Be Optimistic About Euro Fiscal Situation; Not US

♠ Posted by Emmanuel in ,, at 5/28/2010 08:15:00 AM
Courtesy of the Wall Street Journal, here we have a laundry list of PIIGS' efforts to adjust to an age of diminished expectations -
The Euro-Zone Diet: A look at austerity measures across the Continent

* Three-year €40 billion program of measures recently enacted to secure a €110 billion rescue from the EU and International Monetary Fund
* Cuts in public-sector wages, as well as private- and publicsector pensions
* Two-percentage-point increase in the top value-added tax rate to 23%, effective July 1

* €4 billion in spending cuts set in 2010 budget, as the first part of a four-year program
* Salary cuts of 5%-15% for government workers, for a savings of €1 billion from public service payrolls
* €760 million in reductions to welfare benefits
* Curbs in child-benefit payments

* Two-year €24 billion program of austerity efforts
* Wage freeze for public-sector work force
* Reductions in funding to regional and local governments
* 10% cut per year in 2011 and 2012 spending by government ministries

* Salary cuts of 5% for government ministers and other top state employees starting this year
* Value-added tax increase of one percentage point—to 6% for necessities, 13% for restaurants and 21% for most other goods and services
* Additional 2.5% tax for companies with profits of more than €2 million

* €15 billion program of budget cuts announced in May follows January's €50 billion austerity package
* Cuts of 5% in public-sector wages this year and a freeze on wages and pensions next year
* An end to the "baby check"—a €2,500 payment to families for every newborn child
Reuters also has a similar list, albeit a bit more detailed. Meanwhile, the "safe haven" of America? You must be joking. Having crashed through the $13 trillion debt mark according to the US National Debt Clock with offhand ease, Uncle Sam is gorging like your typical blubbery American at an all you can eat buffet. (Speaking of which, this analogy is a great one.) From the Associated Press:
As the national debt clock ticked past the ignominious $13 trillion mark overnight, Congress pressed to pass a host of supplemental spending bills to, among other things, fund the continuing wars in Afghanistan and Iraq, ramp up security on the U.S.-Mexico border and prevent teacher layoffs. Taken together, the Democratic-led U.S. Congress is trying to find a way to pass about $300 billion more in unfunded spending before Memorial Day -- a spending spree that rivals anything drunken sailors have been accused of.
Missus Clinton then links America's soaring debt with growing inability to impaired ability to handle security matters:
The United States' huge national debt -- now topping $13 trillion -- is becoming a major threat to U.S. security and leadership in the world, Secretary of State Hillary Clinton said on Thursday..."The United States must be strong at home in order to be strong abroad," Clinton said in remarks on the Obama administration's new national security doctrine, which was made public on Thursday.

"We cannot sustain this level of deficit financing and debt without losing our influence, without being constrained in the tough decisions we have to make," Clinton said, adding that it was time to "make the national security case about reducing the deficit and getting the debt under control..."

Clinton emphasized controlling the budget deficit, saying it was "personally painful" for her to see the yawning U.S. spending gap after her husband, former President Bill Clinton, ended his second term in 2001 with budget surpluses. "That was not just an exercise in budgeteering. It was linked to a very clear understanding of what the United States needed to do to get positioned to lead for the foreseeable future, far into the 21st century," she said.
Make no mistake: the real PIIGS here are in red, white, and blue. With little real hope for fiscal consolidation of the sort now occurring in the Eurozone in sight, it's high time that the US government stopped throwing away good money after bad at its housing-related folly which has only increased in the wake of the subprime crisis. Things are getting worse, not better Stateside. With record delinquencies and foreclosures being set time and again despite similarly unprecedented deficits, the solution cannot be more of the same which the Obama administration basically represents. Where's the change, man? Just say Ozzy as it literally blows your brains out.