Right on Spending
It seems that even the Europeans, known for their socialist-style, government-run economies, think that our nations spending habits are going to get the U.S. in trouble. The former Czech Prime Minister, Mirek Topolanek, announced last week that President Obamas plan for us to spend our way OUT of a recession is a way TO hell. In fact, nearly every European country thinks Obamas spending addiction is over the top and will only harm global markets. And Obama admits that his health care and energy tax plans are only partially reflected in his budget. Obamas budget would set us on a path to increase spending by more than $1 trillion over the next decade, raise taxes on all Americans by $2.2 trillion, and double the publicly held national debt to total over $15 trillion. Plus, it includes $250 billion for more financial bailouts a plan that even Europeans agree is a bad idea.
Wrong on International Regulation
But while Europe seems to worry appropriately about Americas spending habits, they do have a terrible idea of their own: a new system of global financial regulation. On February 22, officials from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands, and the Czech Republic agreed on a seven-point program which aims to ensure that financial market regulatory systems reduce economic “imbalances” and promote market “stability.” This proposed program would enforce these regulatory approaches through a new international body.
This plan is expected to be the topic of discussion at the G-20 Summit this weekend, a meeting of representatives from 19 nations with important economies to the world, the European Union, the International Monetary Fund (IMF), and the World Bank.
This plan poses two threats to American interests:
1) A Threat to the American Economy. The European program calls for financial market activities around the world to be regulated to ensure they foster “sustainable economic activity,” promote economic “balance,” and do not upset market stability. While the broad goals are laudable in principle, the Europeans seem to have in mind an oppressive level of regulation that would both harm economic freedom and stifle economic growth.
2) A Threat to American Sovereignty. In calling for the creation of an international body with enforcement powers, the European program is a direct threat to U.S. sovereignty, unless of course the Europeans want to make the United States the controlling influence over this new international regulator an unlikely intention.
Recent events have highlighted the importance of internationally consistent financial regulatory approaches. And while countries learning from one another through ongoing consultations and discussions is appropriate, each country must retain the freedom to tailor their reforms to the needs of their own economies and societies, and to enforce their own rules through their own domestic authorities.