Stop the chain reaction

As economic crisis worsens, U.S. must avoid path similar to Europe's

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The main economic difference between Europe and America right now seems to be that Europe is simply closer to the point where it will run out of other people’s money.

Thanassis Stavrakis/ASSOCIATED PRESS
Trade union members in Athens, Greece, burn emergency tax notices during a protest against the government’s plans to suspend public servants on reduced pay. Greece is under pressure from creditors to meet deficit-reduction targets to receive continued emergency financing.

But America is following Europe’s lead anyway.

Benefit-laden social democracies in Europe are buckling as never before under the weight of public employee costs and unsustainable government goodies for their citizens. Bailouts and austerity measures – which the unions and others have bitterly contested in street demonstrations – have failed to halt what seems to be a chain reaction of financial crises threatening Greece, Italy, Spain and even the euro itself.

Even after much international intervention, writes the Financial Times, “Greece faces the prospect of being unable to make payroll and pension payments by October 10” without an infusion of cash. Ominously, but understandably, the European Union and International Monetary Fund are reluctant to just throw more money at Greece’s problem without concrete assurances of austerity reforms.

Greece, and a growing number of Western nations, are in the delicate spot of desperately needing to slash sovereign debt, but wary of restive publics, some of whom have already taken to the streets over the modest reforms put forth thus far.

New York City Mayor Michael Bloomberg warned last week of similar riots here as a result of chronic high unemployment. The notion isn’t at all far-fetched; we’ve seen some violence in American streets and businesses over virtually nothing – and the economy isn’t as bad as it might yet be. What happens when austerity measures hit here?

Further, the shaking in Europe already can be felt across the pond, in the stock market, in financial markets and even in worries over oil prices. U.S. Treasury Secretary Timothy Geithner reportedly warned in a closed meeting in Poland of the “catastrophic risk” from the Greek debt crisis.

And there’s the little matter of America not getting its own house in order. The president seems to believe that we’ve got a federal revenue problem, not a spending one – and Monday proposed taking another $1.5 trillion in taxes out of the economy. Ask our bailed-out European friends if all they need is more money. It hasn’t helped yet.

And the danger that few are admitting to in public is rampant inflation, if not hyperinflation, from the Federal Reserve’s multiple rounds of money printing, which devalues the money that’s on the market and in your pocket.

“We can’t just cut our way out of this hole,” the president said. Perhaps not; but cutting has to be a huge part of it. The first rule of holes applies: When you’re in one, stop digging.

It’s a lesson the Europeans are struggling with even more than we are. Isn’t it time we learned from them?

Comments (22)

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IsAnyoneAlwaysRight
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IsAnyoneAlwaysRight 09/21/11 - 12:10 pm
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Its not just the country that

Its not just the country that has a spending problem, its many of its citizens too. Spending money, borrowing money to pay for it and not paying it back!

We all need to start using our piggy banks and investing our hard earned and untaxed money wisely. In addition, those that are not disabled or elderly should also start earning a living wage and not relying on entitlements; they should also start paying their "Fair Tax" :)

shrimp for breakfast
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shrimp for breakfast 09/21/11 - 06:55 am
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I agree with you IAAR. You

I agree with you IAAR. You are absolutely correct!

Techfan
6461
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Techfan 09/21/11 - 07:22 am
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"The president seems to

"The president seems to believe that we’ve got a federal revenue problem, not a spending one – and Monday proposed taking another $1.5 trillion in taxes out of the economy." So money used to rebuild bridges, roads, schools, etc. takes money out of the economy? Where do they think it goes? Do they think the bridge fixing fairy swoops in to do the repairs, or does the funding go to contractors that in turn hire people in the area to do the work?

Rhetor
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Rhetor 09/21/11 - 07:22 am
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ACES, there truly is a

ACES, there truly is a serious problem with the budget, but your analysis is, as usual, wrong on the facts. Are you folks even reading your own news pages? The President has called for large spending cuts in addition to tax increases--much as Ronald Reagan did. Furthermore, inflation? Are you serious? Right now the economy is stagnant. Some prices are up, but many prices are 'way down. There is no inflation problem actually going on in real life, only in your fears. If the Fed were too print too much money, which they have not, inflation would become a risk, in which case they can reduce the money supply as quickly as they raised it. Once again, you write an editorial founded on fear and suspicion rather than information.

