Fernando Jiménez

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What can a country do when his unemployment rate reaches the 27%?

Spain has reached the 27% of unemployment rate, the goberment have done importante modifications in the work market, made it more flexible, added to others legal regulations, but nothing seem to be effective.

What should do we do to stimulate our work market?

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    May 7 2013: You probably won't believe me.

    But shrink government.

    Cut out ALL subsidies.

    Get rid of all "green" regulations, especially subsidies for energy production.

    Ger rid of most regulations especially if you have a minimum wage, that means the minimum wage is now ZERO.

    If there are any tariffs (not sure how that works in Europe) get rid of them

    If there are any make work programs get rid of them

    Make all schools voucher schools

    Cut whatever time your legislature is in session in half or a fourth (they are the cause of your problems, the less of them the better)

    Make ALL taxes a VAT and that means there are NO other taxes

    At any rate cut the taxes way down if it is not a critical government service get rid of it. Truthfully this means every one of them.

    Start a remedial course in economics in place of all TV programs 2 times a week.

    Anyone who does not demonstrate a minimum competency in economics will be barred from voting in an election unless they own land in Spain.

    This is my prescription as you have had a severe case of socialism in your country, fortunately the antibiotic I have prescribed will wipe it out in less than a year.

    Get all of that done and check back with me
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    May 8 2013: Get rid of the Euro and return to the Peseta so you can devalue it to allow competative exporting of goods. As a country you will need to be food self reliant as imports will be expensive, but it would attract overseas investment in manufacturing as your devalued currency would make labour cheaper.
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    May 7 2013: The PP is a revision of Franco's regime. Take a look around and see if that is really the way you want to go. The current government is responsible and irresponsible ... the changes being made will not solve the problems. Big government is there and will go into a protective mode. Cancelling the social programs that are dragging you down would cost votes and will not happen.

    If you have not read Pat Gilberts reply do so ... if you have read it again.

    We are facing the same leadership problems in the USA and our unemployment rate is somewhere between 17 and 20+ percent depending on how you use the numbers. the 7% used by the administration is a joke and demonstrates the use of numbers being used for political purposes.

    I urge you to read the differences in economic theories. (Austrian and Keynesian). Then look at the choices made and the consequences. Be fair and look at the what if on both sides.

    By the way did Spain ever recover the billions the PP had in Swiss and American accounts and were paying out to bribe officials?

    Good luck. Bob. PS: Just a note. There is no way to get out of this without so very harsh decisions and hard times in the transition.
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    May 7 2013: shouldn't we first ask the question, why do we have unemployment? according to the keynesian model, unemployment means the economy under-utilizes resources, and the solution would be government spending out of debt or inflation, preferably both. how is that remedy working? you have debt more than enough, and the euro-inflation is not negligible either. the US tries the same unchained by eu bureaucrats. how is that working for them? not very.

    another theory blames it on government regulations, especially high taxes, red tape, minimum wage and the so called "regime uncertainty". ask anyone owning a small business why he is not expanding, and the answer will quite convincingly overlap with this analysis.
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    May 8 2013: Unfortunately you need to make it easier to lose people in order to make it easier to take them on. So labour market and public sector reform is needed. But Spain also needs an investment strategy, where will its future competitiveness come from? How can government support or enable new industries. Most start-up communities have had some kind of subsidy in the beginning, Israel's successful tech community is a good example. Even silicon valley had subsidy, in the form of access to the R&D produced by the military using government money over the previous decades. The trouble with these debates is that most commentary is simply left or right. The answers lie in practical solutions drawn from both that have been shown to work in the past. Labour market and public sector reform, and investing in new industries in which Spain has some advantage such as an educated work force, are two. Admittedly state engagement in enabling investment is an area with a mixed record, but only applying painful measures without positive approaches risks stagnation, as well as being political suicide.
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      May 8 2013: Im so agree with your point of view, it´s not a philosophical problem between right or left, its a social problem we must solve.

