Day By Day

Tuesday, May 08, 2012

Some thoughts on Europe

From the always thoughtful and insightful Richard Hernandez at PJ Media:

France, Greece or Spain? It doesn’t matter, says Daniel Hannan, a Conservative MEP (European parliamentarian) who says of recent events in his commentary: “France and Greece are just the beginning – Europe is entering a downward spiral.”

The key problem, he writes, is the false choice between increasing the tax burden to retire debt and increasing the debt. Having failed to do the former, the European parties are prepared to return to the latter. “So why do voters hope to solve the crisis by accelerating the policies which led to it?”
Much of the blame must attach to the Centre-Right parties currently in office in most national capitals. Though they talk of fiscal prudence, many of them are in reality locked into Euro-corporatism. With a handful of honourable exceptions, they have presided over crony capitalism, more spending, more taxes and more debt. Their failure has opened the door to the angry and populist Left. When the ‘Right’ is represented by Samaras and Sarkozy, it’s no surprise that voters cast around for radical alternatives. After all, when it comes to the euro, the Trotskyists have been proved right. They argued all along that, while the single currency would suit the suits, working people would suffer.
Because they don’t know anything else. Because it has seemed to work for so long they don’t know how to do anything else. Because it has always been a case of “heads we win, tails the public loses”. Both the “populist left” and the “centre-right” drink from the same river of public funds. The sole distinction is that while the first fatten one set of cronies, the second fattens a slightly different set of cronies.

And the worse things get, the likelier people are to demand the high-tax, high-spend policies which caused the mess. The eurozone is now in a vicious circle,” Hannan concludes.  The cure, having caused the disease, will be used to treat the disease. 

I like Hannan's observation of the false choice of taxes or debt.  Much the same is the MSM "debate" here in the USA.  What is almost always significantly missing is that third unnamed choice; to reduce spending to have it come into line with revenues.  But it is almost as if government spending is locked into place, immovable as granite, and everything else much adapt to fit.  Can anyone say cart and horse?

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