By Douglas V. Gibbs
Socialism has caught up to Europe, and one by one the European nations are dropping like flies. Greece is on the verge of collapse as their debt has been downgraded to "junk." Portugal is struggling as their stock market wavers, and Spain's credit rating with Standard & Poor's has been downgraded from AA+ to AA. The downgrade is yet another sign of Europe's troubles, and the future of America, should the United States continue its move away from capitalism, and towards ever increasing debt and expanded government policies, will be sure to follow.
Spain, in an appeal to the world market, proclaimed it was working to cut its public deficit through a proactive plan of fiscal consolidation and of deficit reduction. Promises, however, does not turn an economy around, nor does it reduce national debt. Only acting responsible, and moving away from the socialist model, will save the European nation from suffering that same chaos that Greece is now in the midst of.
The head of the International Monetary Fund is warning that the crisis in Greece could spread throughout Europe. With socialist policies running rampant throughout the European nations, that prediction is probably one that will come true.
Bail out packages are creating resentment. In the case of Greece, the German public is looking at paying €8.5 billion, and Greece will not be in a position for a long time to pay the money back, if ever. With Spain and Portugal on the heels of Greece, it makes one wonder how long before the nations of Europe begin to drop like economic dominoes, leaving Europe in a depression that could turn out to be worse than The Great Depression of the 1930s.
One thing is for sure. Greece is no longer in a position to borrow money, and Spain is nearing that same point. With Portugal also dangerously approaching the tipping point, struggling stock markets, a risk of insolvency, and bad debts could infect the rest of Europe.
In the wake of the collapsing European economies, The President of the European Central Bank, Jean-Claude Trichet, told Forbes that global governance is extremely necessary if we want to prevent another financial crisis. Trichet emphasized that politicians, economists, and financiers must work across the Atlantic and collaborate on methods to create an international set of standards.
If socialism on a national scale collapses national economic systems, one must ask, then, what would following the same policies on a global scale cause?
Trichet's belief that global governance is the only salvation is both dangerous economically, and absolutely insane when it comes to consolidating so much global power into one place free for the taking by any ambitious oligarchy. It is akin to putting all of your eggs in one basket. Should the global system fail, everyone is doomed. A global financial system is not one that would be resilient, but rather a system that would be more susceptible to corruption and power hungry bureaucrats.
Ultimately, the systems on the verge of failing cannot be fixed by tossing around more money. Either those systems cut their spending, and encourage economic activities that revolve around private incentives and self-reliance, or the systems are doomed, and the nations will collapse into complete chaos.
Unfortunately, it seems the latter is going to be the inevitability as the socialists scramble for more power, and the people continue to demand the very entitlement programs and civil service programs that put them into the dire straights they are experiencing in the first place.
-- Political Pistachio Conservative News and Commentary
Spain downgrade sparks European sell-off - Times Online
ECB President Favors Global Governance - Forbes
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