But here’s the problem: the muttering you hear is from the world’s bond markets. The trillion dollars just scrounged together by those seeking to “save the euro” is just a down payment. The problem is, it is a down payment that cannot be followed up with the balance. This latest exhibition of super state meddling is not a solution to any economic problem: it is just an extension of the problem. Two problems, actually. The smaller problem is the euro, a fictional currency created and maintained by a utopian act of will. I’ve always disliked the euro, partly, I admit, on aesthetic grounds. Europe is a poor place, aesthetically, without the franc, the Deutschmark, the lira. But there are also some good economic reasons to be skeptical of this mad money. The euro was supposed to make business transactions so much easier by relieving European countries from the burden of currency conversions. In fact, as the example of Greece just demonstrate, it exposes the stronger players to potentially fatal infection by the more feckless members of the “European community.” When euro banknotes were first introduced in 2002, I predicated they wouldn’t last a decade. Let’s see if I’m right. I’ll bet you a British pound that Angela Merkel has been thinking fond, nostalgic thoughts about the Greek drachmas recently.
What’s going to happen to the euro is a big problem. Far bigger, however, is what’s going to happen to the unsustainable government apparatus that has grown up to coddle the citizenry of the West. For year now, dour voices have been warning that Europe’s “generous” (i.e., irresponsible) welfare state couldn’t last. It was predicated on two sorts of growth that just weren’t there: population growth, on the one hand, and economic growth, on the other.
“Annual income $5 trillion euros, annual expenditure $5.5 trillion euros, result misery.” Big time, as Dick Cheney apostrophized in another context. The last time I looked, EU members were supposed to keep their deficits to about 3% of GDP. This year, the UK’s will be in the scrotum tightening neighborhood of 12%. In 2009, Greek ran a deficit of 13.6%.
Things are not looking better in California, Illinois, New York, and many other American states. As for the federal deficit, there is an entire governmental department working on creating enough zeros to represent the obscenity. Bottom line? The sojourn to Shangri-La is coming to an end. The train is going into the yard. All off, please. Look around for your possessions and exit as quickly and safely as you can.