The further to the left or the right you move, the more your lens on life distorts.

Friday, October 22, 2010

Kick the Can

Our President and many of his supporters on the Left want to remake America as a social democracy in a European mold. At the same time, Europeans themselves have moved to curtail entitlements (France) and spending (England) in an effort to reduce ruinous deficits. Driven by the near financial default in Greece, each of these countries is enacting painful spending cuts and deficit reduction measures.

The Christian Science Monitor comments on England’s efforts:
British budget cuts unveiled today are the most severe in decades, promising to eliminate the country’s deficit in five years.

What lessons do they hold for the fiscally challenged United States?

The race to a zero deficit in London is faster than in almost any other Western capital. Indeed, President Obama has warned that cutting too quickly could crash today’s struggling economies in another recession ditch.

But British Conservative Prime Minister David Cameron and his Liberal Democrat coalition partner, Nick Clegg, are willing to take the risk. They’re cutting almost 500,000 public-sector jobs and slashing spending at government agencies by an average of 19 percent. Mr. Cameron, in the driver’s seat, and Mr. Clegg, right next to him, are up on two wheels as they round a hairpin turn that leads to fiscal probity.

The next five years will show whether they can pull this off safely. But even while that question remains hanging, two big conclusions can already be reached about this British experiment and how it might apply across the Atlantic.

First, it’s clear that where there’s political will, there’s a political way – even on a subject as contentious as reducing government spending.

Even before the British parliamentary elections in May, the leaders of the three main parties all campaigned on eliminating the country’s highest peacetime deficit by the end of the next parliament. They were scared into this position by the great Greek debt debacle of the spring, which roiled the international financial markets.

The Greek tragedy helped win voter acceptance in Britain, as has a generally even-handed approach to the cuts. No one is spared – not the banks (which will see a permanent tax based on the size of their balance sheets); not middle- and upper-income families (they will lose child benefits). The pension age will rise sooner than expected, affecting everyone.

It’s important for Americans to understand that the European leaders of social democracies (the epitomy of the “big government” solution championed by our President) have finally come to the conclusion that big government is unsustainable and that cuts (and the pain that ensues) are essential for national survival. Yet, MSM coverage of European problems has been sparse and almost never discusses the underlying budgetary reasons for unrest in Greece, France, Portugal, Spain, or the UK. It’s as if the MSM doesn’t want Americans to look down the road a few years and see themselves.

In order to avoid the problems that Europe now faces, we need to act now while solutions still exist and the pain they precipitate is manageable. Democrats and Republicans have to act now, but I suspect they’ll just kick the can down the road … again.