Having just returned from the little town within stone's throw of where the Fuerstenbergers live, I have to say that if there was economic stress or foreclosure or bankruptcy or poverty or unemployment or general unhappiness, doom and gloom, I did not see it.

In Europe, social safety net softens the slump - Europe- msnbc.com

 

Their recession is just as tough as ours, the "safety net" is paid for by an almost 70% higher effective tax rate on average.
The wedge is an average, upper earners pay MUCH higher rates, it is now about 50-60% for higher earners in the UK.


UK

The total tax wedge is 29.7% for the average wage earner




Denmark

The total tax wedge is 44.2% for the average wage earner




Germany

The total tax wedge is 50.7% for the average wage earner

(double *ouch*)


France

The total tax wedge is 48.3% for the average wage earner


US

The total tax wedge is 30.0% for the average wage earner

 

I've been in Frankfurt for the past few stays staying at the Westin Grand. There are plenty of beggars / homeless along the walking streets between here and the train station. Most are passive - they sit with a cup and beg. Others will come right up to you and ask for money.

 

Being married to a German small business owner (Independant insurance broker) I can say that the German Social system is NOT better. To pay for all the wonderful "benefits" the taxes are out of control. My wife pays over 50% of her income alone on taxes, then pays 19% sales tax on everything she buys. The people who are out of work still need to survive but everything around them is taxed to the hilt.

To get the benefits there is a complex process burocracy to navigate and then in some states the social benefits are seen as income and are taxed further. Once individuals get comfortable with their social-economic standing it doesn't make sense to work harder to earn more and be more succesful because you quickly increase your tax bracket and the effort you put into a higher income doesn't justify the post tax reward.

My wifes second cousin has been out of work for a long time and the culture here prevents people from easilly switching fields of work. OJT is limited so if someone is unemployed they either stay unemployed or spend money that they don't have to go to a school just to learn enough to start an apprenticeship. If you think your company might be in trouble and you find a better employment offer somewhere else you can't take it because you need to give your current employer three months notice before you quit.

As for health care, unless you earn more then a specific amount, you are stuck in the government health care system. The government pays less then private insurance so those on government insurance get fewer options for treatment and get pushed to the back of the line.

I'm done with my rant. Bottom line is that Socialism doesn't work. It takes more taxes to fund more programs. Those programs need government workers to manage them so you need to tax your citizens more. Higher taxes on buisnesses and the individuals running those buisneses prevent expansion and further economic growth and even leads to layoffs and a weak economy. Then the socialists institue a new program to fix the new economic problem and the cycle starts again.

Save your money for when times are tough and trust that capitalism will always make a solid recovery. Less government is good for us all.

 

EU calls for shorter work week to create jobs

May 7 02:22 PM US/Eastern


EU leaders on Thursday called for a shorter working week and extra state-funded retraining programmes as recession threatens millions of jobs.
However, the results of a special EU meeting on the continent's labour crisis failed to impress union leaders who are increasingly concerned about mass lay-offs.

With the recession expected to wipe out 8.5 million European jobs over two years, top officials from the Czech Republic, Sweden and Spain -- the current and future EU presidencies -- agreed to focus on identifying job opportunities, upgrading skills and encouraging labour mobility.


"We haven't signed up to those conclusions. They are not enough, it's very general," John Monks, secretary general of the European Trade Union Confederation, told AFP.

The talks also revealed more philosphical rifts as the free-market friendly approach of Czech Prime Minister Mirek Topolanek and Sweden's Fredrik Reinfeldt clashed with calls for a social market economy from European Commission chief Jose Manuel Barroso.

"We all agree on the goals, but we may not always agree on the means," Topolanek, whose country currently holds the EU presidency, said.

In one of the more specific conclusions, the EU said in a statement that member states should "maintain as many people as possible in jobs, with temporary adjustment of working hours combined with retraining and supported by public funding."

While EU Labour Commissioner Vladimir Spidla told AFP the measure was "reasonable and efficient," his compatriot Topolanek warned against excessive public spending and protectionism.

"The EU should work with the idea of an active individual, not a paternalist state that will take care of everything at the cost of debts and higher taxes," he said.

"We have to work through businesses and employees to try to develop our welfare model and create an atmosphere conducive to investment and jobs," added Reinfeldt, whose country will take the EU presidency on July 1.

The meeting proposed stepping up training for young unemployed, less red tape and more encouragement for people to move to where jobs can be found.

Barroso highlighted the "changing social situation" and added "there can be no economic recovery on the foundations of social collapse just as there can be no social progress in an economic desert."

The "troika" style meeting was a much-reduced version of the full-scale EU jobs summit with all 27 heads of state and government that the Czech Republic had envisaged.

Union leaders said the shrunken attendance was a sign of a lack of interest.

"It's a pity it's not the major social summit which we would have preferred," said Wanja Lundby-Wedin, European Trade Union Confederation president.

However Spanish Labour Minister Celestino Corbacho declared that "this is the first time during the crisis that we are going to deal specifically with the issue of unemployment."

Jean-Claude Juncker, the Luxembourg prime minister and chairman of the Eurogroup of finance ministers, warned recently that the EU faced a "social crisis" if EU leaders failed to respond to the economic slump and job cuts.

Lamenting that the summit had been downgraded, Juncker said: "Even if you don't have any ideas at this stage, that doesn't mean you should not get down to tackling the problem."

The European Commission forecast on Monday that Europe was set to see unemployment rise to the highest levels since World War II with 8.5 million Europeans expected to lose their jobs in 2009 and 2010.

 

maybe the Hong Kong model:

Hong Kong information on economic freedom | Facts, data, analysis, charts and more