Austerity in US and UK – Ranks of Working Poor Grow in Europe, Despite Social Safety Nets
The IMF president, a French national recently went to Nigeria to tell them what to do with their economic situation as it relates to fuel subsidy. Of course, one could have said, a ‘Daniel Come to Justice’, a machination of Nigeria Finance Minister Ms Okonjo-Iweala, who believes in to to in the virtues of the World Bank and IMF. To her, except these institutions endorse her often whacky economic solution, it has no merit even when such runs counter to reality on the ground. It baffles one that whenever Nigeria faces any struggles, their default wish is to run abroad for some solution. A dangerous dependent approach that makes the most populous black nation in the world, a patient of all kinds of doctors, willing and ready to swallow prescriptions that often leaves her marooned and comatose.
Given the structural challenges in Europe and Madam IMF president is a French nation, I like to know whether she has gone home to tell France and EU member nations what solutions they need to pursue?
It is amazing as UK, US and EU are challenged by their own situations, institutions like the World Bank and IMF, are still seen as relevant in addressing the challenges of developing nations mostly African ones. They case of doctor cure/heal thyself, is now more evident and yet, doctor is getting more sicker. I wonder what ‘patient’ nations in Africa are left to do? I suppose remain hapless and wish the doctor cures thyself well enough to prescribe yet another potion for the patient.
A different world whereby what we have all known to be true, are looking more like voo-doo prescriptions only suited for unsuspecting nations. If we are one global village, how come we are not trading in one currency? Maybe we eliminate all the barriers that choke the world. It is good to see the ‘master’ struggle maybe it is time the ‘servant’ stood up and defy what the master has made them to believe is gospel truth. We never know. Do we?
As the height of the European debt crisis deepens and tensions abound, European Union struggle to what is likely to be a slow and painful recovery. The pain caused by deficit-reducing austerity measures will likely be much more significant than many realize: contraction of government services will hit Europe’s poor hard, worsening an already-desperate situation, says the New York Times.
The poor of EU nations will face significant obstacles on the road to recovery, and the pain will not be isolated to those countries that are most in debt — even France and Germany are discovering striking amount of desperation among their working poor.
- In 2010, 8.2 percent of workers in the 17 EU countries that use the euro were living under the region’s average poverty threshold of 10,240 euros, or about $13,500 annual income.
- The situation is nearly twice as bad in Spain and Greece.
- This is up from only 7.3 percent in 2006, according to Eurostat.
- As a point of comparison, the Labor Department estimated that 7 percent of single adult workers in the United States earned less than the poverty threshold of $10,830 in 2009.
France, which is second only to Germany in its aggregate level of prosperity, has seen a fundamental failure of its own generous social safety nets to protect the poor.
- Slightly lower than the European Union average, France still faces a below-poverty rate of 6.6 percent for single workers.
- Furthermore, half the nation’s workers earn less than $25,000.
- Even though the country’s workers make more than most other workers in the European Union, they also face higher prices that diminish this advantage.
- For example, the lack of affordable housing (home prices have surged 110 percent in the last decade) have left many homeless.
One of the obstacles that the EU’s workers face is that traditional jobs, which include benefits and comprehensive compensation packages, are largely being replaced by inconsistent contract work. In 2011, temporary contracts accounted for 50 percent of all new hires in the European Union, according to Eurostat. The growing needs of the poor place greater pressure on government services just when EU governments are cutting back on those same services. Source: Liz Alderman, New York Times, April 1, 2012.
Funny money and credit instruments, laced with creative financing and fuzzy math models, have left America wounded, putting the entire economy in structural shock; teetering and tethering.
Extension of credits by instruments, a model developed and preached by the West, using future income models to finance current needs, makes one wonder, are we not living way above our means? The ratio of revenue to current budget needs fueled by undue dependency placing weight on future incomes while the economy is in dire strait, is not sustainable.
Two deficit nations US and UK, are getting to understand that beyond the 6 functions of money, and undue carry forwards, it is time for austerity measures. Tightening spending and really cutting one’s coat according to their size.
The ‘crazy-like-fox’ class of operators and manipulators on Wall Street, will always assure the rest of us they have the answers. Well, how is that? We have unduly become a labaoratory controlled by weird and wired minds, who prescribe ’whatever’ financial vehicle when simple approach very well could have delivered the needed answers. It is amazing!
I get hearty laugh when I hear the word ‘austerity‘ used in US and UK, because those of us coming from foreign countries, very well understood what that means given the often failed financial and economic prescriptions hoisted on unsuspecting nations by World Bank and IMF; the principal command and control arms of US and its European allies on developing nations.
It’s now time for the doctor to test and use their own prescription. I guess what ‘Thou Has recommended, Thou often shy from using’, more like, do as I say but never as I do’. Any country serious about developing, should see what US and UK have done, and never repeat those especially on spending versus revenue. We are choking at our prescriptions and no solutions appear in the horizon. The world is no longer naive.
Now, the doctor is facing their own prescription but they want Kool-Aid. One in denial always end up confused more.
We must embrace ‘Back to the Basics’ with applied common sense economics, but common sense is a luxury in our good ole US America. I guess, we are waiting for ‘What the Doctor Ordered’, but what doctor? I pass.
What goes up comes down, and the Sun never rises from the West. Does it?
E E OKPA, II
The OKPA Co
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