Dr. Boozman's Check-up

Warnings from Europe

May 25 2012

Over the weekend, leaders from the G-8 nations met at Camp David.  The looming threat of a European economic collapse was at the top of their agenda.

From all accounts, it sounds like it was a lively debate at Camp David.  In one corner, you had the newly-elected president of France who believes that his nation isn’t spending enough.   In the other, Germany’s chancellor who has taken on the role as Europe’s chief proponent of austerity.  

President Obama is encouraging Europe to split the difference on those two approaches.  But is that what we are doing here at home?  If you look closely to what the President has advocated, you find austerity takes a back seat to government spending.

This is important to point out because we are not immune to the type of crisis we see transpiring overseas.  While much attention is focused on Europe’s fragile economic situation, we too are on shaky ground.  If we continue down the road we are on, we risk going the way Greece, Italy, Spain and Portugal.

Don’t think that could happen here?  Well, we already spend more per person than any of those four countries.  We have massive entitlement programs that are on a path to insolvency.  And, in recent years, we consistently drive our deficit spending to new record levels because the Senate refuses to pass a budget.

The only way will we get a handle on this situation is to reform the manner in which we budget and allocate federal dollars.  We have got to get serious about reigning in federal spending.  We have to strengthen Medicare and Social Security to ensure the solvency of the programs and control our deficits.  And we’ve got to cut the waste that is so rampant in today’s bloated federal government.

America should be leading by example.  As the world looks to us for advice on how to avoid an economic collapse, we should be in a position to give it.  We are not there.  It’s past time that we make the tough decisions that will get us there.