The Poisoned Fruit of Social Democracy

It is difficult not to notice that most of the financial, economic and societal problems making headlines in the world today are centered in Europe and the United States.  The reality is that the "West" has finally reached the point of saturation wherein its economies and societies can no longer afford to guarantee a certain standard of living for the citizens of these countries in exchange for votes. 

These nations have two factors in common: 1) they are all either confirmed to be or determined (as in the case of the United States) to become socialist democracies; and 2) they have evolved into overwhelmingly consumption-based societies, greatly diminishing their goods-producing sector (which generates the real wealth of a nation), thus eroding their job-creation ability as well as the nation's wealth and tax base.  Yet the governments of all these countries continue to deficit spend, over-tax (chasing wealth and job-creation off-shore) and borrow in an effort to meet the expectations of the people.

This never ending downward cycle is about to crash as the central banks in Europe and the United States cannot continue to, in essence, print money and guarantee the balance sheets of the banks and government debts of the various nations caught up in this maelstrom.

It is the exception that a country in this sphere is not facing long or short-term insolvency.   A cursory review of the American Thinker National Insolvency Index (10 being the benchmark with the index above 10 for three or more years indicating a severe potential of insolvency and near intractable societal problems) is a follows for a variety of countries in the West including some that are recently in the headlines.  (http://americanthinker.com/articles/2011/08/the_bitter_fruit_of_insolvency.html)

 

         2009 Index

        2010 Index

         2011 Index

Spain

               26.1

             29.7

              24.3

Greece

               24.8

             20.2

              24.3

Ireland

               24.4

             45.7

              24.6

Portugal

               19.8

             20.2

              21.7

United States

               19.1

             18.5

              19.7

United Kingdom

               16.7

             18.6

              17.2

France

               16.6

             17.6

              17.5

Italy

               13.6

             13.8

              17.2

 

The higher the Index above 10, the greater the problems that country is experiencing and viable solutions to solve these dilemmas will be increasingly difficult to enact.  This has been proven out in the budget fights in Washington D.C. and the failed attempts to pass austerity packages in the various capitals of Europe.

It is no coincidence that that so much of the global financial chaos resides in the Western world.  This region that has been dominated by the failed philosophies of socialism/Marxism and an assumption that prosperity would never end.  Social democracy was a devil's bargain, based on the assumption that the engine of that prosperity -- capitalism -- would never cease to produce wealth and revenue to the government, which could buy votes with it.  However, it now has all crashed, as the reality of a global economy has come to pass and many other nations are in the equation, having taken over the goods-production and innovation activity once dominated by the West.   Unless and until the West again becomes more of a goods-producing and exporting region by dramatically changing its politics and economic philosophy, it will continue to descend into further chaos as these economies are cannibalizing themselves in order to maintain their flawed societal commitments.

The riots in Greece, France and lately Great Britain, while fomented by anarchists and hoodlums, have roots in the socialist mindset of the Ruling Classes in these countries.   It remains to be seen if these people can ever admit the error of their ways, something that they are not noticeably pre-disposed to do, and reverse course.  More likely, they will simply mouth the usual platitudes that all this is the fault of society and the "rich," thus there needs to be more income-redistribution.   An irrational solution that only exacerbates the overall dilemma and foment more upheaval and demands that cannot be met.

The Left and the Socialists will point to the ever growing disparity between the have and the have-nots in society as the justification for this redistribution viewpoint and continued demonization of the wealthy and capitalism in general.   However, the reason for this growing disparity is not the so-called greed of the "rich."  It is the result of the radical socialist policies of the Left and the restructuring of the various economies which now create mostly low paying service jobs, if any.  There is little opportunity for upward mobility as the high paying value-added jobs in goods-manufacturing arena, as well as an environment to promote entrepreneurial creativity no longer exists.

The question is: can the West change?  With the possible exception of the United States, it appears the answer is: no.   There will have to be a complete collapse of the European economy, the euro (which was created on the backs of the Germans), as well as ongoing civil unrest and destruction before reality finally sets in.  The United States can avoid this scenario by making certain there is a viable outcome in the next election.

