The Wall Street Journal calls the economic implosion now taking place in Europe “a crisis of the welfare state.”
The latest European nation to hit the wall is Italy, where national debt is 120 percent of GDP. That is, for every dollar their national economy produces, they owe $1.20.
The Journal calls this a crisis of the welfare state because this Italian national debt well in excess of the ability of Italians to pay for these obligations is the direct result of excessive government spending.
When the Republican presidential candidates were asked in the most recent debate if the United States should help bail out these bankrupt European nations, the consensus response was “no.”
This, I believe, is the correct answer for two very basic reasons.
First, the way to deal with irresponsible behavior is not to find new ways to finance it but to demand responsible behavior.
And second, we are on the same path here and we need to wake up.
Over the last five short years, our national debt as a percentage of our GDP has doubled to about 70 percent, where it stands today.
Projections show that, continuing on the path that we’re currently on, in a little over ten years, our national debt as a percentage of our total economic output will be exactly where Italy is today.
We’ve simply got to change and the big question is if we’re up to the task.
This is really the central issue of our time and what will define the 2012 presidential election.
We’ve got one view of the world in which government takes on a life of its own and takes responsibility for the care and feeding of the nation’s citizens. This is the European view, shared by our current president and Democrat leaders.
The alternative view is that freedom and responsibility begins with individuals. Free and autonomous citizens direct their own lives, create wealth and employment, and finance government to provide protection, domestically and internationally.
The machinations going on now with the so-called congressional “Supercommittee” are essentially a coming attraction – a sneak preview if you prefer – of next year’s election.
These 12 members of Congress – 6 from the Senate and 6 from the House – are charged with coming up with a plan for $1.5 trillion in deficit reduction by November 23. If they don’t, $1.2 trillion in automatic cuts will be triggered, divided between defense and domestic spending.
Let’s recall that this is the result of Republicans earlier this year refusing to automatically sign off on an increase in the authorized debt ceiling for the nation.