The Faces of Economic Hardship

Now that the German government has finally ditched its initial stance of taking only perfunctory measures in reaction to the economic crisis and has instead launched its own expensive stimulus program (as we discussed in the very last post, just below), it’s understandable that there would be some new Teutonic curiosity about how other countries are coping – I mean, now that Angela Merkel’s government has ceased writing everyone else off as a bunch of free-spending Nervous Nellies. So Die Zeit takes up the comparative economics assignment in fine style with a captioned picture-series entitled “Ways out of the crisis,” and dealing with the approach to recession-relief taken by seven of the world’s main nations, one page per country (pages 8 & 9 just have supplementary content).

Those without a facility in German will of course only be able to fully savor each page’s accompanying photo, which in each case presents a scene out of a soup-kitchen or other poor-relief facility in the respective country. Oh, and if your eye should happen to catch sight of the various numbers mentioned in the texts to the right, you will need to remember that Billion (plural: Billionen) in German actually denotes what Americans would call trillion; it’s Milliard in German (plural: Milliarden) that is “billion.” Note that I will, as usual, use the American terminology.

Otherwise, you can be sure that each country discussed (in order: USA, Russia, Brazil, the UK, France, China, and Japan) is taking active, although varying, measures to counteract the economic crisis. The prize so far goes to China which, when central government outlays are added to additional monies released for provincial governments, has committed to around €1.5 trillion in spending, or 2/3 of current Chinese GDP. Then again, they started earlier (the first major stimulus plan was announced in November), and they can afford it more, holding around €1.4 trillion in foreign exchange reserves. And it does seem that conditions there – except for foreign trade volume – are already starting to turn up. The US, in stark contrast, at this point according to the article can still point only to Barack Obama’s still-inchoate plans for an stimulus package of around €600 billion (no mention is made of recent suggestions to devote some of that to tax-cuts, and yes, the article cites it in terms of euros), which still will raise the federal budget deficit to 11% of GDP. So the Die Zeit editors here are ignoring the $350 billion of the TARP program already spent, as well as that stimulus-money (remember that?) that Congress spread around to all tax-paying citizens last spring – but, come to think of it, there’s not much room to object to them doing that anyway.

Notable mentions elsewhere in this article include the unique aspect of Russia’s relief approach which, other than devoting reserves to support the value of the ruble, features direct money-grants in State assistance to an eligible list of over 300 businesses. (What’s Russian for “corruption” again? How about продажность – “prodazhnost.”) And the brief entry on France points out that the public debt there has now risen to around 4% of GDP, i.e. above the 3% level that all euro-zone members, including also Germany, are supposed to keep below.

UPDATE: Regarding China, others are not so sanguine: Chinese Economy Faces 2009 “Hard Landing,” from Bloomberg (noticed at naked capitalism).

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