Spain, An Unlikely Talking Point in the U.S. Presidential Campaign – NYTimes.com

Is Spain the new Greece, aka poster child for failed economic policy?

Romney has held up the country as an example of how high taxes and excessive government spending can precipitate financial ruin. Obama, for his part, has suggested that the Spanish government and the European Union acted too slowly after the country’s massive real-estate bubble burst. These divergent appraisals track the two candidates’ contrasting political platforms: Obama thinks government should facilitate economic recovery; Romney wants to limit its reach through unstinting budget cuts.

via Spain, An Unlikely Talking Point in the U.S. Presidential Campaign – NYTimes.com.

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10 thoughts on “Spain, An Unlikely Talking Point in the U.S. Presidential Campaign – NYTimes.com

  1. claytonconley says:

    I agree and disagree with both President Obama and Governor Romney. I strongly believe that the government can aid in the financial recovery of nations after this Great recession. The Federal Reserve has done a wonderful job in keeping our currency fairly stable and avoiding outrageous inflation that should have followed the 2008 stock market crash. I do not, however, agree that the government is the sole source for recovery. The private sector requires efficient economic policies aimed at correcting inefficient policies that have good intentions, but bad incentives (such as subsidies, bailouts, and protective tariffs that discourage free-trade.) The government, in the economic sphere, is a necessary evil – that when used judiciously can help a nation thrive and when legislated poorly (Spain, Italy, Greece, Portugal) can undermine the constructs of society. http://www.nytimes.com/2012/07/08/business/behavioral-science-can-help-guide-policy-economic-view.html?pagewanted=all&_r=0

  2. ludimilasdp says:

    The Spanish government has been failing to spend enough in this situation makes matters much worse and in other circumstances spending would be exactly the right thing for the Spanish government to do in order to ride out this depression, but that doesn’t work because they can’t borrow at the low rates of the US or even Britain. They are locked into high borrowing costs because the EU is not truly and integrated system or a lender of last resort. Instead, the EU pushes a policy “austerity” that shrinks the entire GDP and increases the unemployment rates. The Spanish problem is complicated because there needs to be adjustments because labor costs are too high, they don’t have their own currency, so they can’t devalue, and what is worse, they are locked into a currency where the larger players and banks are religiously locked into a low inflation, so the only way to adjust wages is to raise unemployment to the extremes and then start cutting wages.

    http://www.nytimes.com/2012/10/27/business/global/jobs-data-underscore-rajoys-woes.html

  3. ayoungkang says:

    I appreciate the thoughtful comments, I got to understand the situation of Spain much better. I am wondering if the candidates are purportly using such visual examples that not all american citizens are as aware and educated as scholars. This reminded me of Paul Ryan’s Republican response speech to President Obama’s state of union speech, where he stressed the exact same point as governor Romney here, that we must slash government spending in order to avoid becoming like Greece (http://www.nytimes.com/2011/01/26/us/politics/26repubs-text.html?pagewanted=all). I couldn’t find the article, but I remember reading an op-ed saying that problem in Greece cant be simply put that way, and that Greece was actually doing very well in terms of keeping governmemt spending balanced. I feel that the candidates must be aware of them already (so I guess based on their books) and they are using drastic examples just to alarm voters and catch their attention.

  4. Jordan White says:

    So personally I haven’t really heard that Spain was having issues. However this seems to point out a larger problem with the idea that the invisible hand fixes everything. That is clearly not the case and the fact that it was an issue with the private market in Spain is evidence of that. Also what this is evidence of is, you can’t slash spending during a recession. If you do the economy gets worse and trust in your nation goes down. And for nations such as Spain, Greece, UK, US etc. Trust from nations is what we need to survive. We have the privilege of having interest rates to our countries be extremely cheap, thus it is usually okay to run debt since in the long run our economy will get a boost paying that debt off. So to be in a situation such as Spain, it is important to get help. Sadly, it doesn’t seem like the EU is going to do that, which is really bad since Spain will have trouble with their debt and if they can’t get that under control, faith in them will be gone leading to higher interest, and them having a harder time paying it back and then it just becomes a circle. The EU would be smart to bail them out of this since if it keeps happening, the dominance of the Western world could come crashing down.

