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June 16, 2005

Goodbye Europe

Goodbye Europe. (This is not a good thing.)

Europe as we know it is slowly going out of business.... Unless Europe reverses two trends -- low birthrates and meager economic growth -- it faces a bleak future of rising domestic discontent and falling global power. Actually, that future has already arrived.


It's hard to be a great power if your population is shriveling. Europe's birthrates have dropped well below the replacement rate of 2.1 children for each woman of childbearing age. For Western Europe as a whole, the rate is 1.5. It's 1.4 in Germany and 1.3 in Italy. In a century -- if these rates continue -- there won't be many Germans in Germany or Italians in Italy. Even assuming some increase in birthrates and continued immigration, Western Europe's population grows dramatically grayer, projects the U.S. Census Bureau. Now about one-sixth of the population is 65 and older. By 2030 that would be one-fourth, and by 2050 almost one-third.

No one knows how well modern economies will perform with so many elderly people, heavily dependent on government benefits (read: higher taxes). But Europe's economy is already faltering. In the 1970s annual growth for the 12 countries now using the euro averaged almost 3 percent; from 2001 to 2004 the annual average was 1.2 percent. In 1974 those countries had unemployment of 2.4 percent; in 2004 the rate was 8.9 percent.

...One way to revive economic growth would be to reduce social benefits, taxes and regulations. But that would imperil Europe's "social model," which supposedly blends capitalism's efficiency and socialism's compassion.

Consider some contrasts with the United States.... With high unemployment benefits, almost half of Western Europe's jobless have been out of work a year or more; the U.S. figure is about 12 percent. Or take early retirement. In 2003 about 60 percent of Americans ages 55 to 64 had jobs. The comparable figures for France, Italy and Germany were 37 percent, 30 percent and 39 percent. The truth is that Europeans like early retirement, high jobless benefits and long vacations.

The trouble is that so much benevolence requires a strong economy, while the sources of all this benevolence -- high taxes, stiff regulations -- weaken the economy. With aging populations, the contradictions will only thicken. Indeed, some scholarly research suggests that high old-age benefits partly explain low birthrates. With the state paying for old age, who needs children as caregivers? High taxes may also deter young couples from assuming the added costs of children.


A few countries (Britain, Ireland, the Netherlands) have acted, and there are differences between Eastern and Western Europe. But in general Europe is immobilized by its problems. This is the classic dilemma of democracy: Too many people benefit from the status quo to change it; but the status quo isn't sustainable. Even modest efforts in France and Germany to curb social benefits have triggered backlashes. Many Europeans -- maybe most -- live in a state of delusion. Believing things should continue as before, they see almost any change as menacing....

All this is bad for Europe -- and the United States. A weak European economy is one reason that the world economy is shaky and so dependent on American growth. Preoccupied with divisions at home, Europe is history's has-been. It isn't a strong American ally, not simply because it disagrees with some U.S. policies but also because it doesn't want to make the commitments required of a strong ally. Unwilling to address their genuine problems, Europeans become more reflexively critical of America. This gives the impression that they're active on the world stage, even as they're quietly acquiescing in their own decline.

I'm locally optimistic and globally pessimistic. The United States, 4 years ago this coming September, took one hell of a massive slug. Some called it a "bloody nose", but that trivializes just how significant of a hit it was. It practically shut down the economy for a month, and didn't get going again for a couple of years. Many jobs were lost, and the feeling of being safe - a feeling that we really didn't understand we actually had until it was lost - disappeared. No adult in America has completely recovered from 9/11.

Still, the United States has been fighting a long hard battle since then, and we're way back up. I see the United States as being a brilliant star which just keeps getting brighter every day. However, much of the rest of the world doesn't seem to be doing all that well. "Bleak" is the word that I'd use. It's anyone's guess which way its going to go.

The middle east, at least, looks like it's going to go through some positive changes. It's already started. Democracy seems to be catching fire with little sparks here and there. Eventually, enough sparks will fly from Afghanistan and Iraq to catch the rest ablaze. It's difficult to imagine it not happening. But, even as a democracy they could self destruct.

I rarely see bad news from Australia. John Howard's near landslide is definitely a good sign. But other countries just seem to be going in the wrong direction.

