The Euro crisis drags on, and nobody in
Europe, at least, seems to know quite what to do about it. Greece,
of course, is headed for more elections as it dithers about with no
solution in sight. Germany, seemingly the only economy in Europe
with any sort of financial strength, is being hammered from all
sides; every country in Europe wants German money, but no one is
willing to accept any strings. The leaders of both France and Greece
have gone so far as to demand money from Germany.
Worse, the debate is being misdirected
and obfuscated by the adoption of new terminology by liberals and
socialists. Liberals and socialists, at least in America, used to be
somewhat distinct groups; since the Obama Administration, America's
liberals have practically adopted socialism into the Democrat party
platform.
Within the paradigm promoted by this
new terminology, the debate is defined by the terms "pro-growth"
and "austerity." Both of these terms misdirect the debate.
"Pro-growth" in this context is limited to government
growth. Those who use "pro-growth" in this context assume
the government alone is responsible for all job creation and economic
growth; the private sector is tacitly deemed irrelevant. The
flip-side of the coin is "austerity." Anyone who seeks to
limit the size of government is guilty of seeking to harm the poor
citizens, who will suffer from the resulting economic collapse and
loss of jobs (or benefits).
By embracing this paradigm, any real
debate of alternative proposals is effectively foreclosed. If the
private sector is irrelevant, the only question is whether the
countries with money (the Germans) will be "caring" enough
to "help" those who don't (everybody else.) In this
scenario, "austerity" is the culprit, and it's just obvious
that the bailouts will have to occur.
However, this is a false scenario.
First, the private sector is not irrelevant in any country which is
not totally Marxist; only in the old Soviet Union and its satellites
did the government hold all property and create all jobs. Second, in
Europe, as in the U.S., the private sector is far more responsible
for economic growth and job creation; government employment only
accounts for a certain portion of the jobs market. Third,
increasing the size and power of government suppresses private sector
growth, by removing capital from the private sector to the government
and increasing the costs of the regulatory burdens. Government
"austerity" can lead to an increase in a nation's economic
performance when it frees up the private sector.
It's now a liberal article of faith
that Europe is having economic problems as a result of
austerity; yet austerity was imposed as part of the bailouts
required by the collapsing economies in the Eurozone. And the
nations needing bailouts are not the bastions of capitalism, but
those which lean to socialism. As Prime Minister Margaret Thatcher
famously said, "The trouble with socialism is that eventually
you run out of other people's money."
The socialist-leaning nations of Europe
have not only run out of other people's money, but they have borrowed nearly
all of the other people's money they can lay their hands on. They
have incurred massive debt loads which they cannot pay. Yet they are
trapped in a paradigm which prevents them from reaching any workable
solutions, so they pretend the debt problem will magically vanish if
they continue to borrow more money and just throw money at it- but they are quickly running out of other people's (the German's) money.
