To Grow And Thrive, EU Nations Must Balance Their Budgets

IBD Editorials ^ | December 7, 2011 | SEN. JIM DEMINT AND REP. CATHY MCMORRIS RODGERS

[Kaslin]

With the European debt crisis dominating the news and threatening to pull the world into a double-dip recession, there are growing calls for Uncle Sam to come to the rescue.

The U.S. is already committing untold billions to the $1.4 trillion European bailout fund, but that's not enough, according to some European leaders and even U.S. politicians. They say that while the EU bailout is costly, it's also necessary.

They are only right about the cost. These endless bailouts are not only unnecessary, but are in fact dangerous.

"The problem with socialism," former Prime Minister Margaret Thatcher once said, "is that eventually you run out of other people's money." She was right. Now, as politicians run out of other people's money in their own country, they want other nations to foot the bill.

Consider the situation in Greece. For the past decade, Greece engaged in unrestrained deficit spending, accumulating a debt worth 143% of their GDP today. When Greece could no longer borrow money in the private markets last year, the European Union and the International Monetary Fund gave them bailouts of over $300 billion (nearly equal to the entire Greek economy, or $28,000 per person).

But the problem hasn't been confined to one nation. Ireland and Portugal have received bailouts from the EU and the IMF at a cost of over $100 billion apiece.

Who's next? Likely, Spain and Italy. Spain is running a deficit around 9% of GDP because its jobless rate is stuck at 23% — highest in the euro zone. Italy's debt is 115% of the economy. If it were to receive a "small" bailout — say, the size of Portugal's, about half the economy — it would cost over $1 trillion.

[jessduntno]

[GeronL]

lol.

This is funny stuff.

Why are our guys casting stones??