To
say that the economy is anemic is an understatement – GDP is 1.9 percent, only
69,000 jobs were “created” in the month of May and unemployment is at 8.2
percent. Unemployment figures are constantly revised, massaged, and
misrepresented. No wonder, citizens no longer trust their government, they fear
it.
Congress,
who controls the purse strings, has done little to curtail the out of control government
spending and waste on bankrupted “green energy” that electrifies nothing except
campaign sound bites and the die-hard environmentalist left.
Last
week President Obama signed the reauthorization of the Export-Import Bank,
raising its lending authority by 40 percent to $140 billion. The Export-Import
Bank guarantees loans from U.S. banks to foreign businesses that buy U.S. made
products. Conservatives in Congress criticized
the move and “assailed it for meddling in the free market.”
Legislators
did not raise the most obvious question before approving the $140 billion
giveaway. Why do we give loans to foreign corporations to buy American products?
Do we have money to subsidize corporations, foreign or domestic? Why has Obama
the Senator called the Import-Export Bank “little more than a fund for
corporate welfare” during the 2008 campaign and promised to eliminate it, yet has
reauthorized 40 percent more taxpayer dollars?
For
the past three and a half years, the manipulated and constantly revised (a week
or month later) unemployment rate has been above 8 percent. The real number is
far worse, in the 11-14 percent range. Although the left maligned President
George Bush on a daily basis, under his presidency full employment was always in
the 4.5-5 percent unemployment range.
A
sustained doubling of the unemployment rate is devastating to those who have
lost jobs and for our economy. However, if you ask Spain, Greece, Italy,
France, or Portugal, they would gladly trade places with us. Their full
employment is an unemployment rate of ten percent and higher. This happens because
their national priorities are stacked in favor of outrageous social programs
and unionized labor, while the population becomes more slothful and happy to
live on government handouts.
United
States spends 14.8 percent of GDP on welfare programs and has not reached the welfare
expenditures level of European socialist countries. France spends 28.5 percent
of Gross Domestic Product (GDP) on welfare, Spain 21 percent, Greece 24.3
percent, Italy 24.4 percent, and Portugal 21.1 percent. There are European
nations that spend more on welfare, such as Denmark (29.2 percent), Sweden
(28.9 percent), Germany (27.4), and Belgium (27.2) but the economic situation in
these countries is substantially different. (Statistical data source: NationMaster.com
as quoted in Forbes)
German
Chancellor Angela Merkel is vilified for her efforts to impose austerity
measures on countries whose economies necessitate bailouts from the European
Central Bank and the International Monetary Fund. Greece rejected the idea
through vigorous and violent demonstrations, while 47 Greek parliamentarians
walked out of meetings upon hearing about the type of austerity measures they
would have to approve. France rejected austerity by electing a socialist
president who promised more socialism, more spending, and more bureaucratic job
creation. President Francois Hollande reneged on the austerity agreements his
predecessor, Sarkozy, had cobbled with German Chancellor Angela Merkel.
Critics
point out that Germany’s five percent unemployment rate makes it unfair and
socially unjust for Angela Merkel to impose drastic welfare and pension
benefits cuts in Greece, Spain, Italy, France, and Portugal when their respective
unemployment rates are so much higher. In Spain, the overall unemployment has
reached 25 percent, while 50 percent of young people, including recent college
graduates, cannot find jobs and must leave Spain to seek employment.
Joel
Kotkin describes them most vividly. “In Madrid you see them on the streets,
jobless, aimless, often bearing college degrees but working as cabbies,
baristas, street performers, or – most often – not at all. Call them the
screwed generation, the victims of expansive welfare states and the massive
structural debt charged by their parents.” (The Daily Beast, June 4, 2012)
A
young man with a psychology degree, who is working in the grocery store where I
shop, was complaining one day that he could not find a job. A quintessential
liberal with the agenda of environmental sustainability, social justice and
equity, the mantra of the left, it has not occurred to him that the “hope and
change” he voted for, his overt distaste for capitalism, love for communism and
the murderous Che Guevara whose t-shirt he is wearing under his uniform, is
what is dooming his prospects of finding a decent job. He bought his college advisor’s
empty promise of a six-figure salary upon graduation, his professors’ socialist/Marxist
indoctrination, and is now facing Realville.
European
demonstrators argue vociferously and increasingly violent that austerity and
budget cuts are the primary reasons for their national economic crises. They
believe that the largesse of the government welfare system spending has nothing
to do with the government running out of money. As former Prime Minister
Margaret Thatcher had said, “the problem with socialism is that eventually you
run out of other people’s money.”
Taxing
the rich in France at the proposed 75 percent rate will not solve their
financial difficulties for long; it will simply prolong the inevitable. Even
confiscating everyone’s wealth will only pay the debt and cover the deficit for
a few months at best.
Lavish
spending is unsustainable when the economy grows too slowly and the population
is not having enough babies. There are insufficient wage earners who pay taxes
to support retirees who derive benefits and pensions from those taxes.
Demographically
speaking, the population replacement value in the U.S. is still within normal
range of 2.1 newborns per woman if we count the illegal aliens’ newborns. Without
illegal alien births, the U.S. population replacement value is 1.9. Many European
Union nations have even lower population replacement values, below 1.4 newborns
per female.
According
to Joel Kotkin, wealthier countries in the north such as Germany, Denmark, and
Sweden, “have offset very low fertility rates and domestic demand by attracting
migrants from other countries, notably from eastern and southern Europe, and
building highly productive export oriented economies.” (Forbes, May 31, 2012)
Unemployment
among young people in Greece and Spain has reached the fifty percent mark. Many
have left Spain for employment opportunities elsewhere. Young people have
postponed having babies, preferring instead to buy homes, vacations, and luxury
goods. The birth rate in Spain dropped to the lowest level of 1.4 from the
previous four children per woman fifty years ago.
Joel
Kotkin argues that a Nordic welfare state is sustainable because “companies and
the labor force are productive and highly skilled,” while Spain, Greece, Italy,
and Portugal derives most income and revenue from tourism. By 2021, every
working person in Spain will support six students and retirees. (Source: National
Institute for Statistics as quoted in Forbes)
Implementing
national policies that promote affordable housing for families, reduced
taxation for married couples, and higher birth rates instead of abortions, should
be a priority for countries with a penchant for lavish spending.
Since
Roe V. Wade, millions of babies in the U.S. have been aborted. It is a human
tragedy with economic ramifications that will affect our labor force and the
future of our country. We can afford right now to import cheap labor from
Central America or outsource it to China. Would that be enough in the future to
support the ever-burgeoning welfare class in this country? What will happen
when we reach the tipping point of no return of the European style demographic
decline?
