The Obama Administration is all about the bailouts. No ifs, ands, or buts about it. Whether it’s Wall Street, General Motors, or Fannie and Freddie here at home, or Greece and the European Union abroad.
The fact of the matter is our nation’s debt is about to surpass $13 trillion, yet we continue to expand the size and scope of government through programs like Obamacare. And in order to do this, we’re spending money we just don’t have.
Within ten years, America’s debt will reach 90% of our nation’s GDP according to the CBO. To put that into perspective, Greece has a debt-to-GDP ratio of 112.5 %.
We need only look abroad and observe Europe’s current economic crisis to see what America has to look forward to in the years ahead.
Greece is nearing economic catastrophe caused by out of control spending, excessive borrowing, and large and inefficient government, all leading to stagnant economic growth. You’d think Washington would learn a lesson from Europe, but it seems like we’re only pressing down harder on the accelerator.
As the world’s largest contributor to the International Monetary Fund, taxpayers are already on the hook for billions in a bailout of Greece. On top of that, the Federal Reserve opened a program on Sunday night that would send U.S. dollars to Europe through foreign central banks. These central banks then lend out the money to banks within their country to ease economic tensions.
With California bankrupt, and many states making very difficult budget cuts, what sense does it make for us to bailout the European Union, which in the most ironic of twists was created with the goal in mind to be an economic competitor to the United States. While a healthy EU certainly helps the U.S., it makes no sense for the U.S. to pay for other countries bailouts when irresponsible decisions and reckless spending put them there in the first place.
At a time when we’re facing a debt crisis of our own, opening the door to European bailouts is fiscal recklessness at its best. After all, if Spain or Portugal comes knocking on Uncle Sam’s door next, how can we turn them down? The precedent has already been set.