It depends on whether we follow their misadventure or learn from it.
Scarcely after it began, the supposed Era of Austerity came to an end this past weekend in Europe, as voters in both France and Greece rebelled against fiscal sanity in favor of more spending and more socialism.
One might have expected that of Greece, which was the first fat-pension, big-spending European Union nation to dive off the fiscal cliff; they’ve been thrown every lifeline possible since then, but have steadfastly refused to participate in pulling themselves out of the hole they’re in.
Until now, France had been one of the grown-ups in the room. This past weekend, though, voters replaced the sensible Nicolas Sarkozy with socialist François Hollande – who has called for more government spending, a lowered retirement age and 75 percent taxation of the rich.
It’s as if a falling person were trying to push off against the sky to accelerate the fall.
“You can vote to change
leadership,” said syndicated columnist Charles Krauthammer, “but you can’t vote against mathematics.”
“The election results,” writes American Enterprise Institute scholar Arthur Herman, “prove that Europe’s voters don’t know they’re committing suicide — or don’t care. The only pertinent question is what will take Europe’s place once its political union, and its worthless currency, both wind up on the ash heap of history.”
Indeed, it is difficult to see how increased government spending can help things, in France or anywhere else. If deficit spending, along with high taxes, could have created prosperity, Greece would be the model. Instead, Germany and other responsible entities have, to this point, kept the big-spenders afloat.
Why should German taxpayers or other investors agree to continue funding early retirements, puffy pensions and generous public benefits in failed socialist states? How long can either the euro or the European Union remain intact under such unreasonable demands?
Noting that the EU came into being with the Maastricht Treaty in 1992, Herman writes, “no great empire has ever collapsed as swiftly and decisively as this one.”
He argues that may present an opportunity for the United States – which he calls “the last major capitalist, pro-growth economy on Earth.”
“Look for a capital flight from Europe to America,” Herman argues.
No doubt the wealthy will look to flee France. The Times of London predicted last month that if Hollande were to win, “prepare to hear a lot more French around the world.”
“I guarantee you that the treasury in Paris will get less net revenue as the rich leave,” Krauthammer said Monday.
But before Britain thinks of rolling out the red carpet: Reuters reported last month that 20 percent of the wealthy in Britain want out of there, too.
Is the United States poised to capitalize on Europe’s soak-the-rich socialist mistakes? Not yet, of course. We have a presidential administration and U.S. Senate that wants to follow Europe’s course, despite what they’re seeing happen across the pond.
If this country is smart, it will return to its free-market principles and devotion to individual freedom that once inspired the French to give us the Statue of Liberty, and which made this the most powerful, prosperous nation on Earth.
The stakes this November just went up.