It is my understanding that one reason Great Britain is not using the Euro is that it has a stronger economy than the rest of Europe and does not want to subsidize other, weaker economies.
California is (one of several) states who is subsidizing New Mexico (and several other states), according to the Tax Foundation report:
http://www.taxfoundation.org/files/sr139.pdf
Is this an accurate analogy and if not, why not?
If the situations are analogous, does that mean England should join the EU and use the Euro, California should demand to pay less taxes, or what?
Originally posted by AThousandYoungThe two situations are not anywhere near analogous. California and New Mexico are part of the same Nation. Britain shouldn't join the Euro because that currency is used by multiple sovereign nations. It would put Britains currency value at risk of falling victim to bad governance elsewhere in Europe. Plus, yes, Britain could well get stuck subsidizing other Nations.
It is my understanding that one reason Great Britain is not using the Euro is that it has a stronger economy than the rest of Europe and does not want to subsidize other, weaker economies.
California is (one of several) states who is subsidizing New Mexico (and several other states), according to the Tax Foundation report:
http://www.taxfoundati ...[text shortened]... ngland should join the EU and use the Euro, California should demand to pay less taxes, or what?
Originally posted by AThousandYoungthey chose it ...
It is my understanding that one reason Great Britain is not using the Euro is that it has a stronger economy than the rest of Europe and does not want to subsidize other, weaker economies.
California is (one of several) states who is subsidizing New Mexico (and several other states), according to the Tax Foundation report:
http://www.taxfoundati ...[text shortened]... ngland should join the EU and use the Euro, California should demand to pay less taxes, or what?
"Ironically, most of these
high-paying states are the so-called blue states
that have generally elected politicians who support
a more steeply progressive tax system even
though their own constituents bear a greater
share of the burden as the code gets more progressive."
hmmm, you'd think they'd exclude Social Security from the tallies. that's money that's being paid back to the people that earned it. mostly.
"Some federal spending patterns are easily
discernible. The large number of retirees collecting
Social Security in Florida increases the
flow of federal “retirement and disability”
funds somewhat."
Originally posted by AThousandYoungWhat do EU subsidies have to do with the Euro?
It is my understanding that one reason Great Britain is not using the Euro is that it has a stronger economy than the rest of Europe and does not want to subsidize other, weaker economies.
How does the UK subsidize other countries more by joining the Euro?
Something's not right about your argument.
Originally posted by zeeblebotThat is to say 6 bucks and change goes INTO DC and 1 dollar goes back out to the treasury.
hmm, Washington D.C's ratio is 332% higher than New Mexico's.
One interesting thing I saw, only 16 states have a positive outflow to the treasury, all the rest suck more out of the treasury than they put in, even if it's almost even like where I live in Pennsylvania, at 1.06 coming in for every 1.00 going out. That's not bad compared to DC for instance.
Originally posted by Palynka2.5. Will the UK need to devalue in order to join the euro?
What do EU subsidies have to do with the Euro?
How does the UK subsidize other countries more by joining the Euro?
Something's not right about your argument.
Very probably. Indeed, although sterling's level is not one of the five tests as such, it seems that the level will have to play an important part in the decision. There are suggestions that there would need to be a fall of about 30% against the euro. Though there would also be a fall against the dollar (in which most commodities are priced). There would then be a risk of inflation, and we would not be able to use interest rates as a corrective, unless by chance the EU bank thought that what was necessary to correct our particular situation was also suitable for the rest of the euro zone. The best situation would be for the euro to strengthen while the pound retains its value against foreign currencies. If the fall in sterling took place prior to joining, the necessary measures to deal with the resulting inflation would move Britain further away from the euro zone average.
http://www.psr.keele.ac.uk/docs/efaq.htm#probs
Does that help clarify what I am trying to say?
- Joined
- 27 Apr 03
- Moves
- 29108
Also the European Bank at Frankfurt has failed to censure those countries that have failed to keep their public spending/debt ratio to within the set limits of GDP. No names, but the usual suspects.
Interest rates are now set independently of government, one of the first Blair/Brown measures passed upon taking office in 1997, so it's debatable whether the Exchequer could still even possess this string to their bow anymore.
Also Palynka asked what do EU subsidies have to do with the euro.
Gresham's Law. If the euro's worth is based upon a false prospectus where investors lose faith in its worth because the EU is overspending, through the monstrous waste of the Common Agricultural Policy within the eurozone the inevitable corrective will hurt everybody in the EU regardless of whether their currency is th euro or not. The North Italian separatists have even mooted a relaunch of the lira were they to gain power.
Originally posted by AThousandYoungThat's a conjunctural argument not a structural one. He questions only if the time is right for joining the Euro not if the UK should join or not.
2.5. Will the UK need to devalue in order to join the euro?
Very probably. Indeed, although sterling's level is not one of the five tests as such, it seems that the level will have to play an important part in the decision. There are suggestions that there would need to be a fall of about 30% against the euro. Though there would also be a fall a ...[text shortened]... /www.psr.keele.ac.uk/docs/efaq.htm#probs
Does that help clarify what I am trying to say?
And even if the argument is that sterling had to depreciate (for which he provides no solid reason) that implies that its value is already too high. Not very consistent, I must say.
Besides, none of that has anything to do with any type of subsidies. So no, I don't see what you mean. (I'm not being pedantic, I really don't know...)
Most scenarios (join or not) are usually win-win or lose-lose, not win-lose. If its better for the EU doesn't mean its bad for the UK and vice-versa.
Originally posted by jatriusGresham's law has only application when coins have commodity value. Money has been fiduciary for a long time.
Also the European Bank at Frankfurt has failed to censure those countries that have failed to keep their public spending/debt ratio to within the set limits of GDP. No names, but the usual suspects.
Interest rates are now set independently of government, one of the first Blair/Brown measures passed upon taking office in 1997, so it's debatable whether the E ...[text shortened]... he North Italian separatists have even mooted a relaunch of the lira were they to gain power.
As for the 'monstrous waste' of the CAP and the 'inevitable' currency adjustment, I can only laugh. The discussion has been for some time now if the Euro becomes or not an international currency and if the dollar will fall or not. Of course this doesn't mean that both things will happen but catastrophic scenarions regarding a fall of the Euro due to economic reasons are ludicrous to say the least. If the Euro falls it will be simply because some countries decide politically to pull-out, not because of 'monstrous' wastes of European funds over-valuing it. The value of the Euro is only marginally influenced by the prices on agricultural goods and obviously even less by the impact of subsidies on thes prices.
If anything, the Euro has a lot of room to appreciate if that money is better spent on other economic policies. Even the quote of A1000Young considered that the sterling was over-valued.