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Discussion: (2 comments)

  1. This is silly. Spain and Greece are in worse shape and have no hope of any recovery. The last I saw, Spian’s unemployment rate was in the 20-25% range and Greece’s unemployment is probably too high to accurately measure. How is Latvia worse than the Southern Euros?

  2. If you want to check the numbers (I’m looking at index mundi) you can see that from 2000 to 2008 the average population loss for Latvia was 19900 people per year. Over the years 2008 to 2012 the average population loss was 13500 people per year. So this so called “austerity” program in 2009 must have involved a time machine, to encourage all those people to emigrate back in 2000, right?

    I think Latvia will continue to improve, but there’s no particular reason to believe it should already be back to peak after only four years. The United States during the Great Depression took from 1929 to 1936 to recover the same GDP level, and even that recovery was temporary. It seems pretty clear that most of the worldwide prosperity of 2007 and 2008 was an unsustainable bubble anyhow (that’s why it was NOT sustained in just about every country on Earth).

    The word “austerity” as used by Keynesians means nothing more than any country that declines running up a massive government debt. As a taxpayer who cares about future generations, I refuse to count debt-fuelled growth as growth at all until that debt is repaid.

    We can compare the full cycle and see how long it takes for the US and Greece have their total government debt back to manageable levels, and only then shall we compare growth figures.

    Suppose there was a company and you were thinking about buying shares in this company. They just got a big loan from the bank and the CEO has a new sports car, the company has a bright shining office with a huge boardroom table, the staff have all the best sporting facilities and the biggest Christmas party. Would you buy this company? You would check the cash flow first and the debt situation, and suppose you find the debt is bigger every year, would you still buy it?

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