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German economics

2005-01-31 16:26:55.513641+00 by Dan Lyke 12 comments

I've seen a number of people use the debt load of the governments of Japan and Germany recently to excuse the out of control deficit spending of the Bush administration, saying that in comparison we've got nothing to worry about. I kind of thought that Japan's decade plus of stagnation despite the fact that their government has been spending out of control on unused public works projects, and now having the maintenance costs of all of those new commitments piled on top of the debt load is making things even worse, but I didn't know about Germany's economy.

Well, it turns out the Germans are fucked. Literally: Woman told she has to take a job as a prostitute or she'll lose her unemployment benefits.

[ related topics: Politics Sexual Culture Current Events Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2005-01-31 17:50:28.831333+00 by: ebradway

The differences between the US and Germany:

In the US you only get about four months of unemployment benefits before you are SOL. In Germany, it appears to be 11 months before you are essentially booted off the roles.

In the US, the last option isn't prostitution as that's immoral and illegal, it's join the Army and killing people - perfectly acceptable.

#Comment Re: made: 2005-01-31 18:43:33.844217+00 by: Larry Burton

Dan, considering the extenuating circumstances of 2001 through the present I can be a little more forgiving of our debt load at the moment. I won't be forgiving of it lasting much longer.

Eric, I spent nine months on the unemployment roll in 2002 and was eligible for a three month extension after that ran out so I don't think you are exactly correct on that first statement.

#Comment Re: made: 2005-01-31 19:19:21.316448+00 by: Dan Lyke

Larry, if I at any point had believed that the minimum of $280 billion we'll be spending on the little excursion into Iraq had anything to do with the events of September 11, 2001, I might be more sympathetic. If, say, that money were being spent to track down Osama bin Laden[Wiki] or make further inroads in rooting out the support structure of those who attacked the United States then (or back in February of '93) and causing changes in power in the countries that supported those terrorists, then I'd be willing to forgive some of the overextension of our means.

I might even be able to buy that it's a good thing for humanitarian purposes, if it didn't mean that we're pulling troops away from said countries by committing to Iraq.

As it is, while I'm glad to see Saddam Hussein[Wiki] out of power and since we're committed I really really really hope beyond hope that the Bush gambit works, but if you think the $280 billion is where it ends if we're going to change the opinions of a balkanized country that had been a nice secular buffer that kept Iran in check and provided a little infighting that kept the focus off of external enemies (like us) in a region ruled by violent religious fundamentalists, I could make a mint selling those pills in the club scene.

#Comment Re: made: 2005-01-31 19:53:41.997014+00 by: Larry Burton

I thought we were talking about deficit spending as a percentage of our GDP. We can disagree with the way the money is being spent probably a hundred different ways but if the argument is on how much we can spend then what it is spent on is irrelevent.

From 2001 to 2003 our economic growth slowed way down which means our GDP did not climb as much as we would have liked it to. Growth is picking back up now which means that our deficit should fall in regards to the GDP unless we spend even more than we are spending now. With a growing economy tax revenues should also climb which should also reduce our overall budget deficit unless we continue to increase our spending.

Now all thats fairly simplistic but that's basically the way I see it and why I'm willing to wait and see for a little bit longer.

#Comment Re: made: 2005-01-31 20:24:29.949747+00 by: ebradway

Larry: I went on Tennessee Unemployment on 10/31/2001. The company I worked for filed bankruptcy on 10/10/2001, almost exactly one month after 9/11/2001 (it failed because of security warnings issued post-9/11 about the online finanicial industry being the next big target). My regular unemployment ran out after six months, on 5/1/2002. Fortunately, I was part of a big enough mess that Bush signed the extension to unemployment that week and I got twelve more weeks of unemployment. I started working for UTC on 8/1/2002, after receiving my last unemployment check. I guess the number of benefits months varies as much as the amount of benefits (if I remember, right, you filed in Georgia). FYI: The job I am in now pays 35% of what I made before I became unemployed and I have absolutely no benefits.

Dan: Let me know when you figure out those pills!

