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Originally Posted by romancexcore
The US is in far worse shape than the EU as said. And basically paying same taxes in the end as any EU country and getting nothing from the government in return. It may be all about confidence but the confidence that the US is doing things right nearly brought Britain down thanks to Tony Blair and David Cameron going along with our bad policies. The only thing that will stabilize the EU imho is if the UK finally decides to jump in, maybe since they have money. But it's only Germany that seem to be capable of balancing a checkbook.
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The whole situation is dire. Basically because the rich nations of the world have lived beyond the income for a long time. This is a simplified version of why it happened.
If a person spends $50,000 on local good it employs someone locally. If they spend $50,000 on imported third world goods it employs third world people. Yes you get 3 times more for your money. But someone looses a job.
So the alternative is for the rich advanced nations of the world to produce the super hi tech and advanced goods, the third world can't. A balance of trade is achieved and those producing the advanced goods pay taxes to support the people who can't get a job locally.
Works great, UNTIL. The third world starts to produce the advanced goods, the richer are bribed into not paying taxes, to support the local lass well off and borrow to fill the gap, and the rich buy imported third world goods because it's more value.
AND invest in people investing in the loans given to the poorer people.
Suddenly the gravy train hits the wall. The advanced nations aren't selling enough to the third world, they have local people struggling to pay their debts,
to banks they had money invested in. Yes that includes most of us, if we have any money in a bank or the financial system.
As Alex says, it's all a Global Network. You buy a MacDonalds Hamburger instead of a Texas Steak. You just helped employ a farmer in Brazil and a Texan farmer took a pay cut. Simplified, but true.
Solution is we all live a less affluent life style or ask the third world to go back to being the third world.