Re: The curse of Europe

["Hugh Whinfrey" <econ@xxxxxxxxxxxx>]

Warren notes:

> Yes, the apolitical course of action is to move all the preexisting public
> debt
> up from the national level to the new federal level, and let the members start
> 'clean.'
> The markets will provide the fiscal discipline for the national govts as they
> are
> now credit sensitive entities, and countercyclical fiscal policy can originate
> at the new federal level.

I'm grasping this to be by and large an analogue of the
way the US works. I have trouble seeing how this
wouldn't generate/require moves towards direct
'federal level' taxation as well as stronger 'federal'
legislative participation in the decision-making. Both
of which really involve advocacy of a tighter political union.

One of the drawbacks of a tighter political
union is that it concentrates too much power
in places where the risk of an abuse of that
power is above a threshold which many folks
would consider to be acceptable. Gambling
with the survival of one's culture, language, etc,
gives a different set of tolerances than in the
US with its comparatively homogeneous culture
between the states.

Hugh