
117.25
2011
 Portugal (EU)
106.79
2011
 Ireland (EU)
104.95
2011
102.94
2011
100.79
2011
99.19
2011
 Belgium (EU)
98.51
2011
92.40
2011
90.53
2011
 Iraq
86.92
2011
86.61
2011
 France (EU)
86.26
2011
84.95
2011
83.02
2011
            European Union**
(data from World Factbook)
82.50
2011
82.50
2011
82.00
2011
 Germany (EU)
81.51
2011
 Hungary (EU)
80.45
2011
80.35
2011
78.20
(est.)
77.58
2011
76.45
2011
74.55
2011
74.43
2011
74.34
2011
73.14
2011
 Austria (EU)
72.20
2011
72.19
2011
72.03
2011
71.95
2011
 Cyprus (EU)
71.84
2011
71.41
2011
 Malta (EU)
70.94
2011
70.33
2011
69.88
2011
69.78
2011
69.10
2011
68.77
2011
 Spain (EU)
68.47
2011
68.05
2011
 Netherlands (EU)
66.23
2011
66.18
2011
61.75
2011
60.12
2011
59.96
2011
58.92
2011
 Laos
57.36
2011
55.46
2011
 Poland (EU)
55.39
2011
54.39
2011
54.19
2011
 Fiji
53.89
2011
52.56
2011
52.44
2011
50.79
2011
50.63
2011
50.24
2011
49.61
2011
48.94
2011
48.65
2011
48.61
2011
 Finland (EU)
48.56
2011
47.89
2011
 Slovenia (EU)
47.31
2011
 Denmark (EU)
46.43
2011
 Aruba**
46.30
2005
45.83
2011
45.57
2011
45.50
2011
45.23
2011
 Slovakia (EU)
44.63
2011
44.39
2011
44.32
2011
44.20
2011
43.81
2011
43.39
2011
42.52
2011
42.46
2011
42.41
2011
41.69
2011
41.46
2011
40.90
2011
40.80
2011
40.63
2011
40.62
2011
40.47
2011
39.65
2011
39.44
2011
 Lithuania (EU)
38.96
2011
38.77
2011
37.97
2011
37.83
2011
 Latvia (EU)
37.77
2011
 Sweden (EU)
37.44
2011
37.26
2011
37.04
2011
36.70
2011 est
36.50
2011
36.46
2011
35.35
2011
35.27
2011
35.10
2011
 Cuba**
34.90
2011 est
34.67
2011
 Syria**
34.40
2011 est
34.14
2011
34.07
2011
33.88
2011
33.86
2011
33.20
2011
 Romania (EU)
32.96
2011
32.88
2011
32.35
2011
 Chad
32.15
2011
31.99
2011
31.48
2011
31.33
2011
30.90
2011
 Togo
30.84
2011
30.76
2011
 Mali
30.64
2011
29.44
2011
29.26
2011
29.22
2011
28.60
2011
28.12
2011
28.11
2011
26.07
2011
25.84
2011
25.03
2011
24.06
2011
23.43
2011
23.39
2011
22.86
2011
22.64
2011
22.30
2011 est
22.17
2011
21.85
2011
 Peru
21.64
2011
 Luxembourg (EU)
20.85
2011
20.57
2011
20.45
2011
18.94
2011
17.98
2011
17.86
2011
17.53
2011
17.26
2011
 Bulgaria (EU)
17.04
2011
16.89
2011
15.35
2011
13.92
2011
13.66
2011
12.87
2011
 Iran
12.70
2011
10.88
2011
10.63
2011
10.23
2011
9.92
2011
9.91
2011
9.60
2011
9.10
2011
8.35
2011
7.52
2011
7.50
2008 est
7.35
2011
 Estonia (EU)
6.04
2011
5.68
2011
5.60
2004
 Oman
5.06
2011
0.40
2004 est
0.00
2011
0.00
2010

Hence, the government deficits that Romney is talking about in a comparison of the USA and Europe come out on the whole in favor of Europe.
See Deseret News similarly.

What Romney does not appear to realize is that the debt that is hurting some EU countries is of a different kind, and is rooted in evil practices of financial and business institutions, practices that still have to be eradicated and/or corrected, not just in Europe but also in the USA.

See the TOTAL DEBT stats (not just public debt), which point to financial and banking problems other than government deficits and government spending.

As for Europe in general, Mitt Romney can only wish that somewhere down the road America would become more like Europe, for example, in the quality of education or universality of health care.

In fact, the USA is miles behind Europe in many important parameters, including the general quality of the infrastructure as applied to roads, highways, bridges, airports, manufacturing. You name it.

Except for selected areas of high tech, America's leadership has declined steadily over past decades because much of the country has been resting on its laurels and its past greatness, rather than moving forward and doing what needs to be done.

Absolutely surreal in this context, by the way, as reported at Desert News in Mitt Romney economic adviser makes waves, provokes President Obama is the fact that last week, Glenn Hubbard, a former George W. Bush economic advisor (no more of those disastrous economics, please !), dean of the Columbia B-School and Mitt Romney's chief economic adviser (not a good sign for Romney's election chances), wrote an op-ed article for a German business publication urging Europeans "not to learn from America,"  thus drawing fire from U.S. President Obama, not only for mixing in where he has no business being, but also giving the wrong advice to Europe to boot.

Hubbard advocated the idiotic tax cuts for the wealthy that helped to put America in the financial predicament in which it currently finds itself. One always hopes that people who have committed so many harmful errors for society would fade into woodwork, but that is wishful thinking. They keep trying to get it right. Please, go play golf in central Florida.

Our advice to Mitt Romney if he really wanted to get elected President would be to educate himself about the world's finances, get savvy about Europe and find economic advisors who are not living in yesterday or in dogmatic ivory towers far removed from the economic realities.

Modern economies thrive on a credit-based economy. Look at the list above and you will see that most of the poorer countries have low ratios of public debt to the percentage of GDP, but low debt has not helped them in their poverty, nor has it helped their countries to get wealthy. A man of simple wants and desires can get by with less and simple work.

Men and women who are working to pay for overhyped and overpriced smartphones and pc tablets that they may really not be able to afford -- not to mention bubbled residential real estate priced far above true value -- drive the system. If we all settled for what we really need and for which we had cash in the bank, the world economy would crumble to dust.

Much of the debt of the industrialized Western world is nothing more than deferred taxation and calculated inflation that ultimately will find no other solution than printing more money to account for that.

When problems surface, things like money and credit have to be adjusted.
All this talk about a Eurozone crisis is just yellow journalism and stupid economics.

In the EU, a country like Spain has in fact much less public debt than the United States of America in terms of each country's GDP, so that pointing to a reduction of government deficits and spending is simply not the solution to its current economic situation.

Quite the contrary, to get those armies of unemployed off the streets, you spend money to create jobs, by borrowing or printing money as it were, as Paul Krugman and other savvy economists correctly recommend. And you start bearing down hard on banking practices.

There is no need to panic.
Down the road the matters will be solved.
People have to remember that the DEBT is owed to SOMEBODY.
To solve these financial matters, you start pushing THEM.
They know better than anyone else, what the game is, that is being played.


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