Big Government | by Rep. Devin Nunes | 4/2/2010
Thanks to increasing regulation, rising taxes and greater centralization of power in Washington America is slowly leaving behind the foundation of its economic strength; namely the entrepreneurial energy that comes from freedom. And while a full-fledged Marxist revolution may not be on the horizon, the transformation of America in the image of European socialism is real and it should be of great concern to us all.
The most obvious example of failed central planning remains the Soviet Union. However, failed socialist policies are not limited to the history books. Consider the economic decline and social unrest in Europe.
As a result of government dominance throughout the European economy, member states are facing the current global economic crisis with limited options. The direct pain confronting Europeans is therefore magnified, just as the prospects for economic recovery are limited. These limitations are practical, resulting from the patchwork of laws and regulations imposed on their economies, as well as political, the result of mass dependence on government programs—a dependence shared by all but a handful of wealthy elites.
Evidence of this fact is widely available today. For example, French leaders recently cut federal spending in an attempt to address their national debt crisis. The cuts, however, resulted in massive general strikes, as well as social unrest—riots, looting and mass demonstrations.
Throughout Europe political leaders have been burned in effigy by protestors. They are being forced to choose between social order and financial order. Pay cuts for government employees, for example, result in general strikes. More radical reforms, including those needed for long-term economic health, can’t even be discussed openly.
In the final analysis, without the support of the masses, EU governments are left without the ability to change course and are forced to preside over national decline. I refer to this condition as an economic death spiral.
EU democracies face this threat because deficit spending cannot sustain an economy long-term. At some point, foreign lenders will resist additional financing—a problem already faced by a group of European countries known as the PIGS. The PIGS are Portugal, Ireland, Greece, and Spain. Together they have a combined debt of approximately $198 billion. Spain’s debt is highest, at $116 billion, followed by Greece at $37 billion, Ireland at $30 billion and Portugal at $15 billion.
Some have suggested these nations could be the first in the developed world to default on their credit obligations but the more likely scenario is that they will face long-term economic stagnation. This means high unemployment, high interest rates and little prospect for improvement.
Interestingly, you don’t have to look as far as Europe to find such as doomsday scenario. Leftists in California have driven the state to the brink of bankruptcy with a deficit of $20 billion. If major reforms are not enacted, California will join the PIGS of Europe as another failed social democracy. Perhaps worse, if Obamacare and other Democratic policies are allowed to continue unaltered, America itself will join in this fate.
HT: Big Government