#Comment Re: made: 2005-01-31 20:53:27.370828+00 by: Dan Lyke

Oh. Sorry, I associate the economic downturn with 2000, not 2001, so the "extenuating circumstances of 2001" to me mean the attacks on the World Trade Center and the Pentagon.

Interesting table from the CBO, federal revenues didn't fall off dramatically until 2002, which is also when federal spending took the huge leap up.

Especially interesting to take those numbers into a spreadsheet and look at debt divided by revenues for those 40 years. Also interesting is looking at the ratio of each year's revenue and spending to the previous year (although some notion of inflation here would be useful).

Dang, must stop crunching numbers and get back to work.

#Comment Re: made: 2005-02-01 02:10:54.246044+00 by: jeff [edit history]

While the topic of crunching numbers is fresh, the transition costs of semi-privatizing the Social Security are estimated at 1-2 TRILLION dollars alone.

And once again, the Bush administration is attempting to use four-letter words (FEAR, LIES) to drive their policies home, where the religious-right seems to resonate best. Contrary to what you may believe, the Social Security system is NOT "broken," and it is NOT in immediate need of "radical repair."

The summary is that (1) this is ideologically driven, as the radical-right has always opposed the very idea of Social Security; (2) this is a ruinously unafforadable near-term approach to a "problem" that, such as it is, won't manifest itself until 2052, and never will with relatively minor adjustments to the current system; and (3) it won't work, as nations that already have tried it have found, and now have the problem of elderly poor re-emerging. Social Security is mostly a pay-as-you-go system, it is a social insurance plan not a retirement investment plan, and its surplus is currently invested in U.S. government bonds, the most secure instrument in the world (well, they were, anyway, until the "w" administration came along). The Bush administration's claim of a crisis is just more lies from the bunch who brought us Iraq. They care only about their radical-right agenda, and they'll stop at nothing including bankrupting this country in order to ram it down our throats. We should all know that by now:

Little Black Lies by Paul Krugman

SYNOPSIS: Krugman at his best! He absolutely demolishes the despicably racist -- and false -- premise being spread by the w administration that racial minorities benefit less from Social Security because they don't live as long.

Social Security privatization really is like tax cuts, or the Iraq war: the administration keeps on coming up with new rationales, but the plan remains the same. President Bush's claim that we must privatize Social Security to avert an imminent crisis has evidently fallen flat. So now he's playing the race card.

This week, in a closed meeting with African-Americans, Mr. Bush asserted that Social Security was a bad deal for their race, repeating his earlier claim that "African-American males die sooner than other males do, which means the system is inherently unfair to a certain group of people." In other words, blacks don't live long enough to collect their fair share of benefits.

This isn't a new argument; privatizers have been making it for years. But the claim that blacks get a bad deal from Social Security is false. And Mr. Bush's use of that false argument is doubly shameful, because he's exploiting the tragedy of high black mortality for political gain instead of treating it as a problem we should solve.

Let's start with the facts. Mr. Bush's argument goes back at least seven years, to a report issued by the Heritage Foundation -- a report so badly misleading that the deputy chief actuary (now the chief actuary) of the Social Security Administration wrote a memo pointing out "major errors in the methodology." That's actuary-speak for "damned lies."

In fact, the actuary said, "careful research reflecting actual work histories for workers by race indicate that the nonwhite population actually enjoys the same or better expected rates of return from Social Security" as whites.

Here's why. First, Mr. Bush's remarks on African-Americans perpetuate a crude misunderstanding about what life expectancy means. It's true that the current life expectancy for black males at birth is only 68.8 years -- but that doesn't mean that a black man who has worked all his life can expect to die after collecting only a few years' worth of Social Security benefits. Blacks' low life expectancy is largely due to high death rates in childhood and young adulthood. African-American men who make it to age 65 can expect to live, and collect benefits, for an additional 14.6 years -- not that far short of the 16.6-year figure for white men.

Second, the formula determining Social Security benefits is progressive: it provides more benefits, as a percentage of earnings, to low-income workers than to high-income workers. Since African-Americans are paid much less, on average, than whites, this works to their advantage.

