Europe Could Be Our Financial Role Model. And No, I Haven't Gone Crazy!
The latest jobs numbers suggest our sputtering economy may be shifting back from slow growth to no growth.
About the only things actually growing are government spending and the national debt!
Maybe we should look to Europe for a role model on fiscal responsibility.
I'm not talking about Greece or Spain. You gotta look a little higher to Estonia.
Just like nearly everyone else, the 2008 economic crisis sent this Baltic nation into a deep economic downturn.
Instead of trying to "stimulate" the economy with money they didn't have, the Estonians cut back.
Public-sector wages got a 10 percent cut. They're raising the retirement age slowly from 61 to 65 over the next 14 years.
They reduced eligibility for government health benefits instead of broadening them. They're even working on cutting the income tax.
Incredible economic growth. 7.6%!
That's the best in the European Union. It's what a recovery is supposed to look like.
Their unemployment rate has dropped seven points from the recession high. Our unemployment is down a measly two points.
Here's the real stunner. Estonia's national debt is just six percent of GDP! Ours is 102, and in Greece, it’s 159!
And Estonia’s actually running a budget surplus - by one percent of their economy whereas our deficit last year was eight percent of our economy.
This country may be the best model for fiscal responsibility and growth, but it's not alone.
Its neighbors Latvia and Lithuania also passed dramatic government spending cuts in the wake of the crisis, and today they're also growing jobs and shedding debt!
You think this is just about the Baltic States?
How about a country that we're a little more familiar with? Like Switzerland.
Their constitution boasts strong protections making it very difficult to run up debt or increase taxes.
So total government spending is just 34 percent of GDP. We're at 41 percent.
Look at what it means for debt. Their debt is only 41 percent of GDP, and shrinking.
That's while more and more European countries are digging themselves deeper, and it's good news for unemployment.
3.1%. Wouldn't that be nice? The differences are staggering!
So we can rip on Greece for scarfing souvlaki while living on the dole, or Spain for piling on the paella and taking a three-hour siesta.
But surely there's room on America’s financial dining table for what the rest of Europe has to offer.
Try the stroganoff! And I’ll bet you can make room for the Swiss chocolate.
Just think of Europe as an economic smorgasbord.