The notion that government can keep robbing Peter to pay Paul indefinitely was always unrealistic. The creation of “entitlements” did not happen in America under FDR, as many people think. Bismarck, the Iron Chancellor of militaristic Imperial Germany introduced old age pensions, workers compensation, and related state programs in an effort to placate German socialists, which were a major power in German politics.
There is a theme to news stories about the PIGS (Portugal, Ireland, Greece, and Spain) in the last few years: Rosy projections always turn out worse than expected. So it's of little surprise that Reuters announced on July 11 that the recession in Greece is worse than the “experts” had predicted.
Europe’s slow-motion economic collapse continues apace as Eurozone governments and banks continue to wring their hands over what to do to postpone the inevitable Greek default. And now there’s a new wrinkle: Italy, whose level of sovereign indebtedness relative to GDP is second only to that of Greece, has suddenly appeared on investors’ radar screens. If Italy — the second largest economy in the Eurozone — goes the way of Greece, Ireland, and Portugal, there will not be enough money in Europe’s rapidly-dwindling rescue fund (the European Financial Stability Facility or EFSF) to effect a bailout.
Pills found on board a 2nd century B.C. shipwreck were packed with crushed carrots, parsley, onions, alfalfa, and other vegetable matter, conforming to the recipes contained in ancient medical treatises.
Americans know the term "stagflation"; the decline in economic activity accompanied by an artificially inflated money supply is what Europe is presently experiencing. On Thursday, European Central Bank President Jean-Claude Trichet announced that the ECB had raised its interest rates 1.5 points and suggested that this action, intended to contract the money supply, might be pursued more aggressively in the future — even though the so-called "PIGS" nations of Europe (Portugal, Ireland, Greece, and Spain) need influxes of money in order to prevent default.