I was watching DW TV (Deutsche Welle = German Waves) yesterday and they were going on about how there is no real poverty, but some families struggle. They looked poor enough, but had welfare enough to live in safe housing and eat every day.
Is there really no homeless problem? What about all those people that George Bush says prefer to live on the street? Do they have to move to the US to live under bridges?
No, poverty isn’t abolished. There are homeless people but (as I opined in another thread) you need at least one serious problem other than having no income to be homeless.
As every legal resident has a right to a certain welfare level (plus the rent for reasonably modest accommodation, medical treatment etc) it’s not a question of “get work or starve” but a question of “get work or be despised and despise yourself”. Living on welfare sucks in Germany, too. And if you have been out of work for a few years that’s it, practically - every potential employer will shy away. There is practically no market for unskilled and untrusted labour.
The phenomenon of the ‘working poor’ is much less pronounced than it is in the US.
People who get a worse deal: illegal immigrants (as they cannot claim benefits without giving themselves away) and refugees/asylum seekers who get their benefits reduced/partially in kind in the first period.
I was undoubtedly living a sheltered life, in West Los Angeles of the 1970s, but it was when I lived in Germany for a year between '77 and '78 that I first regularly saw homeless people. There weren’t a great many, but you did see people sitting on the ground begging, sometimes with a sign that said “Homeless” or “War Injured”. And I remember one I used to see in the city center nearly every day, who used to retrieve things out of trashcans with a long stick that had colored streamers on the handle end.
Germans are simply voting their own bread and circuses. While Americans wring their hands over 1.6% growth, Germany’s economy only grew 0.2% last year. Next year, the U.S. is forecast to grow at about 4% (slightly above the world average), while Germany is expected to grow at 0.6%.
Germans get 13 statutory holidays a year, and the average German gets 28 days of paid vacation. That means the average German gets about 1.5 months off a year, while Americans and Canadians get about half that. The average factory worker in Germany works 1557 hours a year, compared to 1904 in the U.S.
Add punishingly high tax rates to pay for elaborate social programs, and Germany is prepped to underperform the world economy for the foreseeable future.
A different of 2-3% per year in growth rate between Germany and other major Western economies means that in a decade or two Germany will lag far, far behind the rest of the west.
TAANSTAAFL. There ain’t no such thing as a free lunch. You can tax and spend your way to prosperity - for a while. But if you choose to spend your wealth on vacations and social programs, while others around you re-invest theirs and work harder, then don’t be surprised if soon the middle class in your country are living poorer than the poor in your neighbor’s countries.
You need to look at things over a longer period of time, Sam. Page 2 of this chart shows about 3 decades worth. The US had higher growth in the Reagan years, but both countries are pretty comparable otherwise. Unification was a big blow to the overall German economy. But I’ve been to Germany many times, and I can report that the lifestyle of the middle class there is OK.
Are you advocating no growth as a viable strategy?
While your statement that growth is not infinitely sustainable, there is no evidence that it’s not sustainable over so long a period of time, relative to the lifesapan of a human, that it might as well be infinite.
>But if you choose to spend your wealth on vacations and social programs, while others around you re-invest theirs and work harder, then don’t be surprised if soon the middle class in your country are living poorer than the poor in your neighbor’s countries.
You speak as if money spent on “vacations and social programs” vanishes down some black hole. It does not, it is as valid a part of the economy as money spend on, say, SUVs or electric shave cream warmers.
How do you account for the fact that the Australian economy out-performed the US economy for the last few years, yet we have (despite the current govt) a better social safety net than the US does?
People used to justify the casual dumping of toxic substances because Earth’s supply of clean air and water was so vast it was virtually inexhaustible.
Unfortunately, there’s a great deal of difference between inexhaustible and virtually inexhaustible.
The amount of resources available on Earth is limited. Even as we increase our capability to use the resources that are here, we sacrifice in gaining access to those resources. A steady-state is inevitable… and planning for such is inherently desirable.
