Why would voters support expanding debt levels combined with austerity? Across Europe, voters tossed out the political parties that foisted the Merkel-Sarcozy plan upon them. Now what?
Those replacing the bad guys in France and Greece are even worse. This is the political nightmare to which the entitlement society ultimately leads.
Francois Hollande promises to raise marginal tax rates to 75 percent and end the austerity being imposed in various European countries. Raising marginal tax rates to 75 percent will lower tax revenues and make the French deficit even worse than it is. Not to mention the chilling impact of 75 percent rates on business activity. As for ending austerity, we are back to the same old question. Who pays?
French citizens, on paper, have a great life. Such are things in the entitlement society. The only minor headache is who is out there willing to fund this great life? Bond buyers have been the answer for the last two generations. No longer. So, who is out there to step up to the plate to provide the good life for French citizens? We're waiting.
Hopefully, Hollande will reveal who the good samaritans are who will provide the funding to bankroll the French entitlement society, because it is certainly not apparent at this point.
Ditto in Greece. No more austerity, keep entitlements in place, but how? Who funds this?
I think we know where this is headed. We have the German experience of the 1920s to see where this goes.
Meanwhile what will modern day Germany do? By next year, it should be apparent that German citizens will toss out Merkel and her grand bailout and austerity schemes. In time, Germany will be forced to abandon the Euro unless they want to be the funding source for the life of leisure that Hollande promises French citizens and the various groups trying to gain leadership in Greece promise Greek citizens.
By insisting on unfunded entitlement programs and labor laws that effectively outlaw hiring new employees, European politicians have succeeded in imposing the Obama Plan throughout Europe. The outcome is no longer really in doubt -- economic catastrophe and political chaos. Coming soon to your neighborhood.