Saturday, February 27, 2010

European Socialism - The Day of Reckoning

After two World Wars and years of misery, the Europeans adopted Socialist Schemes trading freedom in many cases for economic security and the welfare state. Europeans looked to big government to take care of them. Most European countries do provide health care and many costly government benefits to deal with all facets of family life. However, as someone who travels to Europe frequently, it is very clear to me that Europeans have a lower standard of living than Americans. Middle class Europeans live in smaller homes, drive smaller and fewer cars and generally have less wealth than the typical middle class American family.

While it is true that Americans are probably overly materialistic, the fact is that we have had the money to make choices beyond just the basics in life. The United States is a consumer society, for better or worse, which cannot be said of most European countries. Europeans are accustomed to doing by with less, which may have historical roots. Immigrants came to the United States for a better life than they experienced in Europe and other places, which may be the reason we enjoy the good life as defined by the ability and freedom to buy goods and services.

Aside from the debate on which is the better life style, since European society is very much based on Keynesian Economics and Socialism, the fact remains that Europe has traditionally always had higher unemployment and lower growth than the United States as the trade off for their welfare state. Very high taxes and big government spending always retard the growth of the private sector and that is exactly what has happened in Europe.

The day of reckoning has come in Europe with the current financial crisis. Greece, Italy, Spain, Portugal, Ireland and Britain, which are significant welfare states with big government bureaucracies all have debt and welfare benefits that are not sustainable. They all need to radically cut government and scale back their welfare spending, which is causing riots in the streets in Greece. Some of these countries have actually raised taxes in a deep recession in an attempt to maintain their government bureaucracies and benefits, which will be counter productive and make matters worse. If the German do not step in to provide a new Marshall Plan and soon to prop up these countries, it could cause the collapse of the EURO and the whole European Union system. This is the reason why foreigners are still buying US Treasuries at very low interest rates. Though US deficits are also unsustainable, the EU zone is even worse.

Free Market Capitalism with all its warts is the best economic system ever devised in human history guaranteed to produce wealth and wide spread prosperity because it is based on individual ingenuity and the desire to get rich. In doing so, all benefit along the way. Yes, there are boom and bust business cycles in Capitalism, which can be painful, but they are absolutely necessary to eliminate unproductive and or outdated ventures in the process of creative destruction.

Free Market Capitalism is hindered by government intervention, which seeks to identify winners and losers for political reasons rather than allowing market forces to work properly. The best example of this was the government bail out of GM and Chrysler that went bankrupt anyway. GM and Chrysler should have been left to their owns designs to succeed or perish. There is too much global capacity in the auto industry. By artificially allowing both GM and Chrysler to stay in business through government bail out funding; in the long run the entire auto industry and our nation is harmed.

In the extreme Communism, which is just the dictatorial form of Socialism has shown us that the greater the government involvement in controlling the means of production, the lower the country's standard of living and prosperity. And, don't look to China for an example. China has been a Communist country for 60 years. And, while it is true there are now about 300 million Chinese that are lower and middle class, there are another 900 million Chinese that live in abject poverty. While the Chinese have achieved some success at the expense of liberty, it has only come once they adopted a more Capitalist economic system. Had the Chinese done it sooner than the last 10 or 15 years, perhaps China would not have so many people living in poverty today. The Chinese government is rich, while most of their people are very poor.

President Obama wants to "transform" America to be more like a European Socialist country and even bigger welfare state than what we have now. We can't let that happen because it will mean a lower standard of living for the people of the United States, higher unemployment, slower economic growth and the loss of our freedoms. Instead, we must elect common sense Conservatives in 2010 and 2012 that support free market capitalism, limited government, lower taxes and less regulations, a balance budget, term limits, a strong national defense, the right to bear arms, the sanctity of life and family values as the only road to prosperity. We can do it. We must do it to stop the transformation of our country into a Socialist nation. History is the best teacher. We can see the end of that unpleasant story so we must JUST SAY NO To Obama and the Democrat Socialists that control Congress.

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