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- Manlobbi
Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 2
https://www.politico.eu/article/francois-bayrou-fr...Not just a French problem.
Rather, it was the clearest and most pressing evidence yet that an aging and increasingly impotent Europe is heading for bankruptcy unless it embraces major change: digitization, decarbonization and defense all need to be financed, against a backdrop of demographic decline. But it has little or no room for maneuver, due to two more ‘D’s — debt and deficits.France isn’t alone in its predicament.
U.K. Prime Minister Keir Starmer was forced by a backbench revolt of his own MPs to abandon welfare cuts he deemed necessary.<?I>
https://www.dw.com/en/1-trillion-impact-what-easin...
Germany’s Basic Law, the country’s constitution, stipulates that the state may only spend as much money as it takes in.
For expenditures necessary for the country’s defense, the debt brake will be virtually nullified.
https://euroweeklynews.com/2025/06/25/germanys-deb...
Germany is about to flood Europe with debt, and Spain might be the first to feel it. Over the next four years, Berlin plans to issue up to €850 billion in bonds, marking one of the most aggressive borrowing sprees in EU history.
More German debt means more competition in the bond markets, and for countries like Spain and Italy, that could result in higher borrowing costs or new yield pressure, creating a fresh headache for the ECB.
https://www.nytimes.com/2025/09/07/business/france...
On Monday, President Emmanuel Macron’s government is expected to fall for the second time in just nine months after a confidence vote in Parliament.
outsize government spending and falling tax receipts strained finances.
government spending, long the highest in Europe, for a reason: Much of it goes toward financing a generous social welfare system. Last year, an eye-popping 57 percent of the nation’s economic output was channeled into financing hospitals, medicines, education, family reproduction, culture and defense, not to mention generous pension and unemployment benefits.
Part of the overspending comes from the unexpected twin shocks of the Covid pandemic and a European energy crisis unleashed by Russia’s invasion of Ukraine.
Just as problematic are the tax cuts that Mr. Macron has given to businesses and to the rich. Tax receipts have fallen to 51 percent of gross domestic product from 54 percent since Mr. Macron took office in 2017 with promises to boost France’s competitiveness and lure foreign investment. He made generous employment tax breaks permanent and curbed a national wealth tax, earning praise from investors — and the nickname “president of the rich” from his detractors.
The result has been more borrowing and higher debt.
France is a too-big-to-fail economy and is not about to go bankrupt.
That said, “things are bad,” said Bruno Cavalier, chief economist at Oddo bank in Paris.
No. of Recommendations: 1
Everyone, soooner or later, has to pay the Piper. That said, the US seems too be unique, at least currently, that like the alchemists of old, we can create money from a vacuum. This is primarily based on the world agreeing that the US dollar is a backup for their own legal tender. China, with Russia's assistance, is trying to pull the rug out from under that idea. If that rug disappears, the Wizard behind the curtain will be shown to be a wizened vestage of its past and the king will have to admit to his nakedness.
Jeff
No. of Recommendations: 1
The "West" is going to default.
The Japanese numbers must be massive as well.
Long live the West.
We will scrape ourselves off the wasted bottom.
The social safety net MIGHT be stripped away. That includes an end to the FDIC.
No. of Recommendations: 0
Everyone, soooner or later, has to pay the Piper.
None of this would happen. No defaults, none of it, if the US has raised the corporate tax rate. We need to be the global economic engine.
Blame will be laid. You will be manipulated. You will know that. Your SS and Medicare might be stripped. Your FDIC will be stripped.
No. of Recommendations: 3
Everyone, soooner or later, has to pay the Piper. That said, the US seems too be unique, at least currently, that like the alchemists of old, we can create money from a vacuum. This is primarily based on the world agreeing that the US dollar is a backup for their own legal tender. China, with Russia's assistance, is trying to pull the rug out from under that idea. If that rug disappears, the Wizard behind the curtain will be shown to be a wizened vestage of its past and the king will have to admit to his nakedness.
We'll have to pay the piper, but for different reasons I think. We owe most of our debt to ourselves, and it's denominated in a currency we control. Foreign central banks own dollars mostly because it helps them maintain their currency pegs, but that's for their convenience.
The piper's name is inflation. We got a little burst of it during COVID and it never fully went away. If we don't get some adult leadership soon we're going to be sorry.
