I wrote a detailed blog post yesterday, showing that European governments have been very reluctant to restrain the burden of government spending.
Part of the problem is that the debate in Europe is a no-win exercise, pitting proponents of higher taxes (which is largely how Europe’s political elite defines “austerity”) against proponents of higher spending (notwithstanding a long track record of failure, the Keynesians have come out of woodwork and are claiming that bigger government stimulates “growth”).
With these terrible choices, no wonder the continent has such a bleak future.
Here’s a recent appearance on Fox Business News, where I discuss these topics.
I explain that Europe can grow and prosper, but only if politicians are willing to reduce the burden of government spending and lower tax rates.
But don’t hold your breath waiting for that to happen.
P.S. Americans shouldn’t get cocky. Our long-term fiscal outlook is equally grim. We can avoid a crisis if entitlement programs are reformed, but that obviously isn’t going to happen anytime soon.