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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Saturday, May 12, 2007

Euro Debt...

And for all the American socialists that want tax and spending policies harmonized with socialist Europe, have a look at these statistics. Despite much higher taxes and greater off-balance sheet promises governments there still operate with these kind of statistics....
In the euro-zone, the average government deficit shrunk from 2.8% of GDP in 2004 to 2.4% last year. Meanwhile, government debt, measured against GDP, increased from 69.8% in 2004 to 70.8% in 2005. In the whole Union, the respective figures were 2.6% and 2.3% for government deficit and 62.4% and 63.4% for government debt.
getting back to Social Security, the US has a present value shortfall between collections and disbursements of around $34 trillion. Therefore, in order to pay for such largess, taxes for these types of expenditures will have to rise dramatically, potentially hurting the economy and younger people asked to pay. I suggest, although I cannot find such data, that Europe faces a similar if not worse situation.

Europe's economy and population is similar to that of the the US. Additionally, the population there is aging more rapidly than the US and will face similar pressures as people there reach retirement age. There will be fewer taxpayers to pay taxes to support their retired parents. Also, benefits in Europe have been growing faster than GDP and these pension systems are largely pay-go as is the US Social Security system.

I think that i will get into the dog and cat food business since I think that many many retired people will be forced to live on a lot less than our parents do today.


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