The Progressive Path to Financial Catastrophe

America and its citizens have been given a great gift. A Time Machine! The best thing about this time machine is that it is free. It took no bloated pork barrel project to build. It does not require a DeLorean, or a Flux Capacitor, or a billion dollar supercollider to create nuclear fusion. This time machine allows us to travel 10 years into the future to see the results of the Progressive Agenda

All that is required to access this time machine is to open the pages of the New York Times and Wall Street Journal, or turn on CNN, Fox, or CNBC, and pay attention to the coverage of the European debt crisis.

If you have not been paying attention, European countries are starting to declare bankruptcy. Not really, but it’s the sovereign country equivalent of bankruptcy. Basically saying – we have so much debt, that we can’t even make the interest payments anymore and still provide basic services to our citizens. This would be like if one of us were in so much debt, that the interest we had to pay on our credit cards each month left us nothing to buy food for our children or pay rent.

Greece fell first. They are still negotiating their bailout package with a looming debt payment in the next 60 days that it cannot make. The bailout package is going to be somewhere in the neighborhood of $160B over 2 years. But it does not come without strings.

The aid package being negotiated to bail out Greece is worth 120 billion euros (about $160 billion) through 2012, according to Vassilis Papadimitriou, a spokesman for Greek Prime Minister George Papandreou.

But the International Monetary Fund and European Union are demanding further austerity measures as a price for the bailout, according to a top Greek labor union official.

Greece will be required to cut civil servants’ salaries, freeze their pay increases, reduce their pension payments, change tax rates and increase the value-added tax consumers pay on purchases, according to Ilias Iliopoulos, the general secretary of the public sector union ADEDY.

Source CNN.com 4/29/10

This week, Portugal and Spain have had their debt downgraded. It’s the tip of the iceberg. As a point of reference, here is the situation by the numbers, and what the numbers mean.

Country National Debt National Debt as a Percent of GDP

Greece ~$581B 170%

Spain ~$2.5T 186%

Portugal ~$584B 235%

United States ~$13.7T 96%

UK ~$9.5T 425%

National Debt = the total money the country has borrowed from other people, and will eventually have to pay back.

National Debt as a Percent of GDP = National debt in relation to the total economic output of a country annually. So for example 100% means that a country owes the same amount that the entire country generates in economic value in one year.

So the countries in Europe who are declaring bankruptcy, what do they all have in common?

  1. Universal healthcare in some form
  2. Broad government pension programs for state and private sector workers
  3. The institutionalization into government policy of union style labor protection and welfare programs.
  4. VAT taxes in addition to high income taxes (and they still are running out of money)

European nations represent the pinnacle of the progressive model, societies of entitlement and social democracy. This is the progressive agenda. These are the countries that are the role models to the progressive movement of what they want our country to become. They are bankrupt, and they need bailouts.

Hmmmm? Are we thinking these are really the right role models?

No – I’m not Glenn Beck – I don’t believe that the progressive movement is intent on bankrupting the US as a stated purpose. But I do believe that many progressives know so little about economics, or just ignore the arguments, and care so much about everyone liking them that they are unable to face the harsh reality that the society they want to create is not financially plausible or sustainable. A fact which is proven beyond a shadow of a doubt with the current European debt crisis!

This is a template, this is a crystal ball, this is a time machine published in the paper and broadcast on the news every single day. This is America’s future under the current administration. We are likely less than 3 years from a downgrade to US debt which will start the death spiral. We are within 2 years of most countries in Europe, including possibly the UK needing a bailout. These bailouts are a direct result of the progressive programs that Europe has had in place for decades. These are the same policies and programs that progressives are putting in place here, right now.

Let’s use the gift of this time machine to radically cut government spending across the board, reform social programs and roll back the society of entitlement. We have a little time left, but not much.

What do you think?

Guest Blogger – Jeff Hine

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One response to “The Progressive Path to Financial Catastrophe

  1. As an Irishman I am sitting on the edge of my seats to see how smoothly the Greek bailout materializes.

    The ramifications of political turmoil and a dissolved Government in Greece would be devastating to any future financing Ireland may desperately crave.

    The Greeks are in an ironically privileged position of being the first in the eurozone to be bailed out. Although the Greeks will never see it that way, any further bailout will undoubtedly be stricter and given the future outcomes of the Greek situation, further rescue packages may not be forthcoming at all.

    An open objection from member states to another financial bailout could have devastating repercussions for the future stability and tenure of the euro and more worryingly a cataclysmic effect on Ireland.

    http://craigmcinerney.wordpress.com/2010/04/27/sledgehammer-economics-irelands-potential-economic-destruction/

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