I'd argue that a lot of North American and European fiscal and social problems are routed in a reluctance/refusal to deal with the infrastructure problems that exist there. Whether it's bridges at border crossings and on highways, stupid expectations as to the life of road and highway surfaces, design standards for highways that were outdated when they were proposed, inadequate water and sewage collection, distribution and treatment systems, or housing. Consider the stupidity in Spain and Portugal where they were building at the rate of 2.5M homes/year when demand was about 400K - inevitably, the bubble was going to come crashing down.
But building appropriate infrastructure isn't enough. You also must maintain that infrastructure and that's where we've gone badly wrong. Appropriate fiscal support structures were put in place, and then almost immediately the politicians began robbing peter-to-pay-paul from those support structures. The US, Canada and Northern Europe went through similar boom periods of cement consumption in the late 1930's and for 20 years after WWII (as the Chinese and Arabs are now.) But because we've not kept up with population growth, we've now have a 2.5 hour drive (on a good day) from Brampton to Oshawa, ie: roughly 100 km or 80 miles across Toronto on Hwy 401.
Much of our societal problems are really the result of rather limited reasonably paying jobs for poorly educated people. The only way to break that cycle is to keep them productively employed for not one but two generations. (I'll avoid discussing what I think about stupid US and Canadian immigration policies that are compounding the problem.) We complain about waiting times for medical treatments here but if you actually look at what's happening, the problem is mostly elderly relatives of immigrants who were allowed in on compassionate grounds. Those people did nothing productive here so why should our countries' public support them in public facilities at public expense?)~ guest author, name withheld.
By David Stockman
15 May 2014
The thing to understand about China is that it is not just another booming EM economy that is momentarily struggling to cool-down its excesses in fixed asset investment and make a transition to some kind of more “normal “consumer-based economy. That comforting notion represents an odd-confluence of propaganda from the comrades in Beijing and hopium from Wall Street stock peddlers.
In fact, China is a grotesque economic aberration that bears no relationship to prior economic history or any conventional economic models-–not even to the export-mercantilism model originally developed by Japan, and which has now proven itself wholly unsustainable. Instead, China is a nation that has gone mad building,speculating and borrowing on the back of a credit bubble so monumental (and dangerously unstable) that its implications are resolutely ignored by observers deluded by the notion that China embodies a unique economic model called “red capitalism”.
But when a nation’s debt outstanding explodes from $1 trillion to $25 trillion in 14 years, that’s not capitalism, even if its red. What it represents is monetary madness driven by the state.