Europe's Rescue Plan Falters - WSJ.com
Let's see? The governments keep up social spending and support for inefficient state enterprises. They raise taxes (VAT and corporate). Thus, individuals have less disposal income, companies have less income.
The banks are forced to buy government bonds, not loan money to businesses. Rates are kept low so, even if people were inclined and able to save money, they are discouraged from doing so.
So, the prices of goods and services are artificially raised by the VAT charges tacked on (think economic utility of consumption).
Where is the growth supposed to come from? Where are the funds for investment - let alone the desire to invest - supposed to come from (the banks are being forced to buy government bonds).
If government picks winners or losers in the economy, it's going to get it wrong!
Would it be worth considering long-term plans to reduce the share of the economy going to government. Would lower taxes on those who can grow and invest in the economy not be better than higher and higher taxes on them?
Why not give young people a chance? They need lower taxes and support for entrepreneurship, new ideas, saving and investment.
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