Riverman1
70660
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Riverman1 09/21/11 - 08:15 am
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What's interesting is the

What's interesting is the Democrats' emphasis the past few years that any budget cutting measures have to ensure those with money pay more than they pay now. The most efficient budget cutting plan can be presented and if doesn't have a measure of having those with money paying more as a means of redistributing the wealth to those who don't have as much, it will be met with vociferous objections from the President, Democrats in Congress and liberal commentators. The liberal tenet in these difficult economic times has become income redistribution above all else. That concept is interesting. It's been tried before in various places in the world.

billyjones1949
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billyjones1949 09/21/11 - 08:47 am
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All during your working years

All during your working years you should save some of your earnings no matter how small or big the amount. Over 47 years the time value of the money will be substantial. Too bad some do not see it that way and believe those that do owe them something. Everyone that works can save some amount. They just have to decide what they are willing to give up for security 40 something years later. Maybe it cigs, beer, movies, that new car, larger home but whatever it is they have to do it. Not the taxpayer they believe owes them and the government must do the same.

burninater
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burninater 09/21/11 - 08:56 am
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The liberal tenet in these

The liberal tenet in these difficult economic times has become income redistribution above all else.
---------
No, the tenet of the moderate majority is the basic understanding that the dramatic increase in wealth of the top one percent of Americans over the past two decades has had tremendously destabilizing economic consequences.

Tea Partiers can continue their Robin Leach wealth fetishism, but the other 99% of America is probably going to have different ideas at the polls. Populist uprisings in America have always been coopted by special interests, but I really didn't expect the Tea Party to become Zsa Zsa's lapdogs.

A little sad if you think about it.

Techfan
6461
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Techfan 09/21/11 - 09:28 am
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Of course all of the

Of course all of the Republican candidates said they would be against a plan that was 10 to 1 cuts over raising revenue.

hounddog
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hounddog 09/21/11 - 09:29 am
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Techfan, 'So money used to

Unpublished

Techfan, 'So money used to rebuild bridges, roads, schools, etc. takes money out of the economy?
In 2008 Obama said with the 800T stimulus, "We'll put people back to work rebuilding our crumbling roads and bridges." In fact, back then Obama said "we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."
So where did all the money go although I did see a few ugly signs by the roads. It’s amazing how the liberals will defend the moron no matter what.

harley_52
19546
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harley_52 09/21/11 - 09:50 am
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It's a mystery to many why we

It's a mystery to many why we keep following Europe's lead in something we can see unfolding right before our eyes. How can we possibly keep making the same mistakes as European countries even as we watch the results of their economic crises develop?

At some point, I don't know when, people will come face to face with the sad reality that it's not happening accidentally. That when Obama said he was going to "fundamentally change America" the plan was already developed and ready for execution.

Little Lamb
40179
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Little Lamb 09/21/11 - 09:53 am
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Wow! I was responding to

Wow! I was responding to justthefacts' question about not being able to view comments, and his comment disappeared. Did you delete it, justthefacts?

justthefacts
17994
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justthefacts 09/21/11 - 10:08 am
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LL, no I didn't.

LL, no I didn't.

FalseHopeLooseChange
5
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FalseHopeLooseChange 09/21/11 - 10:12 am
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81 percent of Americans (who

81 percent of Americans (who probably pay little or no income tax) suggest the richest 2 percent of rich people should pay more taxes to keep that 81 percent of Americans in the style of entitlement living they are accustomed to living in.

Someone said Obama is either lying or dishonest about taxing only the rich. I believe the (D) after his name indicates "Dishonest" more than "Democrat", but actually it's the same either way.

Techfan
6461
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Techfan 09/21/11 - 10:13 am
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It's mystery why we've

It's mystery why we've followed the same Republican plans since 2001 and 2003 and expect them to start working now.

