Ze Germans PtII

[doodab]

I love living here, but sometimes it's disturbingly clear that all the rocket scientists left at the end of the war.

[Churchill]

I love living here, but sometimes it's disturbingly clear that all the rocket scientists left at the end of the war.

Have a look in Einstein's birthplace, there's a few down that neck of the woods. "Daimler Chrysler Aerospace"

[Spacecadet]

I love living here, but sometimes it's disturbingly clear that all the rocket scientists left at the end of the war.

it's just launching a lump of metal in to the sky, hardly brain surgery!

[bingobob]

The worst thing the gemans ever did was to merge with East Germany. Bet they wish they'd given that some more thought now.

[chef]

The worst thing the gemans ever did was to merge with East Germany. Bet they wish they'd given that some more thought now.

my taxes are still paying for that at the rate of 5.5% I think, a "solidarity tax" The state funded parks however are very nice apparently in east germany, far nicer than those in the west

[Churchill]

my taxes are still paying for that at the rate of 5.5% I think, a "solidarity tax"

That's strange, when I lived and worked in Germany I was exempt the re-unification tax...

[chef]

That's strange, when I lived and worked in Germany I was exempt the re-unification tax...

<Chef makes a mental note to call his accountant before actually paying his tax bill>

[sunnysan]

The Neoconimist strikes again

Hot on the heels of an article saying that the German economy looks good but is actually bad, here is an article saying the UK economy looks bad but is actually good?

Doublethink at work here methinks.




http://www.economist.com/opinion/dis...=hptextfeature

Out of the ruins

Growth will be sluggish. Yet, as a crucial election looms, Britain still has a lot going for it

Mar 25th 2010 | From The Economist print edition

IT WAS only three years ago, but it feels as though aeons have passed. Back then, the British economy was the strongest in Europe. Open and competitive markets made Britain the poster child for globalisation in the rich world. Central-bank independence and (supposedly) prudent budgetary management helped produce a vintage period of steady and rapid expansion. British workers were admirably reluctant to strike; British chancellors tiresomely wont to lecture finance ministers in mainland Europe about their superior policies. And British Airways was the world’s favourite airline.
Now, with Britain hit harder than either America or the euro area, the nation’s self-confidence is as shaky as its credit rating. Instead of preaching to the neighbours, it is the target of European gibes about the consequences of (allegedly) untrammelled liberalisation. The dire state of the economy (see article) is the biggest issue on the minds of disgruntled voters in the run-up to the election expected to be held on May 6th. And many BA planes are likely to be grounded again this weekend by another round of strikes.
Yet Britain is not doomed to slink along the bottom of the European league. Its vulnerability to the crisis sprang from its overextended banks, its overindebted private sector and its overweight public sector. The first two of those imbalances are starting to right themselves. The third, for which Gordon Brown is largely responsible, will probably fall to his successor to correct, since the electorate seems minded to turf him out. So long as the next government tackles the problem courageously, Britain’s prospects do not look too bad; for the openness and flexibility first fostered by Margaret Thatcher should allow the economy to regain some of its former strength. Growth may be more sluggish than before the crisis—but Britain should still be friskier than its less open neighbours.
First the bad news…

The figures right now look dire. Between early 2008 and the autumn of 2009, GDP shrank by 6.2%. The recession lasted six quarters, longer than in any other G7 economy. Thanks to Chancellor Brown’s profligacy and overoptimism in the good years, government borrowing as a share of GDP is forecast by the IMF to be the highest in the entire G20 in 2010. According to the OECD, government spending as a share of GDP rose from 44% in 2006 to 52% in 2009—compared with 48% in supposedly statist Germany. Sterling has lost around a quarter of its trade-weighted value since the middle of 2007. A wave of industrial unrest has not just grounded aeroplanes but has also closed job centres and threatens to halt trains. Once again, the phrase “sick man of Europe” is trotted out.
But the prevailing mood has swung way too far towards pessimism. The budget deficit as a share of GDP may be on a par with Greece’s, but Britain’s public debt started much lower, at less than 50% of national output in 2007, compared with over 100% in Greece. Britain has always paid its debts; investors don’t yet doubt the ability of a British government to get a fiscal grip after the election; and Britons tend to pay their taxes.
Despite the reverses of the past couple of years, the British economy retains important strengths, not least its openness to trade, capital flows and, more recently, migration. There is much talk of rebalancing the economy, of finding new sources of growth now that financial services and the housing market have taken a hit. Yet Britain’s economy is already surprisingly varied. It is still the world’s sixth-biggest manufacturer. The outlook for financial services may have darkened but London’s streets are no less thronged with lawyers, management consultants, accountants and ubiquitous marketing types. Cultural output is strong, with films and video games and edgy fashion pouring forth. Foreigners still want to buy British businesses—and Britain usually does well by it (see article).
…and then the slightly better

Delivering his pre-election budget on March 24th (see article), the chancellor, Alistair Darling, said he expected growth to accelerate from 1.25% this year to 3.25% next year, then to 3.5% over subsequent years. That smacks of wishful thinking. Britain’s banks are reluctant to lend. Consumers owe too much and will have to pay more in taxes whoever wins power in May. The economy has long-standing weaknesses, including congested transport, unreformed schools and patchy skills.
Nevertheless, the prospects for growth look reasonable. Britain’s record on improving productivity before the crunch was better than its neighbours’. Flexible labour markets have helped restrain wages, so unemployment has not risen nearly as much during the recession as was once feared. Although unions can still damage companies and disrupt public services, they are comparatively small and weak. And, whereas the weaker members of the euro zone are shackled to the stronger countries, Britain has been able to regain competitiveness by allowing its currency to fall. Growth will probably settle down at somewhere between 2% and 2.5%—well below its rate during the long boom, but not that bad historically.
That, however, depends on the next government doing the right things. In his response to Mr Darling, David Cameron, the leader of the opposition Conservative Party, pointed out that the government had turned the £6 billion deficit it inherited in 1997 into one of £167 billion ($249 billion). The most urgent task for the next government is to start to shrink that figure. Reducing spending too deeply and too swiftly, or raising taxes too fast, would risk tipping an already fragile economy into a deeper hole; but deeper cuts will be needed than the politicians are currently admitting to.
Reducing the deficit is only one reason to cut government spending. The other, bigger, reason is that the state needs to shrink. The numbers of government employees are swelling; the regulations they design go on tying up business; the tax burden is getting heavier. Many of these dismal trends are Mr Brown’s fault. What the country desperately needs in the election campaign is a sensible debate about how to reverse them. But nobody—least of all Britons—should underestimate the advantages of an open economy in an intertwined world.

[shaunbhoy]

That's strange, when I lived and worked in Germany I was exempt the re-unification tax...

When I lived and worked in Germany it was with the express intention of preventing re-unification!!!

[TimberWolf]

Oh great, we need more immigration and outsourcing.