Does the latest Euro bail-out scheme have any hope of succeeding? Not if it depends on Europe growing out of its debts. Populations that are growing old and dying do not vibrant economies make. None of the European Union nations are reproducing at a rate fast enough to replace their existing populations. The population growth that is occurring is virtually entirely due to emigration, as the following chart indicates.
Data is culled from the CIA World Factbook:
|Country||Population||Debt/GDP||Deficit/GDP||Median Age||Fertility Rate*||Population Growth Rate||Per Capita Income(in $’s)|
*A fertility rate below 2.1 is considered below the level necessary to replace the existing population.
It’s not hard to see that when the population is growing slower than the public debt (i.e., the annual deficit as a percent of GDP is higher than the annual population growth rate), the per capita debt load increases, which is the case in every single EU country cited. (The US population growth just barely exceeds the annual deficit growth). Put the aging population—note Germany’s median age of nearly 45 years—together with the already heavy public debt burden, together with the meager fertility rate among a relatively well-off population. By what reckoning does anyone believe that rearranging a few accounts for Greece will induce the sort of robust growth necessary for the Euro zone to escape its fiscal mess?
Western capitalism appears to be on a long, uneven slide down. Along the way, there will be a great many more “voluntary” haircuts such as the EU forced upon Grecian debt holders, and any number of roundly cheered plans and solutions contrived by politicians to salve the hearts of their capitalist overlords. All will ultimately fail. Nothing but growth can save Western capitalism, and sustainable growth is not forthcoming without population growth. The seventh billion person was born sometime this past week, but undoubtedly to someone other than a Western capitalist. In a hundred years, maybe two, the Euro bonds and Treasuries being issued willy nilly in an attempt to forestall the inevitable will all have defaulted, and only the vestiges of the cultures and nations that propagated them will remain.
It is as true for the US, at least so far as its melted pot of European whites is concerned, as it is for the Europeans. Europe and the US will continue to exist, but the cultures and the people from which they sprang will be dead and buried. There might still be a Germany, but there will be very few, if any, Germans. It won’t be all bad. Once Germany accedes to the trash heaps of history, at least the pols and policies of the day will only be compared to Hitler by egghead history professors, instead of by every crackpot demagogue trying to gain in the polls. It won’t be such a bad thing when World War Two, which was neither a world war, nor the second of its type, is no longer considered the defining moment of human history.
European cum American capitalism that seemed poised to devour the earth, destroying in the process the ability of man to live in it, will itself wither and die, unable to survive without the prospect of growth. Trees never could grow to the sky, and neither could accumulations of capital, but the West spun its whole social fabric out of the fallacy, and ironically, the East copied the trick as soon as it was able. When the history of Western capitalism’s demise is written, the financial crisis of 2008 will be its first chapter, with the present Euro zone bailout warranting not more than a few paragraphs.