We keep hearing about the European debt crisis, but most of us know fairly little about it. All we know is that things are bad enough that The European Union has been considered on the verge of collapse over the issue and that Greece and Italy are the worst offenders. (Ireland is said to be pretty sick now, too.)
So what do we make of this chart from the U.S. Senate Committee on the Budget? (Click the chart above if you’d like to see it at a bigger size.) According to the chart, the per capita debt of the United States is already worse than that of Europe’s supposed basket case countries. What does that say about us?
According to Republicans on the Budget Committee, U.S. per capita debt would jump all the way to $75,000 by 2022 under Barack Obama’s proposed budget. Look at the other four charts on that page as well. If those numbers don’t scare you, you’re either too jaded to care or else you believe (as I do) that the debt will never be paid back, because the government will default at some point.
Just three and a half years, it was those on the left warning about deficits and pointing to a Republican vice president claiming that deficits don’t matter. But now that there’s a Democrat in the White House, the roles are reversed. It’s the Republicans complaining about the White House for spending too much and it’s the Democrats who are making the case that deficits don’t matter. (Ironically, the progressive left site that I linked earlier in this paragraph and the progressive left site I’m linking here both used Dick Cheney’s quote, but to make opposite points.)
This isn’t to give credit to either side, of course. This is to say that they’re two sides of the same coin. The same Republicans who are now piously complaining about rising debt weren’t doing anything about it when George W. Bush was spending money like a drunken sailor. The Democrats are no better. They only complain about debts and deficits when there are political points to be scored.
Don’t get caught up in the D.C. blame game about this, because they’re both to blame. Even if you’re still going to be a part of the coercive state political process, don’t pretend that one side or the other is better about this. Each one has its spin. Each one has its justifications. All the while, though, they stand there like children pointing fingers at one another — while the debt goes higher and higher and higher.
If you want to stay inside the system — which I don’t suggest — demand that both sides slash what they claim to love. Cut military spending to the bone. Cut expensive social welfare programs, too. That’s the only way that it’s possible to get out of this.
Of course, that will never happen. The military-industrial complex is too firmly entrenched to allow its budget to be cut very much. And the interest groups that control the Democratic Party will never allow meaningful cuts to social welfare programs. (Let’s be honest. More and more Republicans don’t really want those programs cut, either.)
If those cuts aren’t made, default is pretty much assured. Since the cuts are politically impossible, we’ll go on spending and coming up with new justifications for ignoring the debt and both sides will keep blaming the other. Isn’t it time for you to start making plans for what you’re going to do when things collapse?
All empires eventually collapse. The tides of history are not going to treat this country any different than it’s treated all the others which one day were at the top of the world. We’re in for a terrible fall.
Note: If you’d like to know more about how the European debt crisis came about and why it’s threatening to topple the European Union, listen to this recent episode of the public radio show, This American Life. Its economic point of view is mainstream rather than Austrian, so it doesn’t take issue with government spending the way I would, but it breaks down the basics of the crisis very well — into very simple terms.