Hi Michael,



Well said on all counts!



It's my contention that Europe's growth is being choked-off by high government debt that accrued over many decades due to fiscal irresponsibility.



I consider any debt-to-GDP ratio over 75% to be irresponsible, in any country that isn't enjoying robust growth



High debt loads up to 75% of GDP are fine (even welcomed) in rapidly growing economies that run surpluses every year.



My statement applies even if those surpluses (that are based on maintaining basic government services) are then spent on stimulus during recessionary years (only) with a return to unspent surpluses during growth years. At which point, half of each surplus should be spent on paying down government debt.



If the EU ever 'dies' it's epitaph will read: "Debt killed the EU."



Your statement rings so true: "Sovereign debt levels, meanwhile, have approached or exceeded 100% of GDP (Italy’s is now at 135%), while both inflation and real growth – and thus nominal growth – remain low. This lingering debt overhang is limiting the ability to use fiscal measures to help restore robust growth." -- Michael Spence



1) Removing impediments to foreign investment could break European nations free from 10 more years of sluggish growth and save incumbent politicians from their increasingly restive voters.



2) A 20-year legislated and mandatory plan for each EU country to paydown their debt-to-GDP levels to 75% will increase growth and put governments in a powerful position to address the next recession via generous stimulus programme spending at the onset of such downturns.



3) A special focus on economically empowering those left behind by globalization, will return (probably) 12 euros for each 1 euro spent on GBI by governments.



A Guaranteed Basic Income of 1088 euros per month for each adult who reports less than 13,056 euros on their yearly income tax return will make every local shopkeeper, landlord, and transit system operator sing praises to the Guaranteed Basic Income!



For people in the bottom quintile, every single euro will be spent in the local economy, and in the most efficient manner -- FAR, FAR, more efficiently than if the government spent the same amount of money.



4) Each EU government should add .5% of GDP to their defense spending to hire anyone (especially young people wanting to earn money for college) who wants a job -- for the express purpose of infrastructure construction and maintenance.



Rather than paying unemployment insurance benefits to millions of EU citizens, governments could be spending the same to rebuild their deteriorated infrastructure and to build new infrastructure, and taxing those workers on their earnings, while local governments collect sales taxes on their spending. A quadruple-win!



Initiating these 4 simple steps, would mean nothing less than changing the entire narrative in the EU -- and would result in a new economic boom similar to that seen in Europe during the 1980's and 1990's.



Failure to act decisively now, means ever EU country will exit the EU (whether that fixes the problems, or not, voters WILL have their say -- as we have seen) and Europe will be the weaker for it.

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I'll be re-reading your poignant essay many times, Michael. Thank you for writing with such knowledge and clarity.



As always, very best regards, JBS





