I'm glad that I'm not raising children and having to wonder about their futures.

"What had once been an alleged ideal is now a ragged skeleton rattling like a scarecrow in the wind over the whole world, but men lack the courage to glance up and discover the grinning skull under the bloody rags. That skeleton is socialism."
--Ayn Rand, from The Virtue of Selfishness

Crossing my fingers for Europe....

Posted by Jeff at June 16, 2005 06:07 AM


"and there are differences between Eastern and Western Europe. " that has to be a qualifier for understatement of the year.

Imagine trying to compare the USA with say, Bolivia and you have some idea of the gulf between east and western Europe.

The problem with a federal/unified Europe is essentially one of the lowest common denomintaor.

It may surprise you to know Jeff, that given the choice between the UK (Britain) having closer ties to Europe OR the USA, I'll pick the Evil Emp... I mean, the USA every time.

Posted by: kenny at June 16, 2005 09:33 AM

The European Union Population continues to Grow fueled by Immigration and in Certain European Countries such as France the natural birth rate is slightly above the natural death rate so their native population is still growing.
Projection indicate that the E.U. population will continue to grow until 2025 and then very slowly decline.
Europe already has over 800 million people (E.U. will have 500 million after 2007 enlargement)compared to 300 million in the U.S., why would they want to keep adding more and more people?
The European Union has created more jobs since 1997 then the U.S. and recently the Job Growth has increased further.
From 1997 to 2002,the European Union(15)added 11.5 million new jobs!
So around 2 million new jobs yearly on average are being created in the E.U. and in 2006 new jobs creation will total over 3 million!
So If we have 1997-2006 we come up with a figure of 20 million new jobs!
E.U. Exports total 2 trillion yearly and rising!(Merchandise and Services)This is by far the largest exporter in the world!
The E.U. has over 34 million manufacturing jobs compared to 14 million in the U.S.
The E.U. as a whole has lower buget deficits than the U.S., around 2% for 2006.
Take Britain out of the E.U. and they have a Current account surplus with Germany having the world's largest trade surplus.
I see no signs of Europe Declining!

Posted by: thomas riccardo at October 19, 2006 08:30 AM

America's legacy lies in its European roots. Without true Europeans at the helm of their own country, America may find itself without a family in this world.

Middle class America dominates the working class of this country. Taxes & general living expenses are high here too, but, this has never stopped Americans from having children. Even the poor have children & somehow find the means to feed & clothe their children. Life is not a picnic anywhere on this earth & life with children does not mean we should be entitled to live as the once aristocratic class did.

Europe is NOT any different & the prices of things, are compatible, with the exception of gasoline. Americans are finally feeling the bite in the prices of gas, something Europeans have had for decades.

So, what is stopping young Europeans from reproducing, ...sterility or, are most of the women in Europe on birth control, or is it the money it requires to take the typical month long European vacation, or the many government subsidized payouts for medical attention or unemployment? I'm curious, do tell.

I don't know any Americans that take a month long vacation, unless you are part of the 1% SUPER rich population of this country & that may be compatible to the once lived kings of Europe. First, employers in the US would never allow it. Are you kidding? Second, I cannot imagine America closing down for a month to take it easy. Who wouldn't enjoy that priviledge? If Americans had a month off for vacation, our population would double every year! Anyway, children are deductions on our income taxes here in the US & I'm willing to bet it is the same in Europe.

Posted by: Nancye at May 24, 2008 01:27 PM

Immigrants from Mexico, Central & South America make up the largest number of immigrants in the US (est. 12-20 million) and tend to have a much higher birth rate than the average North American. If you took these immigrants out of the equation, the US birth rate would be just about the same as Europe's.

