Free Republic

The Dow plunged 313 points yesterday, but don’t believe news media reports that it was the nearness of the “fiscal cliff” that caused the selloff. What spooked investors is a bigger picture that recognizes the economically catastrophic implications of a second Obama term. To be clear, there is nothing Romney could have done to avoid the deflationary Depression that lies ahead. However, a Romney presidency might have at least served as a reality check on malfeasant fiscal practices, delaying the onslaught of hard times for perhaps long enough to allow Americans to put their financial houses in better order before...

The 1920s began with a severe post WWI depression even worse than the start of the Great Depression of the 1930s. During the Roaring Twenties (get the name?) Presidents Warren G. Harding and Calvin Coolidge implemented an austerity strategy, including a re-embracing of the laissez-faire free market policies from the late nineteenth century. It included severely cutting taxes across the board, a huge reduction in government size, massive spending reductions, and extensive deregulation. Their only mistake was not cutting trade barriers, so when the Smoot-Hawley Tariff Act was proposed in 1929 under new President Herbert Hoover to drastically increase tariffs and implement stricter domestic industry protection...

Regardless of who the President is after this close election, the equity markets and the U.S. economy are in trouble. Debt has spread throughout the Western world. The fallout is political dissonance, growing economic hardship and, in some places, mob violence.Ground zero for the spreading fear and panic is Greece, which was once the worldÂ’s greatest civilization and the birthplace of democracy, poetry and philosophy.There is violent evidence of the contradiction from what the ancients taught and what is unraveling in Greece. It would all just be another boring story at the end of the news day, except there is...

WASHINGTON—If Mitt Romney becomes president, he might need a crash course in Diplomacy 101. He irritated Britons and Palestinians during a summer tour abroad and has declared Russia to be America's No. 1 geopolitical foe. Just last week, the Republican candidate, who plans a foreign policy speech Monday, raised eyebrows in Spain by holding it up as a prime example of government spending run amok. That left Spaniards confused, and threatened to reinforce Romney's perceived handicap in international affairs, precisely at a time when lingering questions over the Sept. 11 attacks against the U.S. Consulate in Benghazi, Libya, has President...

French President François Hollande faced his first serious public backlash after up to 50,000 lined the streets of Paris on Sunday (30 September) in protest against his €37 billion austerity budget. Organizers of the event, which brought together around 60 left-wing groups, claimed that 50,000 protesters took to the streets to denounce the cuts program. "Today is the day the French people launch a movement against the politics of austerity," said the Front de Gauche president, Jean-Luc Mélenchon, who finished fourth in the Presidential elections. …

Sweden, like Norway, is often held up as a country which is "socialist and successful." For example, Sweden has high taxes yet also has had healthy economic growth recently. In this century so far, Sweden's total tax bite amounted to 52% of GDP, while the U.S.'s was 32%. Yet Sweden's real GDP grew 2.3% per year from 2001 to 2011, and ours grew only 1.6% per year. Prima facie evidence that high taxes don't kill an economy, right? In July I deconstructed the Norwegian "Miracle," the other "socialist and successful" country. It's Sweden's turn now. Sweden, like Norway, consists of...

Kicking Common Sense Down the Road- By: Larry Walker, Jr. -When one of today’s most brilliant liberal economists recently mentioned the European fiscal crisis, he said, “Spain is suffering the hangover from a huge housing bubble, which caused both an economic boom and a period of inflation that left Spanish industry uncompetitive with the rest of Europe. When the bubble burst, Spain was left with the difficult problem of regaining competitiveness, a painful process that will take years.”Yet, when far less knowledgeable left-wingers, including the President, speak of America’s economic woes, they routinely regurgitate the meaningless thread, “We are suffering...

France's Socialist government on Friday (28 September) unveiled €30 billion ($38.6 billion) worth of tax hikes and spending cuts in a bid to bring the public deficit in line with EU rules next year. Dubbed a "combat budget" by Prime Minister Jean-Marc Ayrault, the fiscal plan is based on sharp tax increases for the rich (75% on millionaires) and for companies expected to bring in €20 billion ($25.7 billion).The budget is based on the assumption the economy will grow by 0.8 percent.This may prove difficult, as France's growth was zero this year and the continuing eurozone crisis is worsening the...

DOW FALLS 100 AND SPAIN PROTESTS AUSTERITY: Here's What You Need To Know Sam RoSeptember 25, 2012AP Images Market volatility picked up amid some mixed signals from the economy. First the scoreboard: Dow: 13,458, -100.2, -0.7% S&P 500: 1,441, -15.2, -1.0% NASDAQ: 3,117, -43.1, -1.3% And now the top stories: * After the U.S. markets closed yesterday, global economic bellwether Caterpillar shook the earth by cutting its earnings guidance for 2015. "Our goal hasn't changed but the economy has," said management. * However, more evidence suggests the U.S. housing market is recovering. According to S&P Case-Shiller, home prices rose 1.2%...

