Posted by lex, on May 23, 2010
For years, fiscal conservatives on this side of the Atlantic pointed out that the European social model was unsustainable on current demographic trends. Over the same time frame, social conservatives wondered aloud whether the European social model was not itself responsible for those same demographic changes. After all, when the state becomes both mother and father, why should infantilized adults be bothered with raising their next nations? Simultaneously, the cultural cost of importing alien labor to buttress declining native births has become manifest.
And now the payment is coming due:
Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella. They have also translated higher taxes into a cradle-to-grave safety net. “The Europe that protects” is a slogan of the European Union.
But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.
With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes. The countries are trying to reassure investors by cutting salaries, raising legal retirement ages, increasing work hours and reducing health benefits and pensions.
“We’re now in rescue mode,” said Carl Bildt, Sweden’s foreign minister. “But we need to transition to the reform mode very soon. The ‘reform deficit’ is the real problem,” he said, pointing to the need for structural change.
The reaction so far to government efforts to cut spending has been pessimism and anger, with an understanding that the current system is unsustainable.
There’s change you can believe in, and it’s coming our way soon.
Bread and circuses.