Wednesday, May 16, 2012

Circling The Drain

Ten years ago a young couple I know visited Greece, Italy and Spain on their honeymoon. The young husband told me he was amazed at what a leisurely life people in those countries led. “They don’t bust their butts working long hours like we do,” he said. “They spend most of their time sitting in cafes sipping wine, visiting and talking. Why can’t we do that? Why do we work so hard over here?” He talked about selling out his assets here and moving there, but I warned him that what he witnessed was not sustainable and wouldn’t go on too much longer.
It’s crunch time now in Europe and soon it will be here in the United States as well. Money to pay for cradle-to-grave entitlements liberal/socialist governments promised decades ago has run out. When leaders like France’s Sarkozy told voters that the gravy train will go off the rails unless entitlements are cut back, they voted him out. They put in a socialist who promises that he’ll keep it all going by taking more money from the rich. Sound familiar? The day after his election, the socialist Monsieur Hollande took a look at France’s books and discovered things were worse than Sarkozy said and his first action will be talking to German Chancellor Angela Merkel about how to avoid collapse of the Eurozone.Meanwhile, our biggest state, California, is facing a $16 billion budget deficit. Even the reincarnated liberal Governor “Moonbeam” Brown warns that it must cut entitlements or raise taxes or both. Will it? Will enough wagon-riding California voters actually jump off and join the taxpaying workers who are pulling it? That’s the essential question for both Americans and for Europeans, because if they don’t, it’s all going to collapse and anarchy will reign. I don’t want to even imagine what that will look like. Unless the wagon-riders in Europe and in the United States grow up and realize the Nanny State cannot afford to keep taking care of them, things are going to get out of control.Greece is the canary in the coal mine of financial collapse because they’ve been living the longest on borrowed money and borrowed time. Leaders there who tried to cut entitlements saw riots in the streets and were soon voted out. Germany is getting tired of lending Greece money for their unsustainable lifestyle, much the same way China is leery of lending more to the United States. Germany wants to make Greece’s continued membership in the Eurozone difficult enough that they’ll decide pull out. Then the task will be preventing a domino effect of Italy, Spain, Portugal, and Ireland falling down as well.Will Greece pull out of the Eurozone and go back to printing Greek drachmas? And printing, and printing . . .? How long can that continue? Alex Tsipras, leader of the radical leftist coalition Greek voters elected on May 6th wants to roll back the salary and pension cuts imposed by the European Union and wants to hire 100,000 new government employees to bring down unemployment. How many drachmas will that take? What happens when Greeks try to spend those drachmas and discover there’s nothing to back them up? One Greek political analyst sums it up thusly: “The gravity of the situation isn’t appreciated . . . The only thing that will focus minds is when the money to pay pensions and salaries just doesn’t arrive.”That’s what scares me. Most Europeans and most Americans refuse to face reality. Financial panic is contagious and the United States is not immune. If there’s another run on the banks here like there was in 1933, what will FDIC do for the lines of depositors demanding their money? Will our Federal Reserve print trillions more dollars on top of the trillions already printed?

Here, wagon-riders and those Americans whose idea of “Hope and Change” means accelerating our march to socialism together comprised a majority in 2008. Will that coalition stay together and keep socialist Democrats in power after November? It’s almost six months until the election - an eternity in politics. A lot of wild cards can be thrown down between now and then. And what if leftist Democrats lose the White House and Congress? Would they allow a peaceful transition of power between November and January?

I hope so, but I don’t take that for granted anymore.


Showboat said...

Thank you, Mr. McLaughlin, for an honest assessment of our nation's prospects. The dismal future of Europe is a warning for the United States to come to fiscal responsibility, like Right Now! New leadership with sober attention to our debtor economy must take major steps after replacing the criminals now in power.

Anonymous said...

This did not happen overnight. In the US, its the other guys fault no matter who is in power. We need to get along with each other. The hate that has been built up between the two major parties is dividing us more and more. Wake up America.

Anonymous said...

For the last time----- the financial crisis has nothing, I mean NO THING, to do with the fake left right paradigm. Nothing. If you can't see oabma continuining the neo con agenda then you haven't a clue. The socialist bs is nonsense.
The only blame goes to the federal reserve and the international banking cartel.

The non federal federal reseve is the problem. Period.
It didn't help that glass steagel was repealed opening the doors for lying cheating and stealing.

Get rid of the fed. Back our currency with gold. Stop paying ridiculous amounts of American tax payer money to places like Israel. End the neo con war dream ( hint you can't wage war on a concept you f$$ing half wits)
And its over.

Steve said...

