Thursday, July 1, 2010

Europe Discovers Reaganomics

Is Europe embracing "The Gipper"?

Who would have thought it possible? Europe is preaching the “Gospel of the Gipper.” Faced with soaring debt, out of control public sector employees and having just dodged a bullet with Greece and Spain, the European members of the G8/G20 have suddenly discovered Reaganomics.

In Toronto the quaint Obama “Keynesian concept of the government needs to spend our way out of an economic slowdown meets the European we tried that before and it doesn't work.

In a recent phone call where President Obama was trying to round up world support for his administration’s massive spending increases, he ran into the Berlin Wall. German Chancellor Angela Merkel brushed off President Obama’s call to boost public sector spending as both leaders prepared for the Group of 20 talks.

Merkel told Obama in a phone conversation that cutting government debt is “absolutely important for us,” She further told the American president Germans are more likely to spend money if they feel the government “is taking precautions” to ensure solid finances.

United Kingdom Prime Minister David Cameron joined the chorus. “I believe we must each start by setting out plans for getting our national finances under control.” In an open letter to six million public sector workers he asked them to “help me spend less.” His budget this week calls for a 25 per cent spending cut in all government departments except health and international development.

Even France has gotten it. Realizing it can no longer provide the level of benefits to its aging population this week proposed raising the retirement age to 62 from 60. As would be expected, this is France we’re talking about here, the public sector employees have gone out on strike. If Reaganomics continues to spread across Europe, they may want to point out how the Gipper dealt with the air traffic controllers.

In the ultimate irony, as America plunges headlong toward “European style” health care, the Europeans are starting to have second thoughts. The first demand the International Monetary Fund made on Greece before they would drop the check in the mail – privatize your health care system.

Ronnie has got to be smiling.

by Foster Friess
Wednesday, June 30, 2010

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