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4 Bumps

Could Europe's problem lie not with debt but with low productivity?

This writer poses an interesting theory ...

Europe's economy is weak and growing weaker. Many households will be trying to pay back debts rather than spending, and aging populations will bear down on consumption too. Austerity has replaced stimulus as the watchword of governments seeking to pay down deficits. The real problem behind the debt, however, is productivity. Europe’s per capita GDP is 24 percent lower than that of the United States, a gap that amounts to a total of $4.5 trillion in annual income. While Europe has made a societal choice of more leisure time over more work, the major reason for slower growth is a widening productivity gap. Even when Europeans do work, they work less productively. The only way to unleash the dynamism and growth Europe needs to pay its debts is a new wave of structural reform.

At an October protest in Paris, a man holds up a sign that in English reads “Listen to the people’s anger.”


Asked by tasches at 4:54 PM on Nov. 24, 2010 in Politics & Current Events

Level 48 (298,202 Credits)
This question is closed.
Answers (5)
  • The myth of a happy Utopian society of Scandinavian countries is just that...a myth. The links below expands on the simplistic premise that socialism is an ideal way to live. Much of Europe is in turmoil because the outcome of socialism is mediocrity within the masses...there is no great incentive to do well...invent, expand or generations fall in to the tranquil state of "whatever" and the outcome produces less and less. Profit motive is what makes people take risks and that is what builds businesses and provides jobs for people.

    Answer by annabarred at 6:50 PM on Nov. 24, 2010

  • It lies with both ... a problem that America is soon facing.

    Answer by Gal51 at 5:36 PM on Nov. 24, 2010

  • I agree with Gal...what Europe is facing, and what we can see coming is the FAILED attempts at SOCIALISM!! When there is more population than there are resources for the government to support all of them (read: taxable incomes), then the system implodes, and chaos reigns!

    Answer by LoriKeet at 6:45 PM on Nov. 24, 2010

  • I agree with Gal51, LoriKeet and annabarred... Implosion is on the way, thanks to the progressives!

    Answer by agentwanda at 7:49 PM on Nov. 24, 2010

  • Interesting!

    Answer by SavageGrl at 6:48 PM on Nov. 24, 2010