The Spanish Economic Ministry denied there’s been a surge in withdrawals from the nation’s banks, while Spain’s Prime Minister warned that borrowing costs could reach “astronomical” proportions over fears about the weakness of Spain’s financial institutions.
Greeks have been taking their savings out of banks, with nearly a third taken out during this year’s first quarter. Since May 7th, at least 700m euros have been withdrawn from Greek banks. Uncertainty over Greece’s exit from the eurozone is stirring global fears about Europe’s monetary future.
France’s new socialist government will not ratify the European Union’s fiscal pact unless it contains stimulus provisions. “The treaty will not be ratified as is and that it must be completed with a chapter on growth, with a growth strategy,” said France’s new Finance Minister.
With a number of European countries again in recession, with zero growth in parts of the eurozone this year, calls for stimulus measures within Europe are growing.
Europe’s ideas about stimulating the eurozone economy will only lead the continent into deeper trouble. Taxing the rich, hiring more government employees and lowering the retirement age is not the way to create sustainable, long-term economic growth.
No matter how much money is raised through tax hikes, a portion of those funds are lost before they’re re-injected into the economy due to the cost of government overhead. That puts the stimulus process on negative footing before the discussion even turns to how the money’s to be spent, be it sending out welfare checks, funding food stamps or repaying political supporters by rewarding them with “shovel ready” government contracts.
Not that America should be overly concerned with Europe’s fate. Thanks to their scrupulous adherence to the dictates of political correctness and secular multiculturalism, they’ll be slaves to Sharia law in a few decades anyway.
America must learn from Europe’s mistakes.
Following down the path of taxing the rich, creating a cradle to grave entitlement society and continuous deficit spending in attempts to sustain a socialist utopian fantasy will destroy any country, including America.
Punitive taxing of the rich is a non-starter. Class envy warfare might be effective, emotionally charged rhetoric able to stir up a politician’s voter base, but it’s illogical. Were “those evil rich who don’t pay their fair share” in the U.S. to be taxed at a 100% rate, the revenue collected by the IRS would fund spending in Washington DC for a couple of months. Not years, a couple of months. How then would the government propose to pay for the rest of the year’s deficit spending? And after taxes have destroyed the wherewithal of the well off, who would then be taxed? Besides, rich folks, especially those engaging in successful business practices (as opposed to achieving wealth through inheritance or by winning the lottery) didn’t succeed because they’re imbeciles. If a country’s tax rates are unfavorable to their business, they leave that country and take their businesses, jobs and money with them. It’s not exactly climbing out on a limb to predict that a 100% tax rate would fall within their unfavorable category.
Creating a cradle to grave entitlement society is the best way to destroy initiative. It’s said that if you give a man a fish, you feed him for a day. If you teach that man to fish, you feed him for a lifetime. Imagine a group of one hundred people where only five know how to catch fish. In order to feed everyone every day, those five people would each need to catch twenty fish per day. How long would it take before some, if not all of those five fishermen grew tired of sharing their wealth with the other 95% and gave up fishing? On the other hand, if all the people were taught to fish and expected to catch their own, no individual would be responsible for catching more than one fish per day. If they managed to catch two fish per day, they will have created a surplus of wealth that benefits the entire group.
Continuing massive deficit spending obligates any nation’s budget to two unsavory alternatives. One is borrowing, which results in having to pay the money back with interest. Not only does being obligated to make those payments leave less money available to pay the cost of conducting regular business, it profits the lender to the detriment of the borrower. The other alternative is to devalue the currency by printing money, leading to inflation, which if left unchecked destroys the value of the country’s currency. Political instability caused by inflating the currency of the Weimar Republic led to the rise of Adolph Hitler. Shortages of hard currency led to the collapse of the Soviet Union.
America has a choice to make. Shall it follow the smaller government design, complete with reduced spending, lower taxes, a growing free market economy and individual freedom preferred by the law abiding, peaceful Tea Party, whose lineage can be traced back to 1969 when the world joined Americans in viewing the pinnacle achievement of human history, the televised first moon landing? Or should America follow the design of the law breaking, violent Occupy Wall Street, who’s lineage can be traced back to Woodstock, the other big event of 1969, where unbathed people ingested copious amounts of drugs and rolled around in the mud having sex like animals?
As Conservative innovator and outspoken leader Andrew Breitbart said at the 2012 CPAC Convention in February: “I don’t care who our candidate is. I haven’t since the beginning of this. I will march behind whoever our candidate is because if we don’t, we lose. There are two paths: one is America, the other one is Occupy. Anyone that is willing to stand next to me to fight the progressive left I will be in that bunker, and if you’re not in that bunker because you’re not satisfied with this candidate, more than shame on you, you’re on the other side.”