Buzz’s Journal---Look to Europe for Hope
Bangkok, Thailand. October 25, 2010.
It is popular in the US for many to disdain Europeans as weak, indecisive, lazy socialists, bloated by welfare spending, and so on. While some criticism is certainly warranted, most is overstated and some is simply untrue. The fact remains that, if you want to know what America will be like in 10 years, look at Europe today. It seems to take us a decade to mirror Europe. Right now, I find some hope in this.
Americans, frankly, do not yet have a clue about what it’s going to take to turn the US economy around, and as far as foreign affairs are concerned, Americans don’t seem to care (has any candidate or party mentioned Afghanistan during this election campaign?). The rhetoric of this election season is devoid of any serious discussion about policy choices and alternatives. The result is that, regardless of who wins next week, or by what margins, the following two years will fail to see even a start to reversing the slow, but relentless, deterioration in America’s economy, world position, and our way of life. If you hear of anyone in power who is talking about both spending cuts (and that means cuts in entitlements and defense) and tax increases, let me know; I’d like to support him or her, regardless of party affiliation, or, indeed, a third party. When America begins to discuss what entitlement and other cuts to make, and what taxes to increase, and which to decrease such as employment taxes, we will at least begin the road to recovery. So far, the prospects of serious change does not seem hopeful, but all is not lost if one takes a quick look at Europe.
Ireland, something of an economic basket case, has already made substantial cuts in public spending, which are sticking, as has Greece, which has made some significant cuts in entitlement and public spending, and actually seems to be serious about collecting taxes, which for Greece, is a huge shift. France is in open rebellion over the government’s proposal to up the retirement age, but, the Sarkozy government is not giving in and the French senate has just approved this significant change. No American party has even approached specific recommendations for entitlement and spending cuts. The new British government is about to implement really drastic public spending and some welfare cuts, and cuts in defense, as well as tax increases, and given the British parliamentary system, these proposals will almost certainly become law.
There is a legitimate debate about whether this is the right time to curtail public spending, the fear being that it is premature inasmuch as the recovery, such as it is or is not, is so tentative and fragile. Still, in Europe the debate is taking place and changes are being made. In the US, there will be no significant curtailment in transfer payments or in defense spending for the next two years, and don’t worry about tax increases either. If anyone is concerned that they will lose anything because the Republicans and blue party Democrats, or anyone else, is on the austerity bandwagon, you can go to sleep in the security that neither you, nor anyone else, will see a dollar less.
The current path of the US, which depends solely on foreigners lending us money at low rates, will end, although no one can say exactly when or how. It would be nice to think that we Americans can set our own house in order; otherwise others will do it for us. I hope that neither myself nor my children will live to see a creditors’ conference convened, in which foreigners get together to impose conditions on the US as the price we will have to pay for us to keep borrowing money from China, Japan and other surplus nations. These conferences have been routine as concerns other countries where international lenders have lost faith in the borrowing country’s ability to repay debt. At any rate, looking at Europe today, I have hope that it won’t come to this, but, so far, it is only a hope, not an expectation.
It is popular in the US for many to disdain Europeans as weak, indecisive, lazy socialists, bloated by welfare spending, and so on. While some criticism is certainly warranted, most is overstated and some is simply untrue. The fact remains that, if you want to know what America will be like in 10 years, look at Europe today. It seems to take us a decade to mirror Europe. Right now, I find some hope in this.
Americans, frankly, do not yet have a clue about what it’s going to take to turn the US economy around, and as far as foreign affairs are concerned, Americans don’t seem to care (has any candidate or party mentioned Afghanistan during this election campaign?). The rhetoric of this election season is devoid of any serious discussion about policy choices and alternatives. The result is that, regardless of who wins next week, or by what margins, the following two years will fail to see even a start to reversing the slow, but relentless, deterioration in America’s economy, world position, and our way of life. If you hear of anyone in power who is talking about both spending cuts (and that means cuts in entitlements and defense) and tax increases, let me know; I’d like to support him or her, regardless of party affiliation, or, indeed, a third party. When America begins to discuss what entitlement and other cuts to make, and what taxes to increase, and which to decrease such as employment taxes, we will at least begin the road to recovery. So far, the prospects of serious change does not seem hopeful, but all is not lost if one takes a quick look at Europe.
Ireland, something of an economic basket case, has already made substantial cuts in public spending, which are sticking, as has Greece, which has made some significant cuts in entitlement and public spending, and actually seems to be serious about collecting taxes, which for Greece, is a huge shift. France is in open rebellion over the government’s proposal to up the retirement age, but, the Sarkozy government is not giving in and the French senate has just approved this significant change. No American party has even approached specific recommendations for entitlement and spending cuts. The new British government is about to implement really drastic public spending and some welfare cuts, and cuts in defense, as well as tax increases, and given the British parliamentary system, these proposals will almost certainly become law.
There is a legitimate debate about whether this is the right time to curtail public spending, the fear being that it is premature inasmuch as the recovery, such as it is or is not, is so tentative and fragile. Still, in Europe the debate is taking place and changes are being made. In the US, there will be no significant curtailment in transfer payments or in defense spending for the next two years, and don’t worry about tax increases either. If anyone is concerned that they will lose anything because the Republicans and blue party Democrats, or anyone else, is on the austerity bandwagon, you can go to sleep in the security that neither you, nor anyone else, will see a dollar less.
The current path of the US, which depends solely on foreigners lending us money at low rates, will end, although no one can say exactly when or how. It would be nice to think that we Americans can set our own house in order; otherwise others will do it for us. I hope that neither myself nor my children will live to see a creditors’ conference convened, in which foreigners get together to impose conditions on the US as the price we will have to pay for us to keep borrowing money from China, Japan and other surplus nations. These conferences have been routine as concerns other countries where international lenders have lost faith in the borrowing country’s ability to repay debt. At any rate, looking at Europe today, I have hope that it won’t come to this, but, so far, it is only a hope, not an expectation.
posted by Buzz at 2:14 PM
0 Comments:
Post a Comment
<< Home