And what caused the "BOOM!" that started the dominoes falling?
Decades of cradle-to-grave entitlement programs, overly generous pensions taken at younger and younger ages (early fifties), "13th and 14th month salaries" (i.e. huge bonuses) paid to public employees - all leading to enormous deficits and unsustainable debt.
If there's a lesson to be learned, it's this: there really are limits to government generosity. And as we've seen through the riots in Greece, when too many people become too dependent on that generosity, there's hell to pay.
Germany was hit by the recession too, and yet they won't have to tighten their belts nearly as much as the "PIIGS" (Portugal, Ireland, Italy, Greece and Spain). If the Germans weren't joined at the hip to these countries through a common currency (the Euro), the impact would be even less. As it is, they have to help bail them out or suffer the consequences of an unstable currency.
Overly generous government programs only work as long as the "producers" outnumber the "moochers and looters" (to use Ayn Rand's somewhat derogatory terminology). When the economy turns bad, there's less wealth to tax. You can increase the tax rate on the producers, but that stifles growth, which shrinks your tax base even more.
Ted, do you think there are any limits at all to the generosity of government? Sometimes I get the impression you see the recession as some sort of economic storm that will blow through on its own, returning us all to sweetness and light in a few months.
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Political Cartoon is by John Darkow in the Columbia Daily Tribune.
And what caused the "BOOM!" that started the dominoes falling?
ReplyDeleteDecades of cradle-to-grave entitlement programs, overly generous pensions taken at younger and younger ages (early fifties), "13th and 14th month salaries" (i.e. huge bonuses) paid to public employees - all leading to enormous deficits and unsustainable debt.
If there's a lesson to be learned, it's this: there really are limits to government generosity. And as we've seen through the riots in Greece, when too many people become too dependent on that generosity, there's hell to pay.
Don't you think the recession might have had something to do with it?
ReplyDeleteGermany was hit by the recession too, and yet they won't have to tighten their belts nearly as much as the "PIIGS" (Portugal, Ireland, Italy, Greece and Spain). If the Germans weren't joined at the hip to these countries through a common currency (the Euro), the impact would be even less. As it is, they have to help bail them out or suffer the consequences of an unstable currency.
ReplyDeleteOverly generous government programs only work as long as the "producers" outnumber the "moochers and looters" (to use Ayn Rand's somewhat derogatory terminology). When the economy turns bad, there's less wealth to tax. You can increase the tax rate on the producers, but that stifles growth, which shrinks your tax base even more.
Ted, do you think there are any limits at all to the generosity of government? Sometimes I get the impression you see the recession as some sort of economic storm that will blow through on its own, returning us all to sweetness and light in a few months.
We do have a basic disagreement. You blame the recession on government. I blame it on unrestrained corporate greed and fraud.
ReplyDelete