The ubiquitous socialist hyperbole aside, I agree with you 100%. We’ve been on an unsustainable trajectory for a long time. A 16 trillion dollar bar bill is one heck of a tab. Those Democrats who think we can reverse this economic slide without cuts to entitlements, are just pandering to the base and disregarding the gravity of our situation. Those Republicans who think we can reverse this economic slide without tax increases and smart cuts to defense are just pandering to the base and disregarding the gravity of our situation. I don’t want my taxes raised – most people don’t – but I think it’s necessary if we’re going to get our economic problem under control and begin the long slog towards balancing the budget and paying down our 16 trillion dollar debt. The shame of it all is that we have too many people on Capitol Hill who prioritize their campaigns, first; their party, second; and this country, third.

Anonymous said...

In regards to California, do not expect the people of California to vote for more tax increases. We voted it down just last year and will vote it down again. Gov Brown says he's meeting us in the middle by making major cuts. That's not true. The cuts to the budget he has made are cuts from the "requested" budget. An over inflated piece of garbage designed for him to trim back while leaving increases over last year but still declare he made cuts. When you hear that the people have voted down the tax increase - know it's our way of standing up to the liberals running this state!

Anonymous said...

Keep bickering---liberal this, conservative that, blah blah blah..

They are laughing all the way to the bank. Literally.

Consider yourselves divided and conquered.

Tom McLaughlin said...

It's both parties, of course, but you won't see Democrats today who vote to cut government. The candidate I agree with most on this matter is Ron Paul. He's specific about where and how much he would cut from the federal government.

Senator Coburn suggests that term limits would be the only way to change the culture in Washington and I'm inclined to agree. We did it for the presidency, why not for Congress?

Scott said...

You people trying to claim that we can 't divide our county into two distinct groups - lazy, stupid liberals and intelligent, patriotic right wingers - are really messing with my head. Why can't things be as simplistic and as black/white as Tom makes them out to be. Tom's way involves less thinking and makes for convenient scapegoats. Plus, it is fun to hoot and holler insulting comments trying to get others angry. Why overthink things?

You go Tom, tell it how it is. Or how you pretend it is...whatever. Don't let others make you think - be yourself!!!!!

Anonymous said...

There is a reason the founding fathers voted against "factions" or parties. Too easily manipulated and open to corruption. And, whatta ya know? Here we are with two fake parties controlled by the international banking cartel and the fed who use these parties to keep the sheeple in check.

There will never be true change without civil disobedience. Never.
It's gone way too far. Nothing is changed with a vote. Nothing. The electoral college negates yor vote! Yet people still accept this antiquated nonsensical idea.

Get over yourselves and come together! Forget about hyper emotional topics like abortion and focus on getting these criminals out of DC!!
Maybe if we had a real press?

Anonymous said...

From SodaHead:

It's a default Republican talking point to accuse all Democrats of wanting to grow government and to say that instead government should be shrunk. Despite that Republican talking point, government did grow more than at any time since World War II under their Republican president, under George W. Bush and a Republican congress, and this Democratic president is proposing shrinking government, but that will not interrupt the talking point, which alleges exactly the opposite of what's really happening.

It's the same thing on taxes on regulations. It is a default Republican epithet that Democrats want to increase taxes and they want to increase regulations…So they say not only does President Obama want to increase taxes and regulations, he already has. And while that talking point is a tried and true talking point, it's an applause line, right? What the Obama administration has actually done bears no resemblance to the talking point, and is therefore a bit of a flabbergast for Republicans on this.

In January of last year, it has gone down the memory hole for Republicans, but President Obama issued an executive order and wrote an op-ed in the rabidly right wing Wall Street Journal editorial page calling for a government wide pruning of unnecessary or overly burdensome regulations. In February of 2009, President Obama implementing either the largest or one of the largest middle class tax cuts in American history. That was part of the stimulus actually, but you'd never know it from the way that the Republicans talk about it. The administration also brags on having passed 17 tax cuts specifically for small business. So naturally, keep denouncing him as raising taxes, piling on the regulations, and raising taxes."

Kevin said...

Tom, do you honestly believe that Romney will shrink government?!? Did Bush? Did Reagan? No,he tripled the national debt. He ran chronic budget deficits for 8 solid years. He increased spending by 25% in 8 years. He ballooned the size of government-- heck he created the Dept. of Veterans Affairs which is a ginormous expansion of government.

Trying to lay government bloating on a particular party is hogwash. They all expand it, but different people whine about HOW it is expanded.

Anonymous said...

I"m waiting for someone to come up with an idea of "Starting Over".

Wipe all the debts clean and start again.

Sounds like a great time for a populist leader to come on the scene and blame the Christians and Jews for all this.

History will repeat itself. Only thing is, maybe this time will be the last, aka AC.