I love Europe. I think that it is marvelous and wonderful. Old Europe, New Europe, middle-aged Europe; it matters not. I am a fan.
But I have never bought into the idea that the European welfare state is a viable model, either for Europe, or for us. And with this article, we see that the European welfare state may soon go the way of the dinosaur and the dodo bird. This despite the fact that Europe had every advantage thought possible in order to make its welfare state work:
Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.
Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella. They have also translated higher taxes into a cradle-to-grave safety net. “The Europe that protects” is a slogan of the European Union.
But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.
For as long as any of us can remember, we were told that higher taxes, and lower defense spending would bring about a better quality of life for us all–both in Europe, and in the United States if only we were wise enough to adopt European social welfare policies. So much for that promise. The ongoing financial crisis in Europe proves conclusively that the European social model is no match for free-market economic policies. It is still fashionable to criticize the latter, but how many people want to continue doing that–while extolling the supposed benefits of the European social model at the same time–when the verdict has come in, and when we see that Europe’s social policies are completely unsustainable?
We ought to take cues from the Europeans in one sense; it is high time to reform our Social Security system so that the retirement age is higher (the natural consequence of increased life expectancy). Unfortunately, there is little talk of that here in the United States, which means that we will have a pension crisis of our own eventually to accompany the general fiscal crisis that comes from a rapidly expanding budget deficit and national debt.