    Instead of posting an article I am posting two videos, one dealing with Greece and their debt and one about our debt. Both though important to this issue.

    Greece; http://www.youtube.com/watch?v=mEVqeaFHsHE
    USA; http://www.youtube.com/watch?feature=player_embedded&v=3ugDU2qNcyg

  5. Sara Gomez says:

    At first, I thought that Spain is worry of tomorrow’s outcome because each candidate has a different perspective on what should be done in Europe, while Obama thinks that the government should facilitate economic recovery while Romney’s position is uncertain. However, I found out that Spain is not only interested in the outcome because of the position of the presidents with respect to the European Crisis but also because Spain (SCYTL) will be counted US presidential election votes. I am not completely sure how accurate the source is but the company SCYL has the means of manufacturing the outcome of the 2012 elections. They would report the votes of Americans in 26 states.

    http://ireport.cnn.com/docs/DOC-776220
    http://www.westernjournalism.com/spanish-company-will-count-american-votes-overseas-in-november/

  6. The situation in Greece and Spain is interesting and relevant to the economic future of the United States. Both Greece and Spain have responded to the global crisis (precipitated by the American financial crisis) through economic policies of austerity (although only under pressure from countries such as Germany that would fund any bailouts). Both countries are experiencing varying levels of domestic discontent as already poorly performing economies have been hit hard by these austerity measures.

    Now how is this relevant to the United States? The rhetoric leading up to today (the election) coming from the Republican Party has been of austerity– of limited government and drastically cut budgets. There are two questions that needed to be asked here: will austerity help the economy in the short or long-term and is the pain going to be worth the gain? Given the situation in Spain and Greece these are looking like difficult questions to answer.

    • AsaClements says:

      Spain and Greece may have been kicked over the edge when the US financial market imploded but to suggest that the US started or even caused their issues would be unjust. Spain and Greece got where they are because their governments got too big and their economies, their taxes and their productivity became too small. Their social programs, minimum wages and rampant spending sent them to the edge. And now that the debts have come due and the funds are lacking and the need to tighten the belt is a must the people of Greece and Spain are the ones being asked to eat the debt; via a lesser wage, fewer social programs and more restricted capital for businesses.
      No the US did not cause the crises in Spain and Greece but if we don’t curb our own spending we are liking to follow suit.
      http://www.cnbc.com/id/46499336/Can_America_Become_the_Next_Greece

  7. Here is a link to go with my above post. It’s a post from Nobel-prize winning economist Paul Krugman about the effects of austerity on European economies:

    http://www.nytimes.com/2012/09/28/opinion/krugman-europes-austerity-madness.html

  8. logankeicher says:

    Im a big supporter of countries letting things run their course without major government interference. It seems that when a government interferes to enact a policy, its usually something that reaps immediate benefits and rarely has a long term objective. In the case of Spain, I think this may be the case. The short term period of certain policies has run out and now they are no better off. The long term solution is usually to just leave things be and let the people and the market figure things out. This is why Obama and Romney’s opinions differ because one is in favor of more government action and the other is not. I think that it would be foolish for the Spanish government to try and enact another policy to try and get them out of this situation. Instead they should admit the wrong done, make the necessary budget cuts, and let the market get things back on track. This is an unfavorable policy because it does not offer immediate help for the citizens who are struggling, but it will help many more people in the future to do so.
    http://www.bbc.co.uk/news/world-europe-19881851

  9. joshuacordon says:

    http://www.ibtimes.com/viva-obama-how-spain-views-us-elections-861220

    I’ve been reading articles that say that alot of Europeans including Spaniards favor Obama. One of the complaints they specifically had towards Romney was that he was more right-wing during the primaries, while more moderate during the past couple of months. All I can help to think is that apparently the same rhetoric is apparently regurgitated by media outlets all over the world. When I see Mitt Romney doing this I think, “No duh, it is what one should expect.” Yet everybody acts surprised. He is merely doing what every single politician in the world does. Appeals to the voters. Then again who actually does some critical thinking these days. I would truly appreciate actual criticism not the same old useless banter and simple-minded rhetoric. The same goes for criticism towards Obama. Far too often people make generalized statements of criticism that don’t really mean much. Anyhow just wanted to get that off my chest. Phew…

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