Comments by "Paul Aiello" (@paul1979uk2000) on "Will the EU Stop the French Left from Borrowing More Money?" video.

The thing is with borrowing, it can be a good way to solve short term problems, but some countries use them to delay doing major reforms, Italy is known for that, Greece used to be as well. I think the rules on borrowing should be tied to reforms, because reforms are the thing that really kick-start the economy but can be sometimes difficult to implement, depending on the reforms, but borrowing to try and get out of a hole without the reforms is potentially digging a bigger hole long term. Regardless of what some might think of the EU rules when it comes to borrowing, they do make a lot of sense as lower debts are in the interest of everyone, but with that said, I do think there can be a bit more flexibility when it comes to borrowing, especially in emergencies, but reforms are always the key, and if reforms are done all the time, then the shock of them is much smaller on the people, whereas if a country leaves doing reforms and ends up needing to do big reforms, let's just say, the government in power isn't going to be very popular with the voters, so it's better to do reforms on a constant basis so they end up being much smaller on the impact and they don't pile up, that would also do wonders for the economy and potentially living standards if the right reforms are done. The sad thing is, because of the democratic process, you've got a system where governments are not in power for long and usually think in short term interest, in other words, they are more than willing to spend public money and borrow a lot, knowing they can past the burden onto the people and the next government, maybe stricter rules are needed in place to prevent governments from getting reckless, the EU kinda always has that but it needs to be more enforced, with a bit of flexibility depending on the circumstance. Also, don't get me wrong, I'm not against borrowing, in some circumstances, it's needed, but too many governments, use it as a mean to paper over the cracks in the economy, which only ends up delaying and making things worse over the long run, reforms are the key to staying competitive and getting the economy back on track, sometimes borrowing can help on that, but only with competent governments that have a long term plan to put in motion, but unfortunately, it's just too easy to borrow now and pass the burden on future governments and the people, which that Stability and Growth Pact from the EU is supposed to resolve but it only works if it's enforced. But seriously, countries that have had high debt, Japan, Italy, Greece, have not done that well economically because the debt is acting like a drag on the economy, so all countries are better off lowering debts as soon as possible. Also, countries need to stop trying their cake and eat it, the amount of times during elections where you hear them say they will promise tax cuts and more public spending is becoming a bit of a joke now, the only way to have both is with major reforms to the economy to boost growth, otherwise, the burden is being passed onto the people longer term and usually that is painful as it usually means austerity measures, it's all about the reforms, do the reforms to boost growth which then allows more spending and potentially lower taxes, whereas higher debts is just digging a bigger hole for the country, which there is a lot of evidence around the world that shows that.
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That really depends on the starting position of the economy, austerity measures are not really liked by governments or the people as they are painful, but if debt levels become sky-high, the options become very limited where spending cut becomes one of the few thing they can do, regardless of how painful it is, sometimes it's needed to be done. But really, reforms should be a constant thing with countries to boost economic growth and reduce the need for debts, that will likely reduce the odds of austerity measures being needed, it also helps to keep taxes low whiles allow for more public spending. High debts ends up being a major drag on the economy that is long term as Japan, Italy and Greece have shown.
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@hgu123454321 True and that creates a much bigger problem long term as we've seen with Japan, Italy and Greece. Nobody likes austerity measures, but what is the alternative if some governments get so reckless with spending that debts become sky-high? You end up in a situation where the debts end up being a major drag on the economy that can last for decades. Constant reforms of the economy are the only solution as that will boost economic growth, help to reduce debt levels, allow to keep taxes at a decent level and allow for more public spending, whereas debts can be fine as a short term fix, but too many are using it to paper over the cracks in the economy by not wanting to do the reforms needed, that just makes it a lot worse longer term which likely means tough austerity measures are needed to fix the problem. So as much as some don't like the EU's strict rules on debts, they do make a lot of sense, but I do agree some flexibility is needed on them, but I also think they need to be stricter in pulling down debt levels as that ends up becoming a major drag on the countries that have high debts, and if too many go that route, it ends up having a major drag on the EU economy, so basically decline.
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