Biderman on Europe.
Europe is in big trouble, and the trouble is getting worse, much worse listening to all the news lately. Why it is getting worse is that it is now apparent that neither the left nor the right has a workable solution to the two major Europeans issues, overspending and declining economic activity. By the left, I mean the existing political structure of government dominated economies. By the right, I mean a German style austerity program.
In my opinion the real problem is that the creation of the Euro in 2000 has allowed each member of the Eurozone to spend more than it makes regardless of what actually is going on in the local economies.
What Europe spends big bucks on is cradle to grave support by the state. The prevailing belief is that everyone deserves to be taken care of. The key word here is DESERVES. Therefore, borrowing to pay bills even if you cannot afford to pay back the debt is obviously the JUST way to go. Video below.
Guest post by John Redwood.
2012 is a year crying out for leadership.
2011 saw dreadful drift in the West. The EU politicians proved incapable of deciding whether to press on to create a single country called Euroland or not. Would they take the necessary powers to tax, spend, send money to troubled regions and print money on the scale needed to shepherd through their chaotic union? Would the voters let them? Could they do so by stealth, without referenda?
As a result they fell between the two schools of thought. Some wanted to avoid spending and borrowing collectively, thinking they could have a currency union without the usual systems for using budgets to ease the problems in the less successful parts of the zone. Others wanted more transfers and common borrowing, but were unable to convince Germany fully, as she feared she would be paying a lot of the bills.
The US politicians ended up in stalemate. US politics is polarised between those who want to spend and tax less, and those who want to tax more. It is split between proponents of Obama’s health care reforms, and those who want them reversed as soon as possible. Major deficit reduction has been delayed. The US wants to pull out of its Middle Eastern wars, but has sounded an uncertain note over how and when.