May 21, 2012 2 Comments
President Obama has urged Europe to back off of the austerity measures that are being implemented in countries that are about to go bankrupt. Greece, Italy, Spain, Portugal and Ireland are all on the brink of bankruptcy. Either they cut spending and raise taxes, get bailed out by the rest of Europe or they go bankrupt and perhaps take down the Euro. Most of these countries are taxed out, so raising taxes isn’t really an option. Cutting spending is. Not surprisingly Obama opposes any move away from a massive cradle to grave welfare state even if said welfare state brings a nation bankruptcy or threatens an entire currency.
Obama’s advice to the Europeans shows his complete lack of understanding about how economies work. He wants Europe to back off austerity, which of course means that the nations on the verge of bankruptcy will likely end up bankrupt or bailed out. At the same time he advocates the happy sounding idea of a “strong growth’ model. How does government create strong growth in the government? It cannot, at least in terms of actually creating the growth. Growth happens in the private sector. Government can create favorable conditions for growth by lowering taxes, cutting spending and backing off on regulations.
Obama isn’t interested in any of that though. He doesn’t want Europe to cut taxes or spending. All the talk of belt tightening from Obama is meaningless in light of his admonition that Europe stop austerity measures. The fact is Obama believes in a socialist top down economy. Government controls the economy from the top to the bottom in Obama’s world. That’s why he’s aligned himself with France’s new Socialist President. These people really believe that a socialist state will bring about prosperity, even to the point of ignoring the double digit unemployment that Europe’s most socialist countries enjoy.
Obama wants to follow Europe down the road to bankruptcy. In his three plus years in office, the Federal government has created $5 trillion in new debt. Any talk of cutting anything from the Federal budget is met with attack from the President. How much longer will it be before America turns into Greece? We surely won’t have Germany bailing us out. In fact, Germany may not bail out Greece this time around. But it begs the question why we would want this for ourselves?
One of the problems with the ‘too big to fail’ argument concerning bank and auto company bailouts is that people begin to apply it to government. Surely the Federal government is too big to fail and will be bailed out. The Federal government is big enough to fail and no one will bail us out. Greece’s economy isn’t anywhere near as big as our own. Yet it is about to fail and at some point it’s going to. Germany will have had enough and they’ll cut Greece and the other debtor nations in Europe free. Those nations have had their chance at bailouts, they’ve had their chance to get their fiscal house in order. So have we. We have a chance to cut spending significantly, we have a chance to get our debt under control. With Obama it won’t happen, with Romney it’s at best a 40% shot that it will happen.
Greece is a precursor to the problems we’re going to face down the road if we don’t get our Federal spending under control. Obama is quite clear about his position. He opposes European austerity, he believes in government control of the economy and has so much as stated this via is absurd “strong growth” position. We will not get spending under control under this President. We will not have a strong economy until we start cutting government spending and cut taxes. Obama’s mishandling of economic matters is bad enough here in the US. In Europe his position will likely lead to bankruptcy in Greece, Italy, Spain, Portugal and Ireland. It could even lead to the collapse of the Euro. Do we want this disaster for ourselves?