Peanut Gallery: This re-post is in the FYI category. The author’s outlook is not promising – he sees no way out for the Europeans… and for us if we continue down the road we are going. Will his prediction come true? I don’t know, but his analogy makes sense to me… and it doesn’t bode well for us.

What I don’t understand is how our own politicians can take this country down the same road when they can see what it has led to in Europe?

Please take the time to read the full post, it’s well worth it.
__________________________________

“The thing about corruption, vested interests, and so forth, is that the beneficiaries do not willingly part with their lolly. They take to the streets when it is threatened. The mere word, “austerity,” gets them out there, even before anything has been done, as we have seen in Montreal, Athens, and elsewhere. And now you need more money for the police.”

RealClearPolitics – The Terrible End of Europes Nanny State.

June 13, 2012
The Terrible End of Europe’s Nanny State
By David Warren

Austerity is the mot-du-jour almost everywhere at the moment. It reigns in Spain, for instance. (“Austeridad.”)

As Jim Flaherty said, in hailing the Spanish bank bailout, it “doesn’t solve the problem but it’s a step in the right direction.”

Let us examine that statement for the briefest moment, leaving aside such interesting but tangential questions as, whose money is bailing?

The problem is structural, not fiscal. The fiscal solution does not really get at the problem. Instead, it kicks the problem down the road.

If gentle reader managed somehow to run up a credit card debt, beyond the ability of his grandchildren to pay, the problem wouldn’t be the balance (or shall we say, imbalance) revealed in his bank statement. That would be a symptom of the problem.

Not to comment on his lifestyle; but he must be using this credit card to buy things, even if he is merely kiting his debts from one card to another. (“Financial services” count as “goods,” statistically.) At some point he presumably bought something — or some things — he could not afford.

If his bank then intervened, to raise his credit limit in return for gentle reader’s solemn sovereign promise to start living within his means, we might say the move “doesn’t solve the problem but it’s a step in the right direction.”

We can understand why the bank would be so obviously naive. The alternative is to call in the card, and cut its losses. Those losses — multiplied by the million others lured by easy credit into playing the same game — would take the bank down, today. Better that the cows come home, tomorrow. Continue reading “RealClearPolitics – The Terrible End of Europe’s Nanny State” →