If there’s anything that sums up the brokenness of America’s political class, it is the recent fiscal cliff fiasco.
After all the sound and fury, we’ve ended up with yet another refusal to make the hard choices concerning how the U.S. disciplines its apparently insatiable appetite for public spending.
In a way, however, the fiscal cliff circus was always a side-show to the main game. And this is the deeper existential problem that many Western European nations have long failed to master, but which America also now seems unable to address.
It’s a crisis that flows from a very unwholesome dynamic between democracy and the fact that many people now assume they’re entitled as a matter of right to be given any number of things by the state without too many questions being asked about how to pay for it all. The combination is presently proving toxic for much of Europe, but increasingly constitutes a profound danger to America’s economic future.
So how did Europe — and increasingly America — arrive at this point? On one level, it’s simple arithmetic. With governments consistently spending more than they bring into their coffers through taxation, borrowing money is how they’ve made up the difference.
In many European countries, the subsequent debt-burden has grown to the point whereby it’s affecting governments’ capacity to meet their financial obligation. In Spain, things are so bad that governments are actually deferring payments they owe to private businesses.