France, Greece and Italy. The question Americans are asking, but not our leaders, is will this some day be us?
France, Greece and Italy — anybody want to buy a country?
You wouldn’t want any of them, even for free. The question Americans are asking, but not our leaders, is will this some day be us?
Our candidates couch our massive public debt with lamentations that our grandchildren will face paying it off. They miss the point. We already are paying for it with nagging unemployment and shrinking retirement funds as stock and bond markets gyrate.
ABC News reported, the average 401(k) account last week lost $4,000 on the European news.
Europe’s mess is our future. Italy, France and Greece are asking the world to forgive billions in loans and to throw in some new ones. Their politicians, now bailing out daily, had every opportunity to get that under control. They took the easy way: Ignore it and let somebody else worry about it.
Any attempt to lower debt has been met with political gridlock, even riots. Sound familiar?
(The broke nations asked China for a few hundred billions in “stimulus.” China smelled the scam and respectfully declined.)
HUGE AND GROWING
Result: Greece’s debt is an astounding 120 percent of its gross domestic product. And it’s growing exponentially as the population gets older. Italy and France are little better off.
At the same time, our own public debt has skyrocketed in three years to a recessionary 67.5 percent of domestic output on Sept. 30, up from 36.9 percent since 2008 (U.S. Bureau of Economic Analysis). The country obviously is heading the wrong way on a slippery one-way street,
What do the Europeans want us to fund? The obvious answer is their extravagant, government-funded lifestyles.
Unions (guilds) control the economy in Greece, France and Italy. With zero restraint, workers get universal health care, lengthy vacations and retirements equal to most of their pay, all publicly funded. Plus, retirement at age 50.
The result is the countries for decades have spent little on improving their economies. Their exports have plummeted, their worker productivity is among the lowest. Private job creation is at a standstill.
The politicians responded by vastly increasing the number of public workers to fight unemployment. This is money that should have gone to expanding real jobs that produce something. Now that the money has dried up, collapse is happening.
GERMANY HELPED ITSELF
Germany foresaw this. It, too, was crippled by its public debt, workers on six-week vacations at government spas, free health care and luxury retirements.
Then business, government and unions worked together to fix this. Germany, despite the recession, has one of the fastest-growing economies in the world. Its debt has fallen, and output and employment are soaring.
I was stopped by a news photo last week of a well-dressed man on his knees, begging for a handout, in front of a bank in Milan. It looks like he’s crying.