Europe

American's tend not to watch political developments in Europe. That's a shame, because they are a harbinger of what might happen in the U.S. in the not-to-far-distant future.

Just yesterday, the nation's Social Security and Medicare Trustees reported that the money for Medicare and Social security will run out in 2033.* Only ten years ago, Democrats in Congress argued that there would be "no problem" until 2075. In reality, I suspect insolvency will occur sooner that 2033, unless we act now!

But back to Europe.

In France, a socialist candidate, Francois Hollande, out-polled the current French President, Nicolas Sarkozy, on a platform of more spending and higher taxes. 28 percent of the French public decided to disregard their nation's slide into insolvency and continue cradle-to-grave entitlements that simply can't be sustained. A significant minority of the French are used to these entitlements and demand that they continue, even if it causes their country to fail.

Investor's Business Daily comments:

The political developments in France and the Netherlands explain why major European stock markets plunged 3% to 4% on Monday, and the euro slumped.

France's Hollande has said he won't accept austerity. Indeed, he thinks the EU's problem is it doesn't spend enough — a position starkly at odds with fiscal sanity.

This puts him on a collision course with Germany's Angela Merkel, who is seeking deep, permanent cuts in EU budgets and whose nation is the only one in Europe not in a fiscal crisis. Only one vision can prevail.

Worse still, just like President Barack Obama, Hollande wants to sock high-income French with a 75% income tax rate.

If Hollande thinks this will serve as a model for the rest of the EU, he may want to check his own country's recent history. Former President Francois Mitterrand, also a socialist, tried to spend and tax his way to socialist nirvana back in 1981 and 1982. The economy nearly collapsed as investment fled overseas.

The U.S. would do well not to go down this path.

Today, we have $16 trillion in debt, which is more than 100% of our GDP. Thanks to Obama's spending, which might make even Hollande blush, we're adding debt at a rate of more than $1 trillion a year.

The President and his supporters have often used the European model as their guide. If allowed to continue along this path, the United States will follow in the footsteps of Greece, then Italy, then Spain, and now France, The Netherlands, and other EU nations who have adopted the social democracy model.

To say that the President and his acolytes in politics and the media are being fiscally irresponsible is a gross understatement.

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* According to one Media Watchdog group, "Over a combined total of nine and a half hours of programming, CBS, NBC and ABC allowed a mere 72 seconds of coverage to the news, Monday, that Social Security will go bankrupt three years earlier than previously expected. ABC's World News and NBC's Nightly News skipped the subject entirely."