Finally, Social Security isn't just a retirement program; it's also a disability insurance program. And blacks are much more likely than whites to receive disability benefits.

Put it all together, and the deal African-Americans get from Social Security turns out, according to various calculations, to be either about the same as that for whites or somewhat better. Hispanics, by the way, clearly do better than either.

So the claim that Social Security is unfair to blacks is just false. And the fact that privatizers keep making that claim, after their calculations have repeatedly been shown to be wrong, is yet another indicator of the fundamental dishonesty of their sales pitch.

What's really shameful about Mr. Bush's exploitation of the black death rate, however, is what it takes for granted.

The persistent gap in life expectancy between African-Americans and whites is one measure of the deep inequalities that remain in our society -- including highly unequal access to good-quality health care. We ought to be trying to diminish that gap, especially given the fact that black infants are two and half times as likely as white babies to die in their first year.

Now nobody can expect instant progress in reducing health inequalities. But the benefits of Social Security privatization, if any, won't materialize for many decades. By using blacks' low life expectancy as an argument for privatization, Mr. Bush is in effect taking it as a given that 40 or 50 years from now, large numbers of African-Americans will still be dying before their time.

Is this an example of what Mr. Bush famously called "the soft bigotry of low expectations?" Maybe not: it isn't particularly soft to treat premature black deaths not as a tragedy we must end but as just another way to push your ideological agenda. But bigotry -- yes, that sounds like the right word.

#Comment Re: made: 2005-02-01 06:01:59.588467+00 by: crasch

If you, as I do, want to see sex work treated with respect, it seems to me that you have to treat it just as you would any other business. Yet the implication of most commentators on this story is that it is somehow unconscionable that she accept sex work or give up her benefits. But why? Sex work is rather less risky than say, coal mining, construction, or even pizza delivery. And why this particular sin? Would there have been as much outrage if she had refused a job as a card dealer? An alcohol distributor? A tobaccanist?

I see it as a good sign that sex work is finally being recognized as a legitimate, honorable profession.

#Comment Re: made: 2005-02-01 06:03:50.130561+00 by: Pete

Dan, you've been had.

Read the last article again, with a very critical eye, and you'll see that no German government agency has pressured women to work as prostitutes.

The article does everything short of outright lying to make the reader believe that woman are being coerced into prostitution, when in reality the jobs in question are non-prostitution jobs in brothels.

Don't believe the hype.

#Comment Re: made: 2005-02-01 08:17:22.535738+00 by: dexev

Pete, your point is well-taken -- nobody is yet being required to work as a prostitute to keep their benefits. They are being required to work in phone sex and as nude models, though. IANA german employment L, but it seems that the new regulation requires all work, including prostitution, be treated equally by job centers. That it hasn't actually happened yet doesn't make the law any less troubling.

crasch, we have a word for coercing someone to have sex against their will -- we call it rape. In none of your other examples are the workers required to partake of the sin they're peddling -- requiring someone to deal cards or serve beer doesn't require them also to gamble or drink. Forcing them to have sex with strangers, well, forces them to have sex with strangers.


#Comment Re: made: 2005-02-01 15:57:44.738492+00 by: Dan Lyke

Pete, thanks for the reality check. And, actually, since I'm not much on the notion of public unemployment insurance I've no problems with all work being treated equally by job centers.

The discussion here, my finishing Koba the Dread: Laughter and the Twenty Million[Wiki] last night, and a few other things, are causing some realignments in my politics. I'm not sure how they'll be reflected yet in my reactions to the current administration, because if anything I'm trusting both sides less, but... I'm thinking about some things.

#Comment Re: made: 2005-02-01 18:08:09.156824+00 by: Pete

No, they were not required to work as nude models, they were required to attend the interview, which is a vast difference.

Also, people much closer to the situation report that German courts have drawn distinctions between prostitution and other kinds of work when dealing with benefits, and that the law legalizing prostitution carries explicit rules against coercing people into that work.

More info here.