      We have some strengths, weather, food, beaches, task force, innovative people, but we need a new locomotive to create jobs. Of course we have to reform our public sector, so big, so inefficient, so expensive, and develop a new investment strategy, but how long should it take to make take effects this measures?, do we have it?
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      May 8 2013: to start a little farther, as a kid i always found weird that in sci-fi novels, planets has a certain kind of people, one single society, and very distinct characteristics. however, on earth we have hundreds of countries, thousands of cities each. each city have many different parts, and this great diversity goes down to neighborhood or street level. problems at a certain location are not even known 5km away. genius loci is legion.

      so what could be the proposed investment strategy of spain, that would enable its future competitiveness? why would spain as an entity has competitiveness in any area? why spain exists at all on economic level? why would it exist? the entire notion that a country has something like a "profile", or it should have, is mindblowingly simplistic. such a country level strategy can only hurt the majority of the people. all those that are outside of the areas selected by the bureaucrat committee. sadly, this is exactly what happens from time to time.

      in reality, spain does not have comparative advantage in anything. companies have. people have. regions have.
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    May 8 2013: Thanks to all for your ideas, are very interesting. One question is who are responsable of the unemployment, the jobless people, the goverment, the policy of the companies, the country. And who have to solve the problem?
  • May 8 2013: The Bankers put you in this position.
    Give them a choice. To the high cliff. or ....

    Sure, it's mob rule, but what should they expect.
    The longer you diddle around, the longer you suffer.
    Take 2 Aspirins and call me in the morning.
  • May 8 2013: Darn government regulations We cut down on that in Texas When you blow people up they are no longer unemployed.
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      May 8 2013: That is morbid
      • May 8 2013: Thanks Pat - I keep feeling ill when I watch the news about West. I hope it's provacative. I don't mean to hurt anyone's feelings If I had, you would have hit another button, I just meant to get everyone thinking outside the box. I don't want to lecture another country as we Americans don't look as good as we did in other times. Just suppose if Washington, Franklin, Hamilton, Adams, Jefferson, Burr, et al had been leading a real country? Maybe the point is so many genuses among only 1 or 2 million Americans. What went wrong? Maybe we can all do better by using our heads to think and work together.
    • May 8 2013: george, it takes a Texan to get it right.

      The system of Commerce is screwed up by Bankers.
      There is no problem that could not be solved, except for the Bankers.
      The FED today is bigger than our Government. More Powerful.

      A rape of America happened in 2007-2008-2009, and the money
      still dribbles out as fast as the FED can print it. The FED is our
      CENTRAL BANK. A private Corporation that has stolen us all blind
      since it's creation.
  • May 7 2013: May I have one suggestion explained below.
    To borrow more money by issuing government bond to be used to stimulate the economy is a no-no.. But you must increase the PRODUCTIVITY AND CONSUMPTION TO JACK UP THE BUSINESSES AND MANUFACTURING IN ORDER TO INCREASE THE EMPLOYMENT. To do that you may use the tactics by Argentinian President Mrs. Kirchner by borrowing from the workers (including the government workers) to invest in new or expansion of manufacturers or businesses which will reduce the imports of goods from other countries because of the loss of competition from foreign countries.
    The procedure of the "borrow and invest" should be different than the Argentinian government by raiding the money, gut rather exchange the reserve for the pension funds to convert directly or indirectly ito be the equivalent of the shares of stocks in the expanding or new industries. Any dividend yields will be paid to the pension plan or to the individual shareholders (workers). The government will manage the expansion or establishing the new industries/ businesses and training the unemployed to fill the needs of the new/expanded production. This scheme will eventually increase the consumption thus stimulate the economy as a whole. It is also a better strategy than higher taxes. But to make sure the new industries will survive the international competition, the wage scale and the retirement benefit must be modified similar to the austerity measures. But the suffering should be more tolerable because there would be less unemployment with a somewhat better economic conditions.
    This is very similar to a negotiated pact between an industrial company and its workers by letting the workers being the shareholders as well, only the "management would be the goverment for the whole set up.
  • May 7 2013: Most jobs are in existence for the generation and circulation of money
    So unemployment is not the problem, money is. Let's study the real issue
    So cut back, until money just becomes obsolete.
    What is money anyway? Who invented this dumb idea and why?
    Become more self sufficient, everyone grow your own plants (veggies, herbs, spices, fruits., med plants, etc)
    There's your food, meds, hygiene, and cleaning products right there. FOR FREE, and made by you so you know exactly what's in it.
    Make natural energy mandatory for all businesses and homes.
    Your schools are free right? They should be. This will really test what teachers are there for the love of teaching and who's there for the money.
    Start bartering with other people, build a network.
    This also does a better weeding out of the doers and the moochers. And well, you can't feel sorry for them anymore if money is no longer the issue, now they'e just being lazy.
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    May 7 2013: Make short-term sacrifices in revenue by remodeling your tax structure to attract industries from around the world to come and grow in a perfect climate with a plentiful and skilled workforce and very attractive tax incentives. Viva Espana!