Posted by: jbkinhouston at June 15, 2008 03:04 PM

Europe is a Powerhouse with some Countries stronger then others of course but Western Europe has a standard of living that is very high especially many of the Euro-zone Countries and Sweden, Norway,Denmark,Switerland.
Having lived in Germany I will speak about my Experience.
Most Germans recieve a Tuition Free Higher Education and If one is from a Poorer family the can also Recieve up to 600 Euros Monthly for Living costs, a 200 monthly Student Apartment with electricity, Internet and Heating Included, Cheap or Free Bus and Subway Transportation along with the fact most Germans can attend more then 1 University if they chose which is a Freedom most other people in the USA can dream of. Also When a student is ready for their Practicum in many cases they will study for 1 year in a foreign country Tuition Free with University Locations around the World-excluding the USA.
They also have Vocational/Technical Training System which is Free and is a Private/Public Partnership where the student goes part time to School and then works part time at the company learning their trade tuition free and are paid a salary as they learn.
If one loses their job they can receive Unemployment for 18 months in Germany at 70% of wage. If one still does not have a job the Individual can apply for Welfare which would amount to about $1000.00 US dollars monthly plus free Health Insurance. Most of these people also work underneath the table while collecting and actually if you work 20 Hours or less a week your legally allowed to Draw Unemployment or Welfare has you work Part-time because in Germany anyone who works less then 20 hours a week is considered unemployed.
40% of the Official Unemployed Germans are working part-time officially while receiving Benefits.
Health Insurance is Universal and in many cases Dental is also Included or is very cheap.
They even have spas where the sick can go with a Doctors note-Free while the Recover from their Illness.
Most Germans Receive paid Sickdays and if one becomes ill while working with a doctors note the Company must let them take a medical Leave while they recover up to one year.
The State Provides many free Childcare spots or if not free Cheap.
Children or their Parent Receive tax breaks or allowances yearly up to adulthood from the tax authority.
If you work away from where you live Driving allowances are also given to help pay for gas and while on the subject most German Cars use Diesel Fuel Now and it is not uncommon for their cars to get 50 mpg or more and these are mid-size cars such as the Volkswagon 4 door Family car for example so even the Gasoline prices are misleading.
Guess what they do with the excess Gasoline from their Refineries? They sell it to the USA!
Most Electricity Bill Average about 50 Euros Monthly in Essen Germany anyway and you can find flats to rent for $350 Euros monthly with Heat included!
They are also the World Leaders in The Renewable Energy, Sustainable Development Economy and Continue to push the Envelope. They are also world leaders in Basic Research in almost all areas now along with the EU.
If you go out to the Countryside away from the Cities one can also find affordable houses if one wishes.
Germany Has World Class Autobahns, High Speed Trains, Airports and Subways so the Infrustructure on average is better then in the USA.
Germans Receive about 5 weeks vacation but if you include all the Holidays and so forth they get about 50 weekdays a year off.
THey work about 1500 hours a year on average.
Many belong to Unions or Work Councils so their voices are heard. Germany has the Second Highest Wages and Benefits in the world after Switzerland and this is including Taxes and Cost of living-Mercer Survey 2006 International Placement Services.
Germany has 10 times less people in prison then the USA per Capita and 4 times less Murders per Capita versus the USA.
Germany is the world's largest Exporter and one of the largest investors along with Japan owning assets around the Globe.
Germany is the Center of Europe and along with France it's leaders Politically, Economically and Militarily.
When I went shopping in Essen Germany many of the products in their stores are cheaper then in Florida where I live now even with the Vat-tax included, sometimes alot cheaper, milk for example would cost $2.20 a gallon even though they use liters I'm converting. In Florida now it is near $4.00 a Gallon and this went for many things.
THis is why the Euro is $1.44 to the US DOllar, they have a higher standard of living, much less overall debt and lower inflation. Not no place on the Earth is perfect but they do have a very High Social, Environmental and Economic Standard along with some other countries in Europe and elsewhere.
They have less Children also because that is a choice they make. It is a Cultural thing and not unusual.
The more advanced a country becomes Economically, Socially,etc the lower the Birthrate and this has been observed in all countries that reach a very high standard of living.
When the USA was at it's peak the Birthrate was also declining but over the past 25 years or so as the standard declined here, the Birthrate Increased once again.
The US Average Life Expectancy is ranked 45th in the world and declining which helps make my Point.
The US has 60 Trillion dollars in debts and this is increasing at an alarming rate.
Highest Incarcertion Rates, a Bad educational System, Sky-high College Tuition, Sky-high Healthcare costs, etc,etc,etc.
Americans are kept in the dark on most matters, the media owned by a few rich people which cuts off the real information.
What Else can be said?

Posted by: Thomas at June 2, 2009 05:31 PM

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