Tuesday, June 26, 2012

Comparison of Eurozone - America

The Eurozone crisis seems like the perfect time to consider some of the differences between it and the United States:

US

  • Central bank -- the Federal Reserve Bank -- goals are for "maximum employment, stable prices, and moderate long-term interest rates"'
  • Single currency;
  • Fiscal union that redistributes wealth, by way of stimulative investment and low-income / unemployed benefits;
  • States must balance budget, no lending facility outside of capital bonds (but shortfalls in state budgets may be partially deflected by the fiscal union);
  • Primacy of federal laws is immediate and absolute, even if contested and limitations delineated in a federal-level court (the Supreme Court of the United States);
  • Single, official, national language (English).

Eurozone


  • Central bank -- the European Central Ban -- goal is to "maintain price stability"
  • Single currency;
  • No fiscal union;
  • Member states don't need to balance budgets as long as they can access long-term bond markets, but have signed the Maastricht Treaty whereby they agreed to limit deficits to 3% of GDP and debt to 60% of GDP;
  • European Union-level laws hold primacy, but sovereignty rights creates conflict in cases of member states' Constitution;
  • Multiple official languages.


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