Right now all eyes are on presumptive GOP presidential nominee Mitt Romney’s choice for vice president, Rep. Paul Ryan (R-Wisc.), but there’s a pending crisis media is ignoring. That crisis will challenge the winner of the 2012 election in the U.S.
The crisis is replete with lessons for the U.S., but President Barack Obama will not heed them.
Der Speigel (Germany) ran a story on Monday that says it all, with the header, “Investors Prepare for Euro Collapse.”
The newspaper said “cross-border ban lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds.”
The U.S. has hefty debt like Europe, but our edge right now is that our “dollar’s structure isn’t in doubt.”
Sounds boring, right?
Europe didn’t get into the quagmire by default—the pending crisis is a result of leadership and policy.
In September, 2011, Dr. J.D. Foster, the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy with the Heritage Foundation, testified before Congress. The topic was “The European Financial and Economic Crisis: Origins, Taxonomy, and Implications for the U.S. Economy.”
The Heritage Foundation is an established think tank devoted to “free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.”
Foster said there were two “root mistakes” that led to Europe’s crisis. One was the adoption of a single currency “without the economic policy infrastructure necessary to protect it.”
The second root mistake will sound familiar to anyone concerned about the U.S. debt level and policies pushed by the administration of President Barack Obama. Europe’s crisis isn’t just a “matter of economic policy.”
“[T]here were prerequisites relating to harmonization of labor policy, commercial policy, environmental policy, and so forth, and absent these, it was imperative to harmonize fiscal policies.”
Europe, said Foster, adopted “a generous social welfare state without attending to the pro-growth policies necessary to sustain such a state in light of an increasingly competitive global economy.”
That, in a nutshell, sums up exactly where Obama is taking us.
Obama and other Leftist Democrats controlling the country at present have hampered productivity. How? Shutting down the Gulf in a single day in a knee-jerk reaction, shaking down companies like Gibson Guitars because of how bureaucrats interpret confusing, obscure laws like the Lacey Act, energy policy based on political favoritism (Solyndra) and pie-in-the-sky policy comprising alternative energy that is obviously not ready for the market, tax policy that will hinder growth because it will have a devastating effect on the upper middle class, increasing welfare on numerous levels including pandering in Mexico to increase food stamp enrollment in the U.S.
Kindly put, we have a president who simply was not prepared to lead during troubled economic times that might not have been so difficult had his party not chosen to pull the plug with great theatrics and fanfare shortly before the 2008 election. After all, Dems knew serious troubles existed in housing as well as in credit default swaps—their economic policies paved the way for both. Republicans made the mistake of ignoring conservative fiscal policy and they reached across the aisle to cooperate.
I often wonder how we might have fared had a less hysterical approach been taken to solving the U.S. fiscal crisis.
Business Insider provides a map depicting the global impact of a "Euro Area bank credit crunch." Note the U.S. impact—“slamming output by as much as 3 percent for the world's biggest economies.”
Obama has consistently sacrificed reality for ideology, and worse, spent the majority of his time on social issues and the ObamaCare tax bill that will annihilate an economic sector that is a large part of the U. S. economy. The patient will not benefit, by the way, and anyone who tells you differently should be viewed like a poisonous snake you come across during a walk in the woods.
The Romney-Ryan team is eminently more qualified to handle any crisis arising from Europe. And if you believe those who claim such a crisis won’t ultimately affect all of us, remember that snake in the woods.
Der Spiegel said:
“There is increasing anxiety, particularly because politicians have not managed to solve the problems. Despite all their efforts, the situation in Greece appears hopeless. Spain is in trouble and, to make matters worse, Germany's Constitutional Court will decide in September whether the European Stability Mechanism (ESM) is even compatible with the German constitution.”
(Commentary by Kay B. Day/August 14, 2012)
Related at The US Report