No, the Australian economy didn’t do better than ours. That’s logically impossible. The United States of America is the greatest country in the world, and if you’ll let mere facts blind you to that self-evident truth, I feel sorry for you.
I’m not really talking about past performance, I’m talking about what Germany is setting itself up for in the future.
You can’t have a population that works 20% less than other major economies and expect to have similar growth rates. You can’t have extremely high taxation and extremely stringent regulations in the workplace and not take a hit on productivity.
Now, does Germany have other advantages to offset these structural flaws? I don’t know, but I don’t think so. They still have reunification problems on top of this, and their membership in the Euro is going to cause monetary problems.
It’s not just Germany, BTW. France has similar problems. So do a number of other European countries. The fact is, even though the U.S. took a massive economic hit on 9/11, it has outperformed Germany’s economy in the last two years, and next year the difference is going to be dramatic if forecasts hold. Economists are predicting anything from 0-.6 percent growth for Germany, and anywhere from 3-4.6% for the U.S. Canada will perform about the same as the U.S.
If that kind of a GDP gap exists for not that many years in a row, you’ll see a major divergence in standards of living between North America and the worst affected European countries.
Of course, it doesn’t have to stay that way. These things are often self-correcting as the population wakes up to their structural problems. There’s a bit of a free-market movement building in France, and recently in Germany the public unions had to back off a demand for 35 days of vacation a year due to public backlash.
Of course you’re correct that a small difference in growth rate will translate into a large difference in std of living over time. And I’m sure we would agree on most economic issues. But I don’t think Germany will be left too far behind simply because the US makes its fair share of economic mistakes as well. And with the US taking on the burden of becoming the world’s policeman, we have a pretty big drag on our economy that countries like Germany don’t.
I completely agree with the “self-correcting” mechanism you mention. People often mistakenly make linear extrapolations of current conditions. But humans have a tendancy toward inaction until a crisis or near crisis appears. It’s amazing what changes people can make when they have to.
Perhaps. But even if you’re right, if you enter a period of stasis too soon, you’ll be left in the dust. It’s kind of a prisoners’ dilema since you somehow have to convice the other 6 billion people to cooperate, and not to cheat.
The gap between European countries and USA was immense.
The gap is now about zero.
The social security in most of the European countries are much better than in the other world.
Sam, the question is not simple, but for instance my country, Finland, has grown very fast the last 20 years when it has had a social security as good as the German one.
Maybe even better.
Just about homeless in Finland:
if You have a severe drinking or drug problem and do not take the (free) hospitalisation, the society do not have to give You any social security. (This is an extreemly rare case.)
In fact it means that You live in the woods.
In any other case, the community has to, according to law, give You and Your family food and shelter. It is counted to be cheeper to help You than to ‘breed You to an enemy of the society’, eg. stealing Your bread, robbing etc.
However there is huge social problems with giving work to elder people, lets say 50 - 65 years old.
This ‘drag’ as well as the huge deficites in place now, and the massive movements of skilled labor to third world nations in just about every industry, pretty much garuntees that we will never out pace the std of living in europe.
Growth is sustainable forever. Economic growth is not caused just by the consumption of resources, it is also caused by improvements in technology and improvements in productivity. The standard of living in this country is much higher than it was 100 years ago and yet the forests are larger and there is less land being farmed. As long as human ingenuity has no limits there is no reason why economic growth should have to have a limit.
The trouble Europe will have is twofold. The social safety net is a huge drag on the economy and will assure anemic growth rates for the foreseeable future. The new EU governmental level will add to this effect.
The second problem is that the birth rates are well under what is needed for a stable population, so the population is aging and not being replaced. This will mean more retirees and infirmed for each worker. This demographic crisis along with the slow economic growth will mean sinking standards of living for the Europeans.
In the US economic growth is more robust and immigration keeps the demographic crisis from being as serious. In the near future as these trends intensify the standards of living in the US and europe will grow more and more divergent.
Den Beste has covered this topic more intensly on his website and I would recommend any interested in this topic go there.