ITALIA ITALIA..AHHHH POVERA ITALIA
ANALISI MOLTO INTERESSANTE E IMPLACABILE PROPOSTA DAL SOLITO ZERO HEDGE SULLA FINE ECONOMICA CERTA DELL'ITALIACLICCA QUI DI SEGUITO PER LEGGERLA
It is therefore perhaps useful to consider a more advanced case of
this Keynesian debauch from elsewhere in the world. Consider Italy.
Despite all the arm-waving about the fact that the ECB has not gone to
outright QE, there can be no doubt that money and debt in Europe have
been flowing freely since the late 1990s and the official launch of the
Euro. And as might well be expected, dramatically cheaper carry costs on
the public debt have not helped Italy overcome its post-war propensity
for outsized national debt.
As shown below, Italy’s public debt now stands at a debilitating 135%
of GDP, representing what amounts to an incremental debt burden of more
than $500 billion just since the year 2000 when public debt first
crossed the 100% of GDP threshold.
Needless to say, massive fiscal stimulus and the ECBs ultra-low
interest rates for most of this past 14 years have not produced the
promised growth and prosperity. In fact, Italy’s macro-economy
has plunged into a shocking secular decline. Real household consumption,
for example, has now retraced all the way back to 1998 levels.
The same pattern is evident in Italy’s overall GDP trends—-their
flawed basis which counts government spending as “growth” not
withstanding. Since 2005, Italy’s GDP has spent nearly as many quarters
in negative territory as in positive. Consequently, its actual level of
real GDP has now lapsed back to levels reached 14 years ago.
Put in broader historical perspective, and straining out the
short-term noise, Italy’s 10-year moving average real GDP growth trend
tells the true story. After 14 years of unprecedented debt
expansion and cheap ECB finance, Italy’s rolling GDP growth trend has
plunged from 4% to negative 0.5% in the most recent observation. Yet
there has never been a hint in the Keynesian playbook
that actual secular shrinkage of this stunning magnitude is
even possible.
Add to that Italy’s negative demographics and you have an absolute
and irremediable debt trap. Were George W. Bush an economist, he might
even aver that “this sucker is going down”.
Delay the work force demographics for a decade or two and you
have a sobering projection of where our politicians and Keynesian money
printers are taking the US economy. And that destination is most
definitely not the land of permanent full-employment prosperity that is
embedded in today’s mainstream narrative.
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