Heads-Up, Kerry

The lead of an excellent article on the always-superb Brussels Journal blog:

Europe’s Ailing Social Model: Facts & Fairy-Tales:

Europe’s social disaster is unfolding while the rest of the world is booming at its fastest rate in three decades. 2004 and 2005 were record years for China and India, which have double-digit growth rates, and for the USA, which fully enjoys the benefits of globalization. The world’s economy is booming at an average rate of over 4%, but Europe’s pgrowth has stagnated at an inflated 1.5%.

Why is Europe performing so poorly? Europe’s deficient performance is incompatible with its huge potential as the world’s largest single consumer market. Its slow growth contradicts its unequalled industrial productivity and infrastructure, its outstanding education level and labour ethics, its favourable climate, “fair business” morality, and not in the least its tremendous potential provided by the opening of the iron curtain. Obviously Europe’s fairy-tale is not materializing. Nor are the inflated expectations prognosticated by Europe’s political elite at the launch of the Common Currency and the Lisbon Agenda.

This article contains a lot of interesting information about the current European economic situation, and how it got there. Basically the situation in Europe is bad and it’s deteriorating. The government bureaucracies are actively hiding the degree of trouble they’re in; no surprise there. What really got my attention, though, is the analysis of how Europe got into this sitaution — and the close parallels Europe’s recent past and the current U.S. situation. And of course, if the liberal Democrats have their way, we’ll be even more like the Europeans.

One example of what I mean: the article cites the almost unbelievably large size of Europe’s unfunded public debt and pension liabilities. For some countries, these unfunded liabilities are three or four times the country’s gross domestic product (GDP) — a staggering debt burden, and one that dwarves the U.S. debt and social security burden. How did this happen? Europe long ago adopted the pay-as-you-go pension model just like our social security, and now their aging population has increased to the point where the burden on the younger workers to pay for their retirees pensions (not to mention welfare) is stifling the countries' economies. They’re decades ahead of the U.S. on the aging phenomenon, but we’re headed that way — and for the same trouble, if we don’t do something about it. The article cites all the classic symptoms of a disintegrating economy, and finds them in today’s Europe. There are lessons for us (the U.S., I mean) in this European experience. If I were in the Democratic party, I’d be wondering about the wisdom of some of my party’s platform and rhetoric…

Another example: the changing prosperity rankings within Europe. On the chart at right you can see most of Europe slowly sinking, with the sole exception of Ireland, whose rankings have skyrocketed from 22nd to 4th in less than twenty years. If you know anything about what Ireland has been doing over the past 20 years, you already know why: they have the most pro-business environment in Europe, including low tax rates, incentives for businesses that locate in Ireland, and government initiatives (mainly pragmatic, focused eductation) to make their population better able to perform to today’s workplace. The result is very apparent from this chart — the Irish have gone from being emblematic of poverty to being the fourth most prosperous country in the world. More lessons there.

After reading this article yesterday, I sent an email to my state’s two Democratic Senators — both are notorious liberals — urging them to take a close look at this information, and to revise their positions on issues such as social security reform and education. I know there’s little chance of them modifying their positions (especially not Barbara Boxer, a card-carrying barking moonbat). One look at my blog and they’ll know that Karl Rove is controlling me through his mind-rays. But I can always hope…