Last month American reporters expressed concern at a recent study published by the Conference Board which claimed that the US economy would be overtaken by China in two short years. This alarming news came just weeks after a ranking of the world’s most powerful people put President Barack Obama at number two — beaten into second place by Chinese premier Hu Jintao.
But if Americans are fretting over their imagined loss of influence in the world, spare a thought for Europe, which is fast becoming the irrelevant continent. Its rapid decline should serve as an example to Americans eager to avoid a similar fate.
Two words help explain Europe’s stunning fall: debt and welfare.
Last month, strikes paralyzed France. Teachers, students, and public sector workers marched against a government they accused of planning savage cuts. Emergency energy supplies began to run low. Troops were dispatched by President Nicolas Sarkozy to protect vital infrastructure.
The cause of such tumult? The democratically elect French Parliament, honoring a campaign pledge by President Sarkozy, voted to increase the national retirement age from 60 to 62.
In a country where the average life expectancy is over 81 years, the public protested at the thought of working an additional twenty-four months to help pay off a national debt in excess of 1.5 trillion euros.
Meanwhile in the United Kingdom, students and teachers threw a tantrum in the middle of London to protest the government’s plans to curb higher education costs. Prime Minister David Cameron’s coalition government plans to raise the cost of attending an English university to £9,000 per year, a debt which will be paid off by graduates over a thirty-year period and only when they begin earning more than £21,000.
That means the average British college student will be expected to pay £15 a week to pay for their education. But to listen to Britain’s National Union of Students, such a program is an example of how “Tory scum” plan to eviscerate government spending.
In view of the scale of government debt in Europe, Cameron and Sarkozy are planning sensible reforms that will pay down the debt and put their respective nations on a path toward fiscal sanity. Both leaders are keen to avoid the recent humiliations suffered by Greece and Ireland. But for the infantile Left and the agitators who advocate for inter-generational theft in order to satisfy their socialist spending binges, such measures are an expression of wicked capitalism run amok.
The intellectual paucity of the Left is reflected in its feeble response to Europe’s sovereign debt crisis. When challenged to answer how Europe should pay down its debt, liberals either attack “greedy” bankers or defense spending. Never mind the fact that top earners in the UK pay 60 pence in tax for every pound that they earn or that Europe’s defense capabilities are already pitifully small — all the Left cares about is protecting its welfare-dependent base.
This whole sorry picture confirms a long-term trend: as Europe dwindles to welfare-driven mediocrity, the rising economies of India, Brazil, and China will eclipse what was once the world’s dominant civilization.
Granted, trade between the US and Europe remains strong, and will remain so for some time. But such trade will surely diminish as Europe is increasingly weighed down by the debts it takes on to furnish its abundant welfare state. The British government is currently borrowing 500 pounds every second. By the time you have finished reading this article, the land of Churchill, Shakespeare, and Thatcher will be another £90,000 in the red.
Europe’s finances are abysmal. This explains why President Obama was wise to undertake such a lavish trip to India last month. While some commentators are concerned the president is not showing due reverence to America’s older, more traditional allies in Western Europe, the $14.9 billion in trade announcements made during the president’s visit explains why he is keen to forge stronger ties in Asia.
America is facing a debt crisis every bit as daunting as Europe’s. Its response to this crisis will determine whether the world’s remaining superpower will endure in the twenty-first century, or become a middle-rate power.
Expanded welfare rolls, mammoth sovereign debt, and high taxation will surely kill the American entrepreneurial spirit which transformed a peripheral British colony into the global economic powerhouse. Such a course has already been chartered by Europe, which now finds itself reduced to the status of global theme park: a place people go to vacation or to buy clothes, but a land devoid of commercial innovation.
Alternatively, an America guided by its founding principles of thrift, hard work, and personal responsibility will have little to fear and everything to gain from the rising economies around the world.
Which way will America turn? President Obama, it’s up to you.
Dan Whitfield is a British writer living in Washington, DC. A veteran of over a dozen election campaigns in both the US and UK, Dan has been active in American politics since he arrived in the country in 2005.