America faces a seminal reality: We are broke, and we are getting broker by the day. This is the real “fiscal cliff” the country is about to jump off, not the artificial one consuming Washington. Instead of confronting our looming insolvency, the electorate voted to take the plunge. It ratified Mr. Obama’s drive to erect the equivalent of a Franco-German welfare state. Consider Obamacare, the massive stimulus, failed green-energy boondoggles, record numbers on food stamps, constant extensions of unemployment benefits, public housing subsidies, unprecedented government spending and free contraception.
Voters chose economic security over individual opportunity, handouts instead of self-reliance, statism over capitalism. Rather than rebuking Mr. Obama, they rewarded him. Continue reading
Is Europe heading down the path of war? If so, the middle east would be a likely target with the tensions building up over the year between two regions. Only time will tell — and history does repeat itself.
In the midst of deep recession and massive unemployment, with a higher than expected deficit and a general strike round the corner, Spain – despite reforms and deep budget cuts – is struggling to emerge from the crisis and is causing new concern within the euro area.
The 2012 Budget will be rolled out on Friday against this disturbing backdrop. No one doubts that it will lay out a path for a kind of wartime economy, if the metaphor is permitted. The government will face two conflicting but legitimate claims. Firstly, from citizens, who want the gigantic unemployment market, bigger in Spain than in any other OECD country, to be tackled first, and the safety net to be maintained. Secondly, external demands, whose priority is to draw down the public deficit.
Full article: Spain: We are building a “war economy” (Press Europ)
As Greece’s problems shed some urgency, Eurogroup ministers will turn their focus to Spain, where the government looks set to violate newly-agreed EU budget rules by missing its deficit target again this year.
Spain, the eurozone’s fourth biggest economy, planned to cut its budget shortfall to 6% of GDP in 2011, but reported an 8.5% shortfall instead.
In 2012, it was supposed to cut the deficit to 4.4% in line with an EU-wide agreement but earlier this month Spain’s new government announced that it would aim only for a cut to 5.8%, while still maintaining a 2013 goal of 3.0%.
The announcement came after unemployment in Spain hit 23%.
Eurozone officials are worried that allowing Spain to soften this year’s target would create a dangerous precedent and undermine the credibility of the recently sharpened budget rules.
Full article: Euro Focus Moves To Spain After Greek Deal (Isle of Wight Radio)
Hungary — quite possibly the next target of the German-dominated EU.
Hungary appears to be turning into the next Greece. The country has failed to reduce its deficit, and today the European Commission reacted. The executive arm of the European Union has announced a proposal to withhold from Hungary $655 million in EU development funds.
“The commission took a decision today to propose to partially suspend commitments of the EU Cohesion Fund for Hungary from January next year onwards because of non-compliance with the latest council recommendation in January to correct its excessive deficit,” said Olli Rehn, EU commissioner for economic and monetary affairs.
This is the first time the European Commission has taken such an action against one of its members as punishment for an excessive deficit.
Though EU officials portray today’s action as an encouragement rather than a punishment, the greater truth is that the European Union is now wielding tremendous power over nations that were formerly sovereign—especially those that are poorer. Expect Hungary’s sovereignty to fade away just as Greece’s has, and for EU authority to continue to strengthen.
Full article: EU Plans to Withhold Funds From Hungary (The Trumpet)