U.S. and Europe: New Bailout and Freebie Proposals
You'd think, by now, some fiscal restraint would be in order -- in the U.S. and Europe.
Before getting to the new bailout proposed by a U.S. senator, a real humdinger from a European Union commissioner -- government subsidized vacations! According to Steve Forbes in the June 7 issue of Forbes, "At a time when European economies are drowning in debt...along comes the EU to declare that tourism is a human right and that governments should subsidize vacations for those who can't afford nice trips."
Apparently, Antonio Tajani, the EU commissioner for Enterprise & Industry, didn't get the "belt-tightening" memo.
In America, it's U.S. senator Bob Casey who is the main driving force behind a proposal to bailout union-sponsored pension plans. The senate bill has an interesting title: "Create Jobs and Save Benefits Act." According to The Wall Street Journal, "the bill would transfer tens of billions of dollars worth of retiree liabilities to the Pension Benefit Guaranty Corporation, i.e., to taxpayers."
No uniform agreement exists on the cost to taxpayers; estimates range from $8 billion to $165 billion.
EWI's President Robert Prechter warned his Elliott Wave Theorist subscribers of major problems with pensions well before the financial crisis began.
"...we fully expect to see bankruptcies, bond defaults, the evaporation of pensions, unemployment, bank failures, economic collapse, and depression. Some still wonder, when will they come. But the trend is already underway. The U.S. is in fact already bankrupt and poverty-stricken; these facts just haven't yet become a matter of record. When they do, the public's anger and dismay will be tremendous because its current expectation of business as usual is the complete opposite of the reality that's coming." -- Bob Prechter, October 2005 Elliott Wave Theorist
We at Elliott Wave International believe the financial excesses and the extended topping process in financial markets are all coming to a natural conclusion -- a conclusion which has only started to unfold. "We've turned the corner" news stories will likely only be temporary.
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