Breaking News from 1945
"Can Britain really overhaul the Germans?", asks the London Telegraph's Martin Vander Weyer, though as he notes, it won't be happening anytime soon -- "some economists foresee Britain leapfrogging France and Germany to become Europe’s biggest economy by 2030:"
In terms of its locomotive economies, there will be only two that matter, France and Germany; in the second rank, Italy and Spain will continue to wrestle with debt, joblessness, weak government and social discontent.
The Germans will be top dogs for many years yet. But they are not immune to low growth and dismal confidence in the rest of the eurozone. And their demographics look remarkably bad. The population is both ageing and set to decline in size. After two phenomenally hard-working, frugal post-war generations, it will be a miracle if the next is prepared to work even harder to keep the locomotive at full steam.
The French, meanwhile, believe themselves capable (according to one of their official forecasting bodies) of overtaking the Germans in terms of the size of their economy some time around 2040. But France under François Hollande is being dragged inexorably in the wrong direction by a bloated public sector, punitive tax rates and its citizens’ sense of entitlement to an expensive panoply of benefits. Even if Hollande is eventually succeeded by an ardent free-marketeer (a rare breed indeed across the Channel), there will be a huge amount of ground to make up. Hence the now widely held expectation that the UK will overtake France within this decade – the CEBR predicts that it will happen by 2018, but others think it could happen sooner.
And having recited some of Britain’s long-term weaknesses, let us not forget the things that work in our favour. Not being in the euro gives us competitive exchange rates when we need them, as well as control over interest rates. The flexibility of our labour market makes our companies more efficient, attracts foreign direct investment and reduces state welfare bills. And our relatively attractive tax rates have persuaded hundreds of thousands of French people to make their careers and businesses here.
2030 -- why does that year ring a bell? Perhaps because it's three years after this nightmare debt scenario highlighted by economics writer James Pethokoukis at the American Enterprise institute last year would have played itself out back here in the States -- or what will be left of them:
My baseline case has been that Obama has no interest in being Clinton 2.0, the Debt Cutting President. He wants to be FDR 2.0, the Expanding Welfare State President. He wants that to be his legacy. Let Ryan or Chris Christie or Marco Rubio be the Austerity President in 2017. And what does Geithner care? He’s on his way out this year. At one point during the hearing, Ryan brought out this chart illustrating the impact of the Ryan debt plan, the one Geithner said “we don’t like”:
And here was the exchange between Geithner and Ryan, after Ryan pointed out the terrifying budget baseline (in red):GEITHNER: You could have taken [the chart] out [to the year] 3000 or to 4000. [Laughs]
RYAN: Yeah, right. We cut it off at the end of the century because the economy, according to the CBO, shuts down in 2027 on this path.
And that’s no joke, Mr. Geithner.
And speaking of socialism, nationalized healthcare and exploding debt, Britain might have overhauled Germany much sooner if its left wasn't too busy after World War II overhauling England with plenty of nationalized socialist ideas of their own:
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In 2011, Thomas Friedman of the New York Times memorably pondered, “Can Greeks Become Germans?”, which James Taranto filed under “Breaking News From 1941″ in his “Best of the Web” column in the Wall Street Journal, the inspiration for our headline above.
But to answer Friedman's query, can Greeks become Germans? Why not -- England already has; many of her postwar socialist schemes were of Prussian origin, ironically enough.