unsistainable spending

8Jun/101

Old Europe scrapping welfare state as US embraces it

Being well informed, many readers are acquainted with the debt crises in various nations of Old Europe; most notably the PIIGS (Portugal, Ireland, Italy, Greece, Spain) but also to a lesser extent in the UK, France, and Germany. These have led to some enormous demonstrations in many nations, and occasionally open rioting in Greece and Spain, as governments struggle with implenting the necessary austerity measures. One place, though, where their not waiting until they achieve econo-geddon is Germany:

Germany was close to finalizing Monday a major package of government savings, which would likely cut social welfare benefits, slash public sector jobs, and raise taxes to tackle the budget deficit.

With the debt crisis undermining the euro, Chancellor Angela Merkel's government is determined to tackle Germany's deficit - which while among the smallest in Europe is still above the official EU limit.

Several other countries - notably Greece, Spain and Portugal - have already embarked on much tougher austerity drives.

Merkel brought together her Cabinet for a two-day meeting at the chancellery that started Sunday to discuss the package. She said as she went into the meeting that Germany can no longer live beyond its means, insisting "we can only spend what we take in."

If only we could have the same resolve and candor in Washington. Now, no one likes taxes being raised, and there are valid arguments, which will be explored here in future posting, that here in the US a flat tax, or a simplified tax like Paul Ryan suggests, would raise as much revenue as we do now without the need for people to jump through as many hoops nor the number of IRS employees to handle the returns. But you have to admire her going to the root of the problem; too much welfare state largesse and too many public sector employees. It sounds similar to what's going on here, no?

Of course, just like here we have the class warriors; only there they are happy to call themselves socialists or, you know, the "C" word:

Opposition politicians and union officials criticized the prospect of cutbacks on social spending.

The head of Germany's labor union federation, Michael Sommer, argued that Germany should increase taxes for the rich and introduce a financial market transaction tax to help narrow its budget gap.

This, coming from the same bunch that gets 6 to 8 weeks paid vacation yearly, unlimited paid sick leave, and beer breaks several times a day, at least at the Mercedes plants in Stuttgart that I'm familiar with.

So while Obama and the far-left Democrats are overtly running toward embracing the Euro-statist model for our government and economy, the Europeans are wising up to it's, ahem, unsustainablility. All this coming on the back of recent revalations that not only is Obamacare going to "bend the cost curve" in the undesirable direction of higher costs (thanks for telling us after the fact, CBO), but at a time when even prominent, progressive, Keynsian economists like Bob Reich and Jeffery Sachs are admitting that the stimulus failed!

I ask you then, with our own debt set to match and surpass GDP in a relatively short time, and the European socialists finally realizing the crippling that such dept to GDP ratios have on their economies, why are we so committed to taking the same path? When will the O!ministration stop insisting that we continue to take the proverbial long walk off of that short pier?