Thursday, October 11, 2012
Germany Cuts Growth Estimates in Half
In what could be the precursor to a major blow to the eurozone, German economists lowered their growth estimates in half, cutting them from the previous 2 percent down to 1 percent.
While the German public has little in the way of support for the poorly run countries in the eurozone, Chancellor Angela Merkel continues to go against that sentiment, saying the country needs "to do things to stimulate the European economy."
Merkel continues to look to the failed idea of consumers bailing out Europe. She said to reporters, "If we manage to keep our domestic consumption up, then that has of course the advantage that we can increase imports from other European Union countries."
That's all a smokescreen. Who doesn't know that doing things to help the European economy means throwing money at the irresponsible nations in the eurozone, who are Keynesian and socialist to the core, and are doing nothing to get out of the way so free markets and real capitalism will emerge. That's the only practical answer, and until they takes those steps and put in place even more austerity measures, things will continue to spiral downwards.
Projections for growth in the eurozone for 2013 is an anemic 0.2 percent, according to the International Monetary Fund. In the second quarter growth in the eurozone dropped 0.2 percent, while Germany only grew 0.3 percent for the quarter.
The German economists concluded that German growth faces major challenges if other countries in the eurozone don't take steps to cut back on spending and lower their debt. A recession is likely if things continue on as they are.
The economic report, which comes out twice a year, also lowered its estimates for German growth for 2012, dropping it from 0.9 percent to 0.8 percent.
It's interesting to see these many beggar nations point to austerity making things worse. The fact is the lack of austerity is what brought this outrageous sovereign debt crisis about, and while it will cause some pain, it's overspending and offering more than can be delivered by governments that has the eurozone where it is today.
Many leaders and economists continue to act and believe that government spending is what brings about economic success, as evidenced by the continual calls to spend even more while doing very little to make actual cuts in the debt.
Business is what brings economic strength and success, not governments. And until these corrupt politicians in Europe, and many other areas of the world, stop believing government is the answer to building wealth, things will remain the same, or get much worse.
As for German Chancellor Angela Merkel, she continues to talk tough in the beginning of the next round of throwing money at the problem, but after this false posturing, caves in and backs up continual spending.
Nothing will change that until German voters see what's really happening and how it negatively affects them, and end up voting her and her party out.
Either that or, Merkel finally gets some inner strength and stands against the rest of the eurozone in order to protect her country or people.
But since she is a proponent of a new world order, unless she has an epiphany, nothing will change, and she'll continue to cave in time after time to the foolish practice of providing money to governments who really have no intentions of cutting back on spending, but who hope that the global economy will improve while they keep kicking the can down the road.
In that case the major countries in the region will continue to prop up the failed practices and economic policies of these countries, but it won't be as noticeable to voters because things will appear to have been taken care of.
But Germany doesn't appear strong enough to carry the weight of increasingly socialist Europe, which has an entitlement culture so inbred in them that even when this could bring down the entire eurozone economically, they continue to hang on to these failed theories and practices.
In other words, socialism and entitlements have taken on a religious connotation, and people who believe in the state as almighty, will continue to follow that until their faith in government fails them, and they'll have to start to become responsible for their own lives. It'll take time for that to happen. But happen it will.