Last week’s elections in France and Greece may spell disaster for the financial future of both nations. France elected an avowed socialist, one Francois Hollande, to replace more conservative Nicolas Sarkozy. Message? Forget fiscal austerity, spend, spend, spend.
Greece, that nation in perpetual chaos, decided it was better to elect the center-right New Democracy party (11 seats of 300 in parliament, which was a loss of 34 percent of seats held after the 2009 election, and the Socialist Party, which had controlled Green for decades, was only able to garner 14 percent of the votes cast. So the Socialists decided to form a coalition with the radical left, the Syriza Party, which opposes the terms of Greece’s agreement with its foreign lenders.
There in lies the problem: the leftist coalition in Greece and the Socialists in France want nothing to do with austerity, or curbing their appetite for entitlements, even though the results of such a mind set will lead to national bankruptcy for both nations. However, because France and Greece are tied inextricably to the European community, their fate may seal the fate for other European nations. If Europe fails to gain control of its economic infrastructure, it could case Europe and the world into a depression.
How does this impact the U.S.? Trade with Europe could, in essence, grind to a halt. That would further limit U.S. growth and have the potential to sideline more American workers as the U.S. economy struggles to climb out of its economic pit. More unemployment, home foreclosures and business closures could spell disaster here at home.
What’s the solution? It’s far greater than any one person could ever outline in a brief editorial. However, without spending cuts, lower taxes on individuals and businesses, one thing is certain — the U.S. will follow Greece and France into economic chaos and eventual disintegration.
Nobel winners for economics like Milton Friedman, Robert Lucas and Edward Prescott argue that the current Keynesian policies are counterproductive to long-term fiscal responsibility, whereas supply side economic policies and establishing rational expectations is more likely to put people back to work, grow the economy, fill the nation’s coffers full and generate business and industrial expansion.
It’s a safe bet that if we take our medicine now, it will be a much smaller pill to swallow, than if we wait, and remain on our current path ending up in a fiscal crisis like France or Greece.
Ultimately, it’s our choice. We elect the leaders that shoot square with us, or elect those who feed us a line that only leads to ruin. Believe it or not that does impact all of us.
—Keith Hansen
Comments (23)
Add commentMr. Hansen is consistent...consistently wrong
So Mr. Hansen thinks we should return to the failed "supply side" theory again? Should we remind Mr. Hansen what happened when we tried this economic theory before?
Reminds me of that old adage that our previous president could not get right:
"Fool me once, shame on you. Fool me twice, shame on me."
Mr. Hansen, we have gone down this "supply-side", "trickle-down" road before, and it was a disaster. An utter disaster. And BTW, how would Milton Friedman know that the current Keynesian policies are failing -- he is dead!
Voices From Beyond?
I don't know what economists Robert Lucas and Edward Prescott may have said on the subject, but it's unlikely that Milton Friedman will be commenting on "the current Keynesian policies" anytime soon, since Friedman died in 2006.
Zombie economics
just won't die.
Cheyenne43
on another thread minnesnowda knocks people from out of the area on here so go away.
Speaking of zombies,
up jumps fubadub. I live in the area genius. Maybe you should consider a move back to crackerland.
cheyenne43, thanks for the laugh!
You are sure to get fnb all shook up when you criticize Keith. Ironic, isn't it?
And I doubt Keith has read any economics textbooks lately, so using his usual sources, he has it all wrong.
The outa towners
embrace and giggle. That's OK though because everyone should have a little humor.
Hmmmm!
It does not matter who said what...if you spend more than you take in .....you will fail. Its really simple. What is going on today can be summed up in one word - disaster.
Spending vs Investing
There is a difference between "spending" money and "investing" that money. When you spend money to put a man to work, is that bad spending or wise investing? When you spend money to build a bridge or a highway or a dam or some other infrastructure, is that bad spending or wise investing?
Just ask the Eisenhower administration when they spent money on the national highway system. Or, ask the Kennedy/Johnson administrations when they spent money on the space program.
Those who want spending to be cut, please be specific. Social Security? Medicare? Education? EPA? and then what program. It is too easy to just say "cut spending". Someone you know, even you, may be affected.
Another old adage comes to mind:
"Be careful what you wish for, you might just get it".
Spending vs Investing
There is a difference between "spending" money and "investing" that money. When you spend money to put a man to work, is that bad spending or wise investing? When you spend money to build a bridge or a highway or a dam or some other infrastructure, is that bad spending or wise investing?
Just ask the Eisenhower administration when they spent money on the national highway system. Or, ask the Kennedy/Johnson administrations when they spent money on the space program.
Those who want spending to be cut, please be specific. Social Security? Medicare? Education? EPA? and then what program. It is too easy to just say "cut spending". Someone you know, even you, may be affected.
Another old adage comes to mind:
"Be careful what you wish for, you might just get it".
Spending vs Investing
There is a difference between "spending" money and "investing" that money. When you spend money to put a man to work, is that bad spending or wise investing? When you spend money to build a bridge or a highway or a dam or some other infrastructure, is that bad spending or wise investing?
Just ask the Eisenhower administration when they spent money on the national highway system. Or, ask the Kennedy/Johnson administrations when they spent money on the space program.
Those who want spending to be cut, please be specific. Social Security? Medicare? Education? EPA? and then what program. It is too easy to just say "cut spending". Someone you know, even you, may be affected.
Another old adage comes to mind:
"Be careful what you wish for, you might just get it".
Go ahead 007
post one more time!
France elected an avowed socialist, one Francois Hollande
and America elected Obama, two sides to the same coin!! Talk about spend, spend, spend.
The secret agent
stutters?
Cut 40 of the 47 job programs for a start.
Repeating something three times doesn't make it a fact.
If we have to explain the difference between spending and investing taxpayer's money to someone than they will
never understand it. Some brains understand the big
picture and some do not.
It is too easy to just say "cut spending"
If I could this would be my list of starting cuts!
1. Agricultural subsidies - Great idea 80 years ago. Outlived its usefulness.
2. Subsidies for biofuels - they should rise or fall on their own merit.
3. Department of Homeland Security - necessary aspects could be folded into Defense Dept..
4. Anything with the word "endowment" in the title.
5. Dept. of Labor - powerless to affect employment
6. Dept. of Education - Carter era payback to teacher unions
7. Dept. of Energy - They don't find or develop energy sources
8. "Public" broadcasting (PBS, CPB) subsidies
9. Home mortgage interest subsidies
10. Petroleum/Oil subsidies
well Denton you have to tell me
why you deleted my answer to eyolf's name calling, because I don't understand. I didn't call him a flipping idiot or anything else, I just called him out on calling posters names on here. I also mentioned my lawfull past and the fact that I don't live off the government dole. Please tell us all why this happened.
We (well, some of us) PAY for police
and fire protection so they are NOT entitlements. What are you talking about 2005?
Why don't you spin us another yarn about what you did back in the old days? I'll strum my dobro while I wait for you to make up a new story.
Eyolf,
"would eliminating the dept of education also mean eliminating public education?"
Absolutely Not!! Education is an area that is handled much better at the State level and the Federal Dept of Education should be on the chopping block.
As for Defense I think that there are many cuts that could be made that would not affect our National Defense.
I don't know what you're talking about now,
but you sure make up alot of stories and I'd bet your children taught you the big words you try to use on here.
Not all of us
sing the Gospel, we live it, unlike some mean people that pretend to be holy.
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