FalseHopeLooseChange
5
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FalseHopeLooseChange 09/21/11 - 10:15 am
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In 9 days the Federal Budget

In 9 days the Federal Budget for the upcoming fiscal year kicks in. Anyone seen the budget yet?

harley_52
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harley_52 09/21/11 - 10:46 am
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Actually, I've seen two

Actually, I've seen two budgets for 2012 and heard about another. One has passed the House, none has passed the Senate, and one was just a speech.

So we start this FY just like the past two FYs.

Budgetless, thanks to the Democrats.

Little Lamb
40179
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Little Lamb 09/21/11 - 10:57 am
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Budget? The Democrats don't

Budget? The Democrats don't need no stinkin’ budget! Just spend on autopilot and stimulate the public sector unions.

justthefacts
17994
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justthefacts 09/21/11 - 11:10 am
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Even the writers at the NY

Even the writers at the NY Times ( David Brooks) are giving up on President Obama:
I’m a sap, a specific kind of sap. I’m an Obama Sap.When the president said the unemployed couldn’t wait 14 more months for help and we had to do something right away, I believed him. When administration officials called around saying that the possibility of a double-dip recession was horrifyingly real and that it would be irresponsible not to come up with a package that could pass right away, I believed them. I liked Obama’s payroll tax cut ideas and urged Republicans to play along. But of course I’m a sap. When the president unveiled the second half of his stimulus it became clear that this package has nothing to do with helping people right away or averting a double dip. This is a campaign marker, not a jobs bill. It recycles ideas that couldn’t get passed even when Democrats controlled Congress. In his remarks Monday the president didn’t try to win Republicans to even some parts of his measures. He repeated the populist cries that fire up liberals but are designed to enrage moderates and conservatives....This wasn’t a speech to get something done. This was the sort of speech that sounded better when Ted Kennedy was delivering it. The result is that we will get neither short-term stimulus nor long-term debt reduction anytime soon, and I’m a sap for thinking it was possible.

allhans
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allhans 09/21/11 - 11:33 am
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Well said. Now if all

Well said. Now if all the
'saps" would face the same reality, how much better it could be.

Jane18
12331
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Jane18 09/21/11 - 11:41 am
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Some of us could have told

Some of us could have told David Brooks of the NY Times this would happen. It really is a sad thing when so many people can be fooled by a 'smooth talker'(reminds me of the serpent(satan) in the Gardern of Eden).

Chillen
16
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Chillen 09/21/11 - 11:58 am
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Self Reliance is being bred

Self Reliance is being bred out of us by the U.S. Government. With this mindset, we will fail. It is inevitable.

Question 1. How long until it happens?

Question 2. Have you shored up your own "house" to become more self reliant so that you are ready when it happens? If not, I highly suggest you begin by following FEMA instructions - to have 3-6 months of food & water stored for your family. A few firearms & ammo wouldn't hurt either....

burninater
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burninater 09/21/11 - 01:59 pm
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IT IS MY OPINION THAT a

IT IS MY OPINION THAT a belief that social safety nets are inevitably breeding a population that is genetically incapable of exercising self-reliance and against which we must arm ourselves, IS SIMILAR IN NATURE to a belief that one must wear a tinfoil hat to protect oneself against perceived transmissions from Planet Zeebar. Please note that this statement is concerned with the similarity between TWO IDEAS, and in no way is intended to resemble any individual, past or present.

IT IS ALSO MY OPINION THAT listening to particular MEDIA PERSONALITIES in the PUBLIC DOMAIN who espouse such statements in the absence of any factual basis for such statements MAY make it difficult to view the world, as it exists, in a rational fashion. Again, note that this is an OPINION about the effects of a BEHAVIOR, and similarly in no way is intended to resemble any individual, past or present.

