HeringKearney108

Politics Versus Economic Reality: We'll All Lose

In the West there's quite obviously a battle between the politics and also the economics. It's clearest is Europe where - all most as you - the economists say the Euro is condemning many to long-term austerity and inevitable poverty and is therefore unworkable - but somehow the politicians don't seem to get it: or will they think the choice is worse? And also the reason behind this problem is most of all the resolve for excessive government spending primarily driven through the welfare state. And in the USA, that great bastion of free enterprise and the American dream, is incorporated in the middle of the battle to create the very same welfare state to those shores whilst ignoring escalating public debt.

In Democracy in the usa (published in 1835 in France), Alexis de Tocqueville wrote "The American Republic will endure until the day Congress discovers that it can bribe the general public with the public's money." Which appears to be happening today. De Tocqueville is interesting because at that time France, and even the remainder of Europe had primarily aristocratic rule and that he was a liberal who supported the thought of democracy. But he was worried about the long run effect of that democracy on sensible economics: "From that moment on, most always votes for that candidates promising the best results in the public treasury with the result that a democracy always collapses over loose fiscal policy."

A fascinating rise in that the EU - inside a desperate make an effort to save the Euro - has decreed that member states should have a well-balanced budget. Of course the reason they didn't possess a balanced budget was because politicians wanted to bribe their voters as well as their financiers (these day almost exclusively big corporate).

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However the EU is fulfilling De Tocqueville prophecy by attempting to sideline democracy - both in Greece and Italy an effort by democratically elected leaders to even consider the chance of leaving the Euro led to their instant removal by scheming EU apparatchiks as well as their replacement by so-called Technocrats. If the EU has its own way I suspect the Greek election due soon will be postponed as will every other election that threatens a vote which will destabilise the union.

Of course the total absurdity of the EU is whilst it clamps down heavy heavily on rising budgets in EU members states its own budget expands exponentially with screams of protests if anybody suggests otherwise.

But the simple issue is this - can democratically elected governments really cut the money they are paying out to the voters and ever hope to be elected again? Clearly the first prerequisite is that the politicians are willing and then are able to result in the argument - and win it - using their voters. These days, with politicians who use opinion polls rather than conviction as their guiding light, that seems a big ask. Or perhaps is it conviction of the wrong kind - a conviction towards the liberal democratic model that believes their state should 'take care' from cradle to grave. The problem in the US appears to be the most peculiar - with Europe as an example of what goes on when an excessive amount of is spent of social largesse it is extraordinary the united states seems to be following the same model. You don't have to be a member of the Tea Party to determine something needs to be done about US government spending - and surely the priority should be obtaining the budget balanced before adding to it!

Britain's electorates obsession with the NHS (free healthcare) is an illustration of the problems of trying to alter something that is sacred cow - yet most accept it's not efficient. Even talking about NHS reform has government pollsters in a lather of despair.

So in the west the politics is ruling the roost: maybe we should say the little head is ruling the large head because when everyone knows that economics is like a river: it may be dammed, diverted and siphoned however it keeps coming as well as in the end those attempting to stop it must be overwhelmed.

The question is when will economics win? I lived in Eastern Europe after economics eventually won the Cold War. That suggests to me Europeans will ultimately be residing in some type of protected enclave where those outside have the latest gadgets and they'll be tied to a classic ipad: buildings will not be repaired and infrastructure will creak and barely work. The inevitability of economics suggests that is how the EU is heading: a failing totalitarian state.

The truth is if we are to have state spending - we need to generate enough wealth to invest in that spending. That's the economics from it. Furthermore that wealth should also must grow and become readily available to reinvest in new projects to produce more wealth to help keep paying the bills. In the socialist/communist system the necessity to invest is ignored and inefficiencies sidelined in the have to maintain the system.

In the UK the Blair/Brown years saw an enormous numbers shuffled onto welfare dependency often called disability. It was no different to the communist regime allocating every participant from the workforce a job - whether or not a new employee was needed. It made Communist business hopelessly inefficient in terms of manpower: whilst pushing people into welfare dependency just gets in cost to the tax payer - net effect is identical - much less money for investment and therefore fewer, and finally no new jobs.