UK Central Bank: “US Like Greece…Only Bigger”
Cheery and surprisingly blunt assessment from Mervyn King, Governor of the Bank of England
Mervyn King, Governor of the Bank of England, fears that America shares many of the same fiscal problems currently haunting Europe. He also believes that European Union must become a federalised fiscal union (in other words with central power to tax and spend) if it is to survive. Just two of the nuggets from one of the most extraordinary press conferences I have been to at the Bank.
Of course, being at heart a statist euro, his solution…more government!
Yeah, that’ll work.
America, and many other large economies including the UK, share some of the same problems as Greece with its public finances:
Every country around the world is in a similar position, even the United States; the world’s largest economy has a very large fiscal deficit. And one of the concerns in financial markets is clearly – how will this enormous stock of public debt be reduced over the next few years?
How will this insanely large deficit be reduced? Why, by the amazing and inspiring Power of M.U.M.*: we reduce it by making it bigger and then declaring that “our plan is working.”
Quite simple, really.
*Magic Unicorn Method
Biz, Nanny State, Politics | Mr. Bingley | 
May 14, 2010 7:20 am
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Mr. King might read Mr. Klugman’s op-ed article “We Are Not Greece” in today’s New York Times. Last night we enjoyed superb calamari, Dolmades and eggplant fritters with a deliciously crisp Greek white wine, Santorini, and so far not a protester in sight!
Sounds like a wonderful time, Ave! Glad to hear that all is well so far. We’ve been concerned about y’all.
Here’s Krugman’s op-ed. It’s his usual mix of kool-aid inspired rosy projections and Bush-bashing; his ‘plan’ is classic “inflate your troubles awy”-ism. One of his better laugh lines:
“Put those projections together with the Obama administration’s policies, and they imply a sharp fall in the budget deficit over the next few years. ”
Ha!
A sharp fall in the budget deficit?
I guess it’s all relative and it all depends on the definition of ‘sharp fall, eh?
Too bad Krugman doesn’t know any economics. What’s that you say, he’s a Nobel Prize-winning economist? Yeah, and Yasir Arafat won a Nobel Peace Prize. Your point is? That he claims to be an economist does not mean he actually is thinking like one when he writes his screeds.
There is only one solution to the fiscal problems we have and that is a drastic cut in government spending at all levels. Raising taxes will not give a good result, because irresponsible pols and bureaucrats will simply spend it all and demand more. The history of the New York City bankruptcies shows this. NYC piled taxes on top of taxes, taxes of every conceivable kind, and a few that were not conceivable until the greedy schmucks in city government and government employee unions thought them up, and still they never managed to make the deficit go away.
Enough is enough. Reduce the Federal spending to 15 percent of GDP and state/local to 10 percent, max. The Feds generally take in about 18 percent of the GDP as taxes. The extra three percent can go towards paying off the Federal debt. When we have reduced it significantly we will then have a reserve cushion for the Fed gummint in case of emergency, which we do not have now.