US and Europe faced an enormous economic meltdown. However, both of them reacted in exactly the opposite ways. US printed dollars like there was no tomorrow and liberally bailed out the banks, insurance companies, automobile manufacturers etc.. apart from investing in infrastructure, funding new technology companies and keeping the borrowing rate at the lowest. Europe did not print euros like mad. This was a decision by the European union. I am sure Greece, spain, portugal, italy etc would have loved to be liberally bailed out by the euro. Germany is more afraid of inflation than a war. It will never allow printing of euros at will. As a result, the individual countries had to let their institutions fail, cut back social welfare spending and watch their economy on self destruct mode helplessly. Now that we have seen the approaches of US and EU, lets see the outcome. Unemployment in the US is at 7%, DJIA has reached 15000, economy is all set to grow, manufacturing is inching back to US and exports are growing. Unemployment is hovering at 20 to 25% in quite a few countries in Europe, economy is faltering, countries are unable to service debts, political backlash and civil uprisings all over. Both US and Europe had a problem. Both of them applied a different solution. One paid off while the other back fired. Is what europe did, correct? EU was supposed to be a place of equals. It has now changed into a two tier structure. First class citizens and ordinary citizens. Those who have stable economies get to call the shots, while the troubled economies get to bear the brunt. I think, it was a historical movement for europe to convert to a single country. It would be become a super power and a super currency.
Posted on: Sun, 07 Jul 2013 03:36:24 +0000