So it sounds like the European Union nations are close to a deal on how to deal with Greece’s debt crisis—bite the bullet and resign to the fact that bond holders and Eurozone taxpayers are going to have to pick up a big chunk of the tab. The reported agreement would include a “fire wall” tactic to allow more support EU support for Ireland, Portugal and other shaky Eurozone economies in a ploy to reassure investors. Meanwhile, back in the States, the Bloomberg reports Congress continues to wrangle over how to deal with the U.S.’s own debt crisis—with both Republicans and Democrats stubbornly sticking to their positions—no tax increases, no cuts to entitlements, respectively. Rumors emerge that the Obama administration might cut a temporary deal that the Dems probably won’t like. Bond-rating agency Standard & Poor's warned yesterday that a debt-limit increase that didn't address long-term budget deficits would risk a downgrade of U.S. government debt.
The thing both these nascent plans (or lack thereof) have in common is that at the end of the day, ordinary taxpayers will, as always, pick up the tab for government overspending and financial sector greed and mismanagement. In the case of Europe, things have gotten so desperate that the policy wonks can’t even camouflage the taxpayer gouging, thus the public rioting in many of the Eurozone nations. In the United States it’s just possible the Obama administration will cave and allow the Tea Partiers to celebrate a “no tax increase” victory. But what neither political party nor government bureaucrats will discuss publicly is the continual ravishing of taxpayer wealth in the form of constant inflation and entitlement spending.
Yes, Europe and the United States are worlds apart in terms of culture, attitudes and world-view. But put a few central bankers, government economists and elected officials in the room, really listen to what they’re saying, and it’s doubtful you’d be able to tell them apart.
Ordinary taxpayers will, as always, pick up the tab for government overspending and financial sector greed and mismanagement.