Governments in Europe, from Greece to Spain to Portugal, are finding out the hard way what it means to spend public money frivolously. Public finances in the Euro Monetary Union are so precarious that its sustainability and future is in doubt. To shore up the problem, or attempt to, Eurozone governments are embarking on no-frills, cost-cutting initiatives to slash deficit spending and get a handle on spiraling debt.
Though the United Kingdom is not a member of the Euro (the UK kept its Sterling Pound as its official currency), the island country is getting in on the act, too.
“Britain Faces An ‘Age Of Austerity’ As The New Coalition Government Readies Aggressive Cuts In Public Spending To Slash The Deficit, Treasury Minister David Laws Told The Financial Times On Saturday.” (“Britain Faces Aggressive Cuts In ‘Age of Austerity,’” AFP, 5/22/10)
• “Laws, chief secretary to the Treasury in Prime Minister David Cameron's coalition, will outline plans on Monday to make 6.0 billion pounds (6.9 billion euros, 8.7 billion dollars) of cuts in the current 2010/2011 year.” (“Britain Faces Aggressive Cuts In ‘Age of Austerity,’” AFP, 5/22/10)
“Britain's Public Finances Have Been Ravaged By Enormously Expensive Banking-Sector Bailouts, And A Record-Length Recession That Has Slashed Taxation Revenues And Ramped Up Expenditure.” (“Britain Faces Aggressive Cuts In ‘Age of Austerity,’” AFP, 5/22/10)
While other countries work to reign in public spending, the United States, with about $13 trillion in public debt, continues on an unsustainable path. As Eric Zimmerman of The Hill reported, the International Monetary Fund predicts “U.S. national debt will soon reach 100% of GDP.”
“By 2015, The IMF Suggests, Debt Could Reach Well Over 100% Of GDP.” (Eric Zimmerman, “IMF: U.S. Dept Approaching 100% Of GDP,” The Hill, 5/15/10)
“The IMF Predicts That The U.S. Would Need To Reduce Its Structural Deficit By The Equivalent Of 12% Of GDP, A Much Larger Portion Than Any Other Country Analyzed Except Japan.” (Eric Zimmerman, “IMF: U.S. Dept Approaching 100% Of GDP,” The Hill, 5/15/10)
“Greece, In The Midst Of A Financial Crisis, Needs To Reduce Its Structural Deficit By Just 9% Of GDP.” (Eric Zimmerman, “IMF: U.S. Dept Approaching 100% Of GDP,” The Hill, 5/15/10)
Let’s get this straight: the U.S. would need to reduce its structural deficit by more than Greece? Greece, the country that President Barack Obama wants us to help bail out?
Okay, so what’s being done about it? Any big plans to cut spending? Nope. Not only is there no plan, Democrats who control Congress, and therefore set the legislative agenda, don’t plan to even produce a budget!
“Democrats In Congress Will Likely Skip This Year The Annual Task Of Crafting A Budget For The U.S. Government Amid Lawmakers’ Unwillingness To Approve A Measure Sure To Include Huge Deficits.” (Brian Faler, “Democrats Unlikely To Pass Spending Plan In Face Of Deficits,” Bloomberg, 5/15/10)
• “House Speaker Nancy Pelosi, a California Democrat, and House Majority Leader Steny Hoyer, a Maryland Democrat, signaled on May 13 that they are prepared to write separate spending measures rather than lay out a five-year fiscal blueprint.” (Brian Faler, “Democrats Unlikely To Pass Spending Plan In Face Of Deficits,” Bloomberg, 5/15/10)
“The Government Is Projected Run $10 Trillion In Deficits Over The Next 10 Years, With Interest Payments On The Debt Forecast To Quadruple To More Than $900 Billion Annually.” (Brian Faler, “Democrats Unlikely To Pass Spending Plan In Face Of Deficits,” Bloomberg, 5/15/10)
Worse, when Rep. Paul Ryan (R-WI) produced a budget blueprint (one of the few lawmakers to actually do so), Democrats pounced and rehashed the same ‘ol arguments they always trot out like an old dead horse about tax cuts for the wealthy and blah, blah, blah.
The thing is, Ryan’s plan was at least a serious attempt at balancing the federal budget.
“The Nonpartisan Congressional Budget Office Put Out A Report Last Month On The Ryan Proposal That Showed It Moves The Country Toward A Balanced Budget, While Maintaining Current Law Would Bring Massive Increases In The Deficit.” (Perry Bacon Jr., “House Democrats Attack GOP Budget Proposal,” The Washington Post, 2/5/10)
Once again, Democrats are part of the problem, not the solution.
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