France – Social Justice
French Socialists Cannot Just Stop & Reform
France’s economic growth has averaged only 0.8 percent, half of Germany’s 1.6 percent, which ia about half the USA. Yet these people tell the USA its is not fair and the USA should raise taxes to 70% so their policies will not look so bad. The sad part – Obama agrees.
France’s recovery has even fallen behind that of some peripheral countries such as Spain and is really saying something. France is rapidly surpassing Southern Europe and may crash faster than Greece post 2015.75. France will become the next domino to fall. Then we will be confronted with the age-old question is there is a sound when a tree falls if there is nobody there to hear it? Surely Hollande will flee for the French will rise up against their politicians as they usually do. When France falls, they may take the euro down underwater with it.
European countries are struggling with their high taxes, little entrepreneurship, and crazy socialism that is eating their economy from within like a cancer. The best thing they can hope for is a Russian invasion so they can pretend that was the cause of their economic failure.
About 50% of the French youth just want to leave France. This is a very sad statement on the way France has been managed. Socialism is dead. You cannot keep taxing the people who produce in hopes of a handing it out as “social justice”.
Since the beginning of the year, French business and consumer surveys have moved sideways at best. France’s capacity of the economy to rebound is highly questionable. Hollande claims to have heard the French people but reads into it only what he wants to hear – they want more “social justice” his style. Hollande would rob the rich at gun point if he could get away from it. He is perhaps the worst politician in the last 100 years to say the least.
Domestic demand has fallen into a downward spiral of significant deterioration. France’s trade balance has declined from a surplus of 1 percent of gross domestic product in 1999 to a deficit of 3 percent last year with ZERO prospect of reversing. Foreign companies have been chased out and there is just no hope for the economic turnaround in France. When the Economic Confidence Model turns down 2015.75, France will fall like a dead cat without the bounce.
Lagarde – Part II
I should point out that this problem of always trying to reduce things to a single cause and effect is a serious error we make overall within society that has to stop. Legarde is correct the problem is LOW INFLATION but she cannot stimulate by merely increasing the money supply. The Fed has proven that idea does not work. They are trying to stimulate DEMAND and that is constructed fromCONFIDENCE.
Increasing the money supply will NOT be inflationary when you are offsetting that by raising taxes. If the total money supply is $1,000 and I tax you 20% leaving you $800, increasing the money supply at $1,500 and raising taxes to 50% is still deflationary for you end up with less – $750. Absolutely everything is balanced. This is why the cause and effect scenarios fail every time – it is a bell curve in everything.
Legarde advocates increasing the money supply, but she is hunting down everyone she can find to extract more taxes. This is self-defeating and in the end, it is even more deflationary for those with capital will then just hoard it and not risk exposure by open investment.
Keynes is always ridiculed and blamed for the deficit spending. When I am gone they will no doubt do the same to me. Stop glossing over Keynes and painting him with the same brush as politicians for Keynes made it clear you move to deficit spending only in a depression to stimulate DEMAND, and otherwise you lower taxes in just a recession to stimulate DEMAND – something they will never do.
Politicians took only the part of Keynes they wanted to hear. Nobody in their right mind EVER advocated deficit spending every year with no intention of ever paying anything back. This is not Keynesian economics – it is fiscal mismanagement.