Monday, May 17, 2010

Is welfare state ending?

Well with the debt crisis getting out of control in much of Europe and the U.S. It is time to think if the welfare state on which these states are based on is really slowly getting eroded because I don’t see how much the taxes are going to get raised to pay for all the promises the politicians have given to the voters and how much they are willing to back it up with solid money. There is only so much the world (meaning the industrialized nations) can produce and if the population is on a decline (like that in Europe) then who is going to pay for all the benefits. Obviously you can’t keep on spending without cutting spending or raising taxes.

No body is thinking along this lines and all the politicians are doing right now is the immediate present or maybe a few years before the next election time. The xenophobic atmosphere in Europe would not allow for more immigration and the population is declining in much of Europe so the only way out is to borrow which they will have to at increasing interest rates but that is for how long. Nobody can borrow forever or the lenders can not lend for ever if they see that there is no way of getting their principal back let alone interest payments. Unless everybody from the voters to the politicians realize that we are on a collision course with uncontrollable debt, we will be in for a nasty surprise in not so distant future.

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