Mads Jacobsen — Denmark cuts welfare but buys new US fighter jets

In May 2016, the Danish government decided to make the largest weapons purchase in Denmark's history by ordering 27 new, American produced, Lockheed Martin F-35A Joint Strike Fighters at the cost of $3 billion, with the total cost for the lifespan of these fighters amounting to approximately $8,5 billion. Not even calculated in these expenses are the costs for bombs, ammunition and the aid for repairs following a bombing campaign.

The money for this purchase is, of course, covered by the tax revenue from the Danish people, meaning that instead of welfare, social services and other public goods, we get expensive military modernization. So, what do the Danes themselves think about this? Well, According to a recent poll made by Wilke, 53,3 percent of the Danish population believe that this purchase is a bad idea; 30.8 percent believe it is a good idea; and 15.9 are uncertain. Furthermore, on May 27th, nationwide demonstrations were held in Denmark with the message: "No thank you to new fighter jets!", and instead "put peace on the agenda, stop Danish war involvement and use the billions for welfare, peacemaking and useful workplaces".

Military expenditure crowding out domestic welfare.

Katehon

Mads Jacobsen: Denmark cuts welfare but buys new US fighter jets

Lars P. Syll — Denmark’s euro problem [Paul Krugman]

Paul Krugman quote.

And the US is imposing austerity on itself with predictable results by pretending that it is still on the gold standard.

Lars P. Syll’s Blog
Denmark’s euro problem
Lars P. Syll | Professor, Malmo University

Tyler Durden — NATO Launches "Wide-Scale" War Games Near Russian Border, Creates "Line Of Troops"

Slouching toward nuclear war.

“I don’t think that Danes fully understand the consequence if Denmark joins the American-led missile defence shield. If they do, then Danish warships will be targets for Russian nuclear missiles,” said Mikhail Vanin, the Russian ambassador to Denmark, to the Jyllands-Posten newspaper.

“Denmark would be part of the threat against Russia. It would be less peaceful and relations with Russia will suffer. It is, of course, your own decision - I just want to remind you that your finances and security will suffer. At the same time Russia has missiles that certainly can penetrate the future global missile defence system,” Mr Vanin said.

Zero Hedge
NATO Launches "Wide-Scale" War Games Near Russian Border, Creates "Line Of Troops"

Tyler Durden

Bill Mitchell — Denmark should abandon its euro peg

In my soon-to-be-published book on the Eurozone I examined the case of Denmark in some detail in the context of the evolution of the European Monetary System, the European Exchange Rate Mechanism (ERM), and the ratification process of the Treaty of Maastricht. Denmark was a participant in all the attempts to maintain fixed exchange rates after the Bretton Woods system collapsed in 1971. Further, while Denmark did not formally enter the monetary union by adopting the euro that doesn’t mean that they have maintained their currency independence. They chose instead to peg the Danish kroner against the euro (effectively continuing the ERM parities), which immediately meant that its central bank had to follow ECB monetary policy. Fiscal policy then became a passive player to ensure it didn’t exacerbate the peg parity and Denmark also bought into the Stability and Growth Pact fiscal rules. This meant that internal devaluation (wage cutting) was the only real counter-stabilisation option available to them when facing external imbalances and domestic recession. It hasn’t worked well as one would expect. In fact, the euro peg works against the interests of the Danish people, particularly low income workers prone to unemployment. Yet the nation has an obsession with maintaining it. Groupthink abounds. The correct policy strategy which would give the Danish government a wider range of policy tools to enhance the well-being of its people would be for Denmark to abandon its euro peg. It should do that virtually immediately.…

The post contains a history of currency unions in Europe and why the euro is another failed experiment.

Bill Mitchell – billy blog
Denmark should abandon its euro peg
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia