Alex's Journal

The BBC is reporting that Germany is exiting the recession that has affected the entire world for the past couple of years. Germany, along with France, is one of the first countries to emerge from this economic downturn and yet the German government did next to nothing to try to pull the country out of the recession.

An article in the Wall Street Journal states the German stance on it:

“Germany has the most capacity in Europe to increase spending, but Berlin has argued against running up big deficits…”

“Last year, according to the IMF, the U.S. pumped an extra 1.1% of GDP into the economy. Germany did next to nothing.”

I think the American government needs to take a page out of Germany’s book. For being a socialist country, Germany seems to have less government intervention in the economy than we do.

Reuters has an interesting article about how the addiction to bailout money from the government could wind up causing a lot more trouble than it is worth.

U.S. companies, consumers and communities may grow so addicted to government financial help that cutting them off could trigger another recession soon after the current one ends.

Between the U.S. Federal Reserve’s trillions of dollars in lending programs, the $787 billion stimulus package and $700 billion — and counting — in bank bailout funds, no one can accuse officials of soft-pedaling their crisis response.

But there is increasing concern that when the flow of public money subsides — beginning next year when much of that stimulus package is spent — the economy still won’t be strong enough to stand on its own.

Let’s see, we have companies such as AIG and GM who cannot stay afloat without bailout money, but what is going to happen to them when the bailout money is all gone? What happens to them when the government won’t or can’t give them more money? Their businesses are going to fail. They would have failed in the first place without a bailout, so why is the waste of money that is the bailout worth giving them in the first place? To “try and save them” is not going to do any good, because, as the article argues, companies are just going to grow dependent on an automatic, assumed income from the government. There is no motivation to change themselves and make themselves more efficient and profitable independently. So where do we end up? With companies reliant on government money to survive.

On my seeming never-ending quest to inundate myself with as many blogs as possible, I have created another one. The blog is called Despotic Democracy. This one I will be doing with a good friend of mine about politics and the US Government. Some of what I post on there may be redundant with what I post here, but there will be other content that doesn’t show up here; particularly that which my friend writes. Here is a bit about the blog from my initial post:

I suppose I will write a short introduction to our new blog, Despotic Democracy. The idea behind this blog is to express our opinions about the way the American government is handling domestic and international affairs such as the current economic crisis.

I will also say something about myself. My name is Alex and I am a university student who has lived abroad twice in my life and have seen things from a different perspective. Generally I tend to be very conservative in my political views and I fully support the Libertarian Party and its views on how the government should function. I am generally highly critical of the government and its responses to many of the situations we have faced in the past few years and in the present. This blog will be a mechanism through which I express my opinions of the government’s actions and support them with blatant facts that they somehow have missed.

Again, the blog is called Despotic Democracy and should be quite an interesting ride.