It is difficult not to notice that most of the financial, economic and societal problems making headlines in the world today are centered in Europe and the United States.  The reality is that the "West" has finally reached the point of saturation wherein its economies and societies can no longer afford to guarantee a certain standard of living for the citizens of these countries in exchange for votes. 

These nations have two factors in common: 1) they are all either confirmed to be or determined (as in the case of the United States) to become socialist democracies; and 2) they have evolved into overwhelmingly consumption-based societies, greatly diminishing their goods-producing sector (which generates the real wealth of a nation), thus eroding their job-creation ability as well as the nation's wealth and tax base.  Yet the governments of all these countries continue to deficit spend, over-tax (chasing wealth and job-creation off-shore) and borrow in an effort to meet the expectations of the people.

This never ending downward cycle is about to crash as the central banks in Europe and the United States cannot continue to, in essence, print money and guarantee the balance sheets of the banks and government debts of the various nations caught up in this maelstrom.

It is the exception that a country in this sphere is not facing long or short-term insolvency.   A cursory review of the American Thinker National Insolvency Index (10 being the benchmark with the index above 10 for three or more years indicating a severe potential of insolvency and near intractable societal problems) is a follows for a variety of countries in the West including some that are recently in the headlines.  (http://americanthinker.com/articles/2011/08/the_bitter_fruit_of_insolvency.html)

 

         2009 Index

        2010 Index

         2011 Index

Spain

               26.1

             29.7

              24.3

Greece

               24.8

             20.2

              24.3

Ireland

               24.4

             45.7

              24.6

Portugal

               19.8

             20.2

              21.7

United States

               19.1

             18.5

              19.7

United Kingdom

               16.7

             18.6

              17.2

France

               16.6

             17.6

              17.5

Italy

               13.6

             13.8

              17.2

 

The higher the Index above 10, the greater the problems that country is experiencing and viable solutions to solve these dilemmas will be increasingly difficult to enact.  This has been proven out in the budget fights in Washington D.C. and the failed attempts to pass austerity packages in the various capitals of Europe.

It is no coincidence that that so much of the global financial chaos resides in the Western world.  This region that has been dominated by the failed philosophies of socialism/Marxism and an assumption that prosperity would never end.  Social democracy was a devil's bargain, based on the assumption that the engine of that prosperity -- capitalism -- would never cease to produce wealth and revenue to the government, which could buy votes with it.  However, it now has all crashed, as the reality of a global economy has come to pass and many other nations are in the equation, having taken over the goods-production and innovation activity once dominated by the West.   Unless and until the West again becomes more of a goods-producing and exporting region by dramatically changing its politics and economic philosophy, it will continue to descend into further chaos as these economies are cannibalizing themselves in order to maintain their flawed societal commitments.

The riots in Greece, France and lately Great Britain, while fomented by anarchists and hoodlums, have roots in the socialist mindset of the Ruling Classes in these countries.   It remains to be seen if these people can ever admit the error of their ways, something that they are not noticeably pre-disposed to do, and reverse course.  More likely, they will simply mouth the usual platitudes that all this is the fault of society and the "rich," thus there needs to be more income-redistribution.   An irrational solution that only exacerbates the overall dilemma and foment more upheaval and demands that cannot be met.

The Left and the Socialists will point to the ever growing disparity between the have and the have-nots in society as the justification for this redistribution viewpoint and continued demonization of the wealthy and capitalism in general.   However, the reason for this growing disparity is not the so-called greed of the "rich."  It is the result of the radical socialist policies of the Left and the restructuring of the various economies which now create mostly low paying service jobs, if any.  There is little opportunity for upward mobility as the high paying value-added jobs in goods-manufacturing arena, as well as an environment to promote entrepreneurial creativity no longer exists.

The question is: can the West change?  With the possible exception of the United States, it appears the answer is: no.   There will have to be a complete collapse of the European economy, the euro (which was created on the backs of the Germans), as well as ongoing civil unrest and destruction before reality finally sets in.  The United States can avoid this scenario by making certain there is a viable outcome in the next election.