excuse the grammar…

Don't blame China and India for this. The first world has a problem of unemployment because and only because it's in a major recession and the response is austerity instead of stimulus. The few first world countries that weren't affected much by the recession, including Israel, as well as those that responded with aggressive stimulus, such as South Korea (or Germany, once you properly regard the overvalued currency of peripheral Europe as a net stimulus to Germany), do not have very high unemployment.

Now, what you say about importing food is not the position of most social democrats. It's the position of right-wing parties that get votes from farmers by supporting agricultural subsidies and opposing all other kinds of welfare. Urban social democrats – i.e. social democrats in countries where the national mythology of the farmer is not as socialistic as in Israel – tend to be all for agricultural liberalization, and for allowing imports from foreign companies, especially from other first-world countries, rather than giving a local corporation a monopoly.

למה את ה מתכוון כשאתה מדבר על תמריץ? על סובסידיות ממשלתיות לענפים מסוימים ע"מ לגרום להם למכור את תוצרתם במחיר שיכול לעמוד בתחרות עם ייבוא זול מהעולם השלישי? אני לא חושב שזה פתרון כ"כ טוב, לפחות לא בישראל: א) כי את הסובסידיות צריך לממן ממשהו, ויש לנו גם ככה מספיק דברים שהממשלה צריכה לממן ואינה מממנת, אז שתממן קודם אותם; ב) כי סובסידיות ממשלתיות לענף או מגזר מסוים הן הדבר הראשון שמועד לקיצוצים במקרה שהממשלה נקלעת למחסור בכסף, ואני לא רוצה להפוך ענפים שלמים במשק, הנשלטים בידי גורמים שנמצאים בעלות פרטית, לבני ערובה של הצלחת הממשלה בגיוס כספים.
(דרך אגב, לגבי גרמניה, אתה מדבר על העלאה מלאכותית של שער החליפין של היורו, או של המטבעות של מדינות אירופה שההילך החוקי בהן הוא אחר – בעיקר ארצות הבלקן ומזרח אירופה?)
לגבי הגישות של שמאל/ימין לשאלת ההגנה על יצרני מזון מקומיים – תלוי בהקשר. במערב, החקלאים מזוהים מסיבות היסטוריות עם הצד הימני של המפה הפוליטית. עד כמה הזיהוי הזה מוצדק כעת – תלוי בנסיבות הקיימות בכל מקום לגופו. אני גם לא בטוח שבישראל צריך להגן על החקלאות המקומית בכל מחיר (הגם שאני רואה גם צידוקים בלתי-כלכליים בעליל לעשות זאת). אבל כאשר כמה תנועה שהדבר היחיד אותו היא דורשת זה להוזיל את המחירים של מוצרי חלב, ולא אכפת לה איך זה ייעשה – דחילכום, לכו תעשו משהו חשוב יותר עם הזמן שלכם.

Stimulus just means engaging in fiscal stimulus (i.e. deficit spending) when the economy is in a deep recession and interest rates are down to zero so it's impossible to use monetary policy. The term is used to describe Obama's stimulus from early 2009, which unfortunately was too small given the size of the recession and therefore didn't do much to reduce unemployment. What it did do was convince everyone that stimulus programs don't work.

The German policy I'm talking about is the European Central Bank's decision to go for austerity, and avoid any inflation at all costs. Because the European periphery has overvalued currency right now thanks to the mid-2000s' bubble, the only possibilities for it to get out of its huge unemployment situation are,

1. Leave the Euro and devalue. This is the Argentina solution, and is guaranteed to have a bank run. In Argentina it happened only when a bank run was inevitable either way. This may end up happening in Greece, but not elsewhere.

2. Endure years of deflation, which means high unemployment. This is what's actually happening right now in Ireland, Spain, Latvia, and the rest of the periphery.

3. Have zero or low inflation, but have higher inflation in the European core, say 4-5%. This is the least painful solution for everyone except Germans who can't distinguish between 4% inflation and 400% inflation. Thus it's only proposed by annoying Keynesians like Paul Krugman.

Stimulus doesn't have to be subsidies to industry. It mostly consists of social spending (especially unemployment benefits), new infrastructure projects, and tax cuts, in descending order of effectiveness. If a country has a strong welfare state paid by progressive income taxes, then it'll have automatic stimulus – when people are poorer, more people can collect welfare, and fewer people can pay taxes. But in a very deep recession, some discretionary stimulus is needed, i.e. a law authorizing deficit spending on whatever the government fancies. The US paid aid to state and local governments so that they wouldn't lay off teachers and other public-sector employees, extended unemployment benefits, and cut taxes. China built massive infrastructure.

You're right that all Eurozone countries use the same currency, but the relative values of money can still change. In the bubble, the periphery got huge capital inflows, leading to inflation. Nothing big – maybe 3 or 4 percent a year – but it added up. More precisely, nominal wages in those countries rose, without a corresponding increase in productivity. In Germany and the rest of the core, the economy was weak, so inflation was much lower. The result is that both wages and prices are too high in Spain and Ireland relative to Germany and the Netherlands.

Something similar is happening internally to the US. Declining Northern manufacturing states are doing better than Southern and Western states that had very fast growth earlier in the decade (except Texas, which is still doing okay). But because Americans have a common language, it's usually very easy to move (though slightly harder now since it's hard to sell without taking a loss, because housing prices have come down so much). So since 2007 people have stopped moving from New York to Florida in huge numbers, and this somewhat reduces the difference in suffering. The highest unemployment rate in the US is in Nevada, 14%. But in Spain the unemployment rate is 20%: it's much harder to move to Germany.