Greek police protesting against austerity cuts blocked the entrance to the riot police headquarters on Thursday, preventing buses carrying riot police from leaving for the site of major demonstrations this weekend. The government plans to slash police pay in a new round of spending cuts worth nearly 12 billion euros over the next two years. The savings plan is expected to provoke new street protests in the coming weeks by austerity-weary Greeks fed up with repeated wage and pension cuts.

ATHENS, Greece (AP) -- Greece's unemployment rate surged to 24.4 percent in June, according to official figures Thursday, as protests continued against a massive new austerity package, with police blocking their colleagues from starting work.

The left-wing Socialist party is expected to seize the largest gains in September's Dutch elections, threatening to deprive German Chancellor Angela Merkel of one of her closest allies in response to the eurozone debt crisis. With Dutch voters set to go to the polls on 12 September 12, opinion polls indicated that the Socialist party, which has never formed part of a government, is running marginally ahead of caretaker Prime Minister Mark Rutte's Liberal party (VVD). … The Socialist party is more euroskeptic than the mainstream Dutch parties, leading opposition to the ill-fated Constitutional Treaty, which was defeated in a...

...Today, the shoe, as they say, is on the other foot. The debt owed by Greece is in the neighbourhood of US $345 billion (reports vary). The likelihood of eventual repayment is very slim indeed. And, not surprisingly, the Greek people feel the same way the German people did following the signing of the Treaty of Versailles. Correspondingly, events in Greece bear similarities to those seen in Germany in the 1920's. So, will we be looking at a repeat of Weimar Germany for Greece in the coming years? The first developments will most assuredly occur in connection with the new...

The government on Monday passed a sweeping measure to tighten Israel's belt at a time when the world is facing another global financial crisis. With a vote of 20 to 9, the Cabinet approved a package of austerity measures designed to raise some NIS 14.15 billion within a year, and reduce the budget deficit by 1.5 percent. Voting against the package were the Independence and Shas parties, as well as Likud Social Services Minister Moshe Kahlon. The measures include raising taxes, increasing fines and cutting budgets. Tax Hikes and Fines Extending the “temporary” order issued in February 2011 to raise...

Mariano Rajoy, the Spanish prime minister, has called for the eurozone to have “centralized control” over the budgets of all the countries using the euro. Rajoy has become the latest European politician to call for countries to, in effect, abandon their sovereignty in a last-ditch attempt to save the beleaguered currency. Rajoy said a new central authority would go a long way to alleviating Spain’s economic crisis as it would send a clear signal to investors that the single currency is an irreversible project. He said: “The European Union needs to reinforce its architecture. This entails moving towards more integration,...

Support for Spanish Prime Minister Mariano Rajoy fell sharply in July after his government announced a new round of deep spending cuts and tax hikes to fight the sovereign debt crisis, an opinion poll showed on Sunday. … Since Rajoy won the elections by a landslide last year, Spain has become the new front line of the 2½-year debt crisis, and the government has implemented several packages of structural reforms and austerity measures, the latest worth €65 billion ($80.4 billion) until 2014. … While 74 percent of the 1,000 people interviewed say they have a negative view of the government,...

Greece conceded on Thursday it had slipped "in some respects" in implementing the cuts and reforms demanded by lenders in exchange for saving Athens from bankruptcy, and tried to persuade them to cut the country some slack. Finance Minister Yannis Stournaras made the admission after meeting senior officials from Greece's "troika" of lenders from the EU, European Central Bank and International Monetary Fund, whose inspectors have begun picking through the country's books after weeks of political paralysis.

Here’s some good news from across the pond that a lot of Americans will like. Ireland is once again preparing to return international debt markets for the first time since 2010. For the Irish government, the timing is good; as the FT notes, Ireland could use the money:

(CBS News) ATHENS - Greece is broke, and it agreed to big cuts in government spending in return for a bailout by other European countries. However, because that austerity deal was so hated by Greeks, the government fell. The country will vote for a new parliament Sunday. The question is: Will a new government abandon the bailout agreement, undermining the euro currency and the European Union? Why would Greeks risk that? Dr. Chris Rokkas is a top cardiologist at Attikon hospital, but these days the U.S.-trained surgeon rarely sets foot in an operating room, which is bad news for Georgia...

Michael Tanner  As Greece, and now Spain and Italy, struggle with the crushing burden of debt brought on by the modern welfare state, perhaps we should shift our gaze some 1,200 miles north to see how austerity can actually work.Exhibit #1 is Estonia. This small Baltic nation recently had a spate of notoriety when its president, Toomas Ilves, got into a Twitter debate with Paul Krugman over the country's austerity policies. Krugman sneered at Estonia as the "poster child for austerity defenders," remarking of the nation’s recovery from recession, "this is what passes for economic triumph?" In return, President...