Chriss W. Street
March 31, 2014,
Margaret Thatcher famously commented on the European welfare state spending, “The problem with socialism is that eventually you run out of other people’s money” to spend.
European elites are panicking over a report in the Financial Times of London titled “Data Deepen Eurozone Deflation Fears.” With government spending at 50% of the gross domestic product, the 28 countries of the European Union have pursued economic policies that generate inflation to spike tax collections by pushing their citizens into higher progressive tax brackets. Having stifled economic growth and used inflation to tax away prosperity, European elites should panic.
Both Europe and America cranked up government spending and intrusion into their private sector economies to supposedly cushion the Great Recession’s misery and stimulate growth. Both modestly increased unemployment and welfare payments to individuals. However, whereas most of the European stimulus cash simply expanded government ministries, in the U.S. the money was contracted out to the private sector.