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I am married to the love of my life and am finally able to shower him with all of the attention he deserves. I am now retired and living the life here in Europe. I am an American, he is an Australian, and this is our second overseas address. The first was Shanghai, China and now Munich, Germany. Come along and live the life with us as we continue our adventure of discovering all Europe has to offer.

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Sunday, November 21, 2010


Americans are facing rough times and it's about to get rougher for America's least able to survive economic strife.  Unemployed Americans have collected $319 billion in jobless benefits over the last three years.   This cost will be the topic of much debate in Congress in the coming weeks while they ponder whether or not to extend unemployment benefits for the 5th time this year.  If it is not extended by Nov. 30th, two million people will lose their benefits.

Germany, on the other hand, is riding high on a crest of economic good times.  Unemployment is no where near American numbers and because of good German engineering, goods are in high demand and account for their driving growth.  According to the "Germam Local:"

While the economies of countries like the US, Britain, France, Spain or Greece are still struggling or facing drastic austerity measures and angry street protests, Germany has weathered the global financial and economic crises well. There is no sense of a divided society here. 

It's all due to a convergence of contributing factors: the delayed effect of former Chancellor Gerhard Schröder's labour market and welfare reforms known as the Agenda 2010, wage restraint by trade unions, the 'cash-for-clunkers' car purchase scheme, a relatively moderate stimulus plan, and propping up the eurozone by involving the International Monetary Fund. More than once, Merkel was criticized for any and all of these measures. But at the end of the day, she was always proved right.

Success breeds resentment, and it's no surprise that German opposition parties and certain nations are grinding their teeth, because the German example puts pressure on their leaders to explain themselves.

Although the Germans have managed their economy well, the U.S. Treasury Secretary urged that Germany's trade surplus' be capped (banned if they go over a certain level.)  I agree with the German indignation when faced with this suggestion.  Why should they be limited in economic growth because of the fiscal mismanagement of other countries, especially the U.S.?  The Germans think the U.S. and others are envious of their prosperity, and they could be correct.  I think if the shoe was on the other foot, we would have a hard time complying too.  

There is just no substitute for honest-to-goodness high quality and careful fiscal management. Let them reap what they have sown, I say.  We Americans would do well to emulate them rather than envy them.  Guess our leaders do have a lot of explaining to do.


G in Berlin said...

Well, to be fair, the German government has tightly controlled consumption by keeping prices artificially high. There's a reason that most expats buy clothes, shoes, books, electronics at home. It's illegal to have sales when one wishes here. It's also illegal to discount books. Italian shoes cost much more here than they do in the US and all these things are due to governmental controls, The results of these controls depress consumption and allow wages to be held in check. In addition, generous social supports allow people to be less interested in achievement, because life is liveable even without a job or without a well paying one.
Meanwhile, the US is subsidizing governments that aren't helping in the global crisis through lack of such tariffs and domestic supports. That's not quite fair.
I'm not in favor of a consumer society, but if Germany doesn't want to help consume the world economy out of ts mess, perhaps we should slam some domestic taxes on products that won't allow it to export its way out of its problems?

C said...

I'm not sure this is entirely a political movement -- I think the American mentality is likewise at stake and Americans who believe that helping others is socialism and should be avoided at all costs are being detrimental to themselves and favoring corporations (something our politicians do as well). One of the best things the Germans have done in terms of employment numbers has been to eliminate the ability to fire people. Blessing or curse, every person has to be given 3 months notice before being fired (or give 3 months before quitting) and they can only be fired in exceptional cases. It was cursed in times of fiscal prosperity, when German unemployment numbers were in the low double digits but is now praised when the US has surpassed those numbers. The social system there also provides an incredible network for which -- gasp -- people pay high taxes. I considered my taxes an incredible savings plan and I'm sorry more Americans can't be that far-sighted.

Expats Again said...

G, you have brought up some very interesting facts that should be considered when discussing economies. Without considering all differences it is hard to make an educated guess as to why things should change or remain the same. Thanks for your perspective and I do agree with you on more than one point.