The Dutch are not mean – no, they are notoriously wasteful and love debt, says Greg Shapiro.
All it took was one visit from Jacob Lew… The US Treasury Secretary was in Europe this week, arguing that we need more stimulus over here, and excessive budget cuts are counter-productive. Germany smiled and nodded and disagreed with him as loudly as possible.
But – just three days later – the Dutch flipped the script. The cabinet has now announced that they are cancelling the proposed budget cuts of €4.3 bn. Germany and Brussels can go stuff their rules. What’s going on here?
It’s been a looong winter. In my personal financial experience, we’re still waiting for the first quarter to end. April 1 is Tax Day. It’s meant to be a fresh, new start for Quarter 2. Unfortunately, we’re still waiting for so many old invoices to be paid that we can’t turn the corner. Everyone is short on cash. Personally, I’d agree with the US: more budget cuts would be even more painful.
And that’s when it’s time for me to play Devil’s Advocate to my own idea. Surely there must be something good about economic pain we’re feeling? Just as I was entertaining this notion, another headline popped into my inbox: Dutch households have the highest debt-to-income ratio in the eurozone. Of course, this is no surprise to me, since I’ve watched inflation rise (2nd highest in EU) as pay has stagnated.
But how can the Dutch have the highest debt-to-income ratio? Aren’t the Dutch famously stingy? And that’s where the budget-slashers may have a point: the Dutch are not nearly as stingy as they like to think. In fact, they can be wantonly wasteful.
I’ll use myself as an example of wasteful frivolity. Last week, I wrote about how my household carelessly threw away hundreds of euros on parking a car in Amsterdam. (The situation is now resolved, thank you.)
But we also just got a warning from the electric company that our meter readings have been off the charts in the last 12 months. This may have something to do with the fact that my children are not content unless they have at least 3 screens glowing at any given time.
And my Dutch co-workers keep throwing out my bread. ‘Where’s my bread.’ I’ll ask. ‘What bread? Oh, that rubbish from yesterday? I threw it in the garbage.’ No, if bread is kept at all, it must be kept at room temperature until it is Not-Quite-Fresh bread. And Not-Quite-Fresh bread must be thrown out.
And if you take the trouble to throw your breadcrumbs to the birds, they assume you must be Muslim. The front page of Het Parool recently stated that the amount of food disposed of by Amsterdam each day could feed a small city. (The fact that Amsterdam IS a small city proves that Parool really is Amsterdam’s newspaper).
Okay, Germany! You budget slashers have made your point. Maybe there is room for more efficiency and less waste. But shouldn’t we be able to increase our income a little as well? Can’t we compromise and find a 3rd way? Hopefully, as we can see, the Dutch polder model is alive and well.
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