Facing their biggest monetary crisis since Weimar Germany, the Economic powers of Eastern and Western Europe have suddenly discovered free markets, the private sector and (most interesting of all) that unbridled Government spending on entitlements is the sure path to financial ruin–just ask Greece and Spain about that. Most of Europe has “been there, done that” when it comes to huge government bureaucracies, unsustainable pension promises to citizens and other entitlements such as month long vacations and 32-hour work weeks. As a result of decades of this irresponsible behavior, Europe now finds itself on the brink of the collapse of the Euro, if not the EU concept entirely.
At the same time the United States, has–because of its historical reliance on the private sector and free markets–reigned supreme as easily the most robust economy on Earth for most of the 20th century (with the exception being the FDR/Great Depression era). Yet what was once termed the “Arsenal of Democracy”–ironically, by FDR himself–now seems bound and determined to follow the miserable and failed example of the European socialists, led by an ideologically “pure” but tone-deaf band of merry Marxists.
There is an argument in Conservative circles as to whether the destruction-in-progress of our economy is intentional (in the Cloward-Piven sense), or if it is merely that we have self-serving simpletons running the ship, who are completely blind and clueless about the impact that their ideology-focused decisions are having on our economy and its citizens. What we do know is that the projected debt has skyrocketed over the last 2 years–way beyond George W. Bush’s wildest nightmares–and will have quadrupled by 2019, based on current projections derived from the Democrats’ out-of-control spending bills; yet the Party in power (perhaps we should just call it “The Party” from now on?) seems hell-bent on stealing every last nickel it can before they face the inevitable music in November. In the meantime the entire world looks to us as it always has for guidance, and gets….Obama? And you wonder why we are losing respect with almost all of our former allies?
Peter Schiff–who predicted the housing bubble and market collapse well over a year before it happened–writes about this phenomena from the G20 riot summit in Toronto. It is worth the read.
Since I also play the markets a bit and watch over what little money I do have like a hawk, I also find Schiff’s weekly video post to be enlightening (you may have to sign up–it’s free–but if so, it is definitely worth the trouble to get his take each week). This week’s post–which was posted Friday–nicely complements his written piece.