European Nations Pressure Own Banks for Loans - WSJ.com
The governments and their public sector unions have no ability to cut back their spending. They don't see a disconnect between subsidized or meaningless unproductive jobs and investing for growth. In fact, it's just the opposite. They see no limit to their ability to tax and suck money and capital out of the economy for worker consumption.
This is the same as Obama and many liberal economists.
Governments need to have negative real rates of return to savers. Eventually, accumulated savings and even regular bank current account deposits are exhausted - as is happening now. And, with high taxes and low rates, there is neither the means nor the incentive for people to save.
As Zimbabwe discovered and many European countries are starting to discover, as you keep eating the economy's economic seed corn, eventually you run out of other people's harvests to take.
Governments and unions can't imagine there isn't a free lunch. They fail to even imagine that there is a limit to what they can suck out of the private economy.
It seems as though the bridge has been crossed and, while it would be nice to think these governments and large blocks of their population would see the need to actually invest in their economies, it seems beyond them. To them, investment is just higher taxes and more for government consumption and handouts and less for the private economy to survive on.
Public sector unions and the governments supporting them have far more in common with Robert Mugabe and the Zanu PF party than they could bear to acknowledge. His results will be their results - and those of many of the rest of us as well - unfortunately!
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