IT IS ALSO MY OPINION, and one may decide whether or not this is associated to my last two statements, that it is very funny that Glen Beck's new network, GBTV, is so similar to the acronym for the lesbian-gay-bisexual-transsexual community, LGBT, that some must inevitably hear LGBTV whenever one hears GBTV. If this latter point hurts the feelings of any hypothetical individuals, I apologize profusely but I cannot nullify the fact that such a funny association does, in fact, exist.

allhans
21955
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allhans 09/21/11 - 02:24 pm
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As I heard someone say

As I heard someone say earlier today, as long as there is a choice the people who are after freebies will vote for the person that offers them - those who make promises they never intended to keep.
(The believers keep looking but it's still not there.)

socks99
250
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socks99 09/21/11 - 05:04 pm
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The contrast between U.S.

The contrast between U.S. indebtedness, at near zero percent interest, and Greek debt that is serviced with rates in the teens and twenties is the difference between a 'sustainable' level of debt and an unsustainable level. For instance, at a certain lending rate ANY loan is unsustainable. The trend to watch is interest rates; the Fed really doesn't set those; the lenders and creditors set those rates.

Most liberal economists have assumed that the U.S., for instance, can borrow to stimulate the economy. Obviously, their philosophy would not be practical in Greece. Of course, Athens, Augusta, and very many other GA and U.S. cities and communities will take significant hits when federal cuts occur either voluntarily or because, say, our creditors or the IMF demand such cuts as a condition of future borrowing.

He who goes a' borrowing,
Will go a' sorrowing!

hounddog
0
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hounddog 09/21/11 - 05:29 pm
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Techfan, I'm still waiting

Unpublished

Techfan, I'm still waiting but I know you won't reply.
'So money used to rebuild bridges, roads, schools, etc. takes money out of the economy?
In 2008 Obama said with the 800T stimulus, "We'll put people back to work rebuilding our crumbling roads and bridges." In fact, back then Obama said "we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."
So where did all the money go although I did see a few ugly signs by the roads.

Riverman1
70660
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Riverman1 09/21/11 - 05:56 pm
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Burn says, "IT IS ALSO MY

Burn says, "IT IS ALSO MY OPINION, and one may decide whether or not this is associated to my last two statements, that it is very funny that Glen Beck's new network, GBTV, is so similar to the acronym for the lesbian-gay-bisexual-transsexual community, LGBT, that some must inevitably hear LGBTV whenever one hears GBTV."

Huh?? LOL. GBTV means something derogatory to some I suppose, but not many around these parts.

Riverman1
70660
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Riverman1 09/21/11 - 06:15 pm
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The entire Democratic thrust

The entire Democratic thrust is to enrage the population against those who have some money. They believe the poorer majority will vote to punish the minority. The wealthy already pay tens of thousands in taxes while a little less than half the people pay nothing. If we are going to allow the majority to take from the rich, will it stop here or will it be take everything they have. There's a reason American has safeguards in the Constitution so the majority doesn't run wildly unchecked.

Techfan
6461
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Techfan 09/21/11 - 06:15 pm
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Don't raise revenue, decrease

Don't raise revenue, decrease the deficit/debt by cuts only. BY ALL MEANS WE DON'T MEAN CUTS FROM OUR AREA!!!!!! Need money to deepen Charleston harbor? Republican Senator throws hissy fit and threatens to shut down government unless they get Fed $$$$$. A list of good Republicans form committee to make sure Augusta doesn't lose the cash cow at Fort Gordon:http://www.fortgordonalliance.com/board.html
Since, for the most part, the "red" states receive more in federal funds that are paid for by the "blue" states, I say it's time for the right wingers to put up or shut up. Same for "Billy World' who continues to use tax dollars to further his private businesses.

hounddog
0
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hounddog 09/21/11 - 06:35 pm
0
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Techfan, I'm still waiting

Unpublished

Techfan, I'm still waiting but I know you won't reply.
'So money used to rebuild bridges, roads, schools, etc. takes money out of the economy?
In 2008 Obama said with the 800T stimulus, "We'll put people back to work rebuilding our crumbling roads and bridges." In fact, back then Obama said "we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."
So where did all the money go although I did see a few ugly signs by the roads.

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