When Exporting Countries Run Out of Importing Ones
Revenue is dropping like a rock for governments at all levels in the United States and it isn’t any better in the countries that used to rake in the dough exporting to ever more leveraged consumers in the US. Here’s how an experienced city-level politician in Sweden describes this year’s budgeting process:
This crisis is quite particular in scope, development and consequences. I’ve never seen anything like it. The numbers for the local budgets are constantly being revised. The December 2008 numbers are useless. We got new numbers in early February that showed decreasing tax revenue, and then yet another set of numbers in late February that showed an even faster eroding tax base.
(My translation)
Sweden’s currency, the Krona, has dropped like a rock against the dollar recently, but it’s not a boon for exporting companies the way depreciations and devaluations were back in the 1970’s and 1980’s because the global consumer demand simply isn’t there any more. On the other hand, I think the run up in the valuation of the dollar is unlikely to last.
