… or Worse
Then there is Europe, or more precisely the 17 nations that use the euro currency. Financial bailouts of Greece, Ireland, and Portugal could eventually see Italy and Spain added to the list.
While politicians in the U.S. have (unfortunately) been masterful at "kicking the can down the road" … i.e. putting off tough decisions while adopting temporary band-aid solutions to major deficit problems, the true artists of the past two years have been European leaders. It seems each week that promises are made, agreements are reached, hands are shaken, only to have the details deciphered in subsequent days with a determination that "the emperor has no clothes" … that the details are less than impressive.
Many question why Germany … the 800-pound gorilla in the room … doesn't simply agree to tie all the nations' separate fiscal policies together, or simply agree to back the issuance of euro-community bonds, wherein the Germans and the French, in particular, lend their financial strength to the other nations.
Let's try an analogy …
Let's say that Chancellor Angela Merkel of Germany is the oldest sister in a very large family. The next in line is her "brother" French President Nicolas Sarkozy. Many other siblings include leaders of various nations who have, over the years, spent too much on the good life, borrowed too much, but have been able to borrow from others to pay the bill.
Three of the youngest siblings have already received money to cover their errant ways, along with their promises to do better. Only the Irish leader seems to have taken that commitment to heart. Other brothers and sisters are now complaining about their challenges of borrowing money to offset their excessive spending. They have called upon big sister and big brother for "loans" … which all know will never be paid back.
Big sister and big brother want to help, but also want their younger siblings to REALLY GET SERIOUS about their spending and borrowing. Big sister and big brother fear that handing massive amounts of money to the younger siblings will not modify their excessive ways, with every expectation that they will be back in a few years for more and more "loans."
Big sister and big brother have made it clear that any "loans" will be met with the requirement that they have a great deal to say about future spending of the siblings. As one might expect, the younger group is not exactly excited for this to happen.
Jeff Thredgold is the chief economist for Zions Bank and founder of Thredgold Economic Associates, a professional speaking and economic consulting firm. Visit www.thredgold.com.
- University of Utah entrepreneurship program...
- Financial interventions don't work
- Salt Lake City is now 'Ski City USA' in new...
- Dave Ramsey says: Tips for stretching dollars...
- Stericycle critics: Shut it down now
- FedEx to add 50,000 seasonal jobs
- Cities to celebrate completion of S-Line...
- Extended warranties a big sell. Are they...
- Financial interventions don't work 6
- Salt Lake City is now 'Ski City USA' in... 5
- Extended warranties a big sell. Are... 4
- Dave Ramsey says: Tips for stretching... 4
- How employers can improve the nation's... 2
- GM expert says 19 deaths eligible for... 1
- US current account deficit dips to... 1
- University of Utah entrepreneurship... 1