Tuesday, June 22, 2010

What Would Fiscal Austerity Look Like In The U.S.?

Excellent June 16th Cafferty-file clip pondering the question: are EU austerity measures a sign of things to come here in the U.S.?

Running out of money and drowning in debt. Governments across Europe are cutting, cutting and then cutting some more... and the pain is palpable.

CNNMoney.com reports what fiscal austerity looks like... and countries including Greece, Italy, Spain, Hungary, Portugal, and Ireland are living through it now.

These governments are implementing a wide range of tough measures - and in the process imposing a dramatic change in lifestyle for their residents.

These include - freezing public-sector wages and state spending, cutting jobs, social welfare benefits, and state and local budgets.

Some governments are raising retirement ages and reducing pension payments... others are increasing taxes - from the value-added tax to higher taxes on gasoline and cigarettes... and income and profits taxes.

It gets worse - with the added concern that economic instability will lead to political unrest.

Top European officials are warning that Democracy could "collapse" in Greece, Spain and Portugal unless they take urgent action to fix the debt crises. They worry these countries could fall victim to military coups or popular uprisings.

Meanwhile on this side of the Atlantic Ocean, as America's national debt tops $13 trillion - there's no indication the federal government will stop spending anytime soon.

Just this week, President Obama asked for another $50 billion in emergency aid to state and local governments.... but no word on how to pay for it.

At the same time some state governments, which are actually required to balance their budgets, are threatening to cut services if lawmakers can't agree on spending cuts.

Cafferty's question to viewers: What would fiscal austerity look like in the U.S.?

I think one of the most accurate comments was:

'those who have not prepared for the worst will suffer the most. It would come down to a simple matter of survival of the fittest and it would be brutal since the government has made a habit of propping up the poor with programs that would have to be curtailed. America would clearly become a nation of haves and have-nots. And, as a result, there would be chaos and riots unlike anything America's ever seen."


Jb said...

Thanks Randy. I think those of us visiting your website have seen this coming for quite some time.

I'm 'prepared' but often wonder what I'm missing or not thinking about. Diversification is my strategy, ie: cash and PM's, freeze dried food and a garden + chickens, etc.

But I can't get my neighbors or family to pay any attention to this at all. I worry that one day my family will show up at my door hungry.

myself said...

Great commentary Randy. I've been getting ready for 5 years. The thing that I keep telling people is that their main worry is the people who have NOT been preparing. You can't feed them all. You can't kill them all. You have to get away from them.
GOV has promoted itself as the ultimate "security blanket" People have abdicated their responsibility to make provisions for bad times. The "nanny-state" mentality has erased our ability , and in many cases, our desire, to look after ourselves.
Any species that doesn't pay attention to self-preservation is a prime candidate for "thinning" One must be out of sight during this thinning process.

Anonymous said...

As I listened to this clip, I was waiting to her about no more bailouts and utting corporate welfare - 2 of our government's big expenditures lately. I agree that government spending needs to be drastically cut, but our out-of-control spending is driven in large part by well-connected lobbyists who fund incumbents' campaigns in exchange favors that only benefit those who sucessfully lobby Congress.