Power of Story Send a Tweet        
- Advertisement -

Share on Google Plus Share on Twitter 1 Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 6 (7 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   2 comments
OpEdNews Op Eds

AUSTERITY FAILS IN EUROLAND: TIME FOR SOME "DEFICIT EASING"

By   Follow Me on Twitter     Message Ellen Brown       (Page 2 of 6 pages) Become a premium member to see this article and all articles as one long page.     Permalink

Related Topic(s): ; ; ; ; ; ; ; ; ; , Add Tags  Add to My Group(s)

Must Read 3   News 2   Well Said 1  
View Ratings | Rate It

opednews.com Headlined to H3 12/24/10

Author 7471
Become a Fan
  (202 fans)
- Advertisement -

 

When taxes go down, revenues go down; but budgets don't.  

 

In an article called " Understanding Modern Monetary Systems ," Cullen Roche explains that the Euro system is the modern equivalent of the gold standard.   Both are "revenue constrained."   Countries on these restrictive systems cannot expand their revenues because there is nowhere to get the money.   They cannot get more Euros except by borrowing from each other, and all the member countries are in debt.   In June 2010, 26 of 27 EU countries -" all but Luxembourg -- were on the "debt watch list" for exceeding the 3% cap.   Euros can get shuffled around to keep the game going; but in the end, as Shakespeare said, the eurozone countries are "as two spent swimmers that do cling together," pulling each other down.  

- Advertisement -

 

Douthwaite writes:

 

- Advertisement -

[I]ndividual eurozone countries [cannot] create money out of nothing by quantitative

easing. Only the European Central Bank has that power but it has not yet used it to inject money into the system without withdrawing an equal amount. Consequently, every cent in use in eurozone economies has to have been borrowed by someone somewhere, at home or overseas. As a result, while countries with their own currencies can handle a debt-to-GDP ratio of over 100% because they have the tools to do so (Japan's is approaching 200%), countries using a shared currency must keep well below that figure unless they can agree that their shared central bank should use its interest rate, exchange rate and money creation tools in the way that a single country would.

 

Roche comments:

 

The Euro system, which is also a single currency system (like the gold standard) adds significant confusion to the current environment and is often confused as a flaw in fiat money.  In reality, the Euro proves why single currency systems are inherently flawed.  

- Advertisement -

 

By a "single currency system," Roche means multiple nations sharing a single currency (whether Euros or gold).   Governments need the ability to expand their own money supplies as required to meet the needs of their own economies.   Without that flexibility, they are reduced to trying to balance their budgets through brutal austerity measures.   In a November 19th article in the UK Guardian called "There Is Another Way for Bullied Ireland," Mark Weisbrot observed:

 

Next Page  1  |  2  |  3  |  4  |  5  |  6

 

- Advertisement -

Must Read 3   News 2   Well Said 1  
View Ratings | Rate It

opednews.com

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling WEB OF DEBT. In THE PUBLIC BANK SOLUTION, her latest book, she explores successful public banking models historically and (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon Share Author on Social Media   Go To Commenting

The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

It's the Derivatives, Stupid! Why Fannie, Freddie and AIG Had to Be Bailed Out

Mysterious Prison Buses in the Desert

LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS

Libya: All About Oil, or All About Central Banking?

Borrowing from Peter to Pay Paul: The Wall Street Ponzi Scheme Called Fractional Reserve Banking

"Oops, We Meant $7 TRILLION!" What Hank and Ben Are Up to and How They Plan to Pay for It All