Europe to lead the financial collapse of the West?

Saturday, August 06, 2011 by: J. D. Heyes
Tags: financial collapse, Europe, health news

(NaturalNews) In case you haven't noticed - and, in lieu of the press generated by the recent battle royal over how much to increase the U.S. national debt, most of you probably haven't - Europe is on the brink of financial collapse. But before you shed too many tears for the Mother Continent, save a few for America because at the pace we're going, we're next.

Expert economists, who have watched the financial situation in Europe deteriorate over the past year, have watched its politicians and policymakers make one bad fiscal decision after another, each of which has served to perpetuate, if not accelerate, the continent's impending economic collapse.

Though Europe's fiscal problems are systemic, they first began to manifest in Greece, Portugal and Ireland, where the global economic downturn badly exposed these nations' habitual overspending. Most of it was on social benefits and entitlements that they haven't been able to afford for years, but they were able to buy mostly by borrowing against their future (sound familiar?).

In Greece in particular, the overspending has put the national debt at about €300 billion, or $413 billion, which is larger than the country's entire annual GDP. Worse, though Greek lawmakers and European Union officials tried to implement austerity measures, they were vehemently opposed by the nation's entitlement generations. In response, workers across the country staged strikes that closed airports and government offices, courts, schools and other public offices.

Even better-than-expected employment data in the world's biggest economy for last month doesn't seem to stem the river of bad vibes concerning Europe's future. On Friday, the U.S. Department of Labor sparked a short run into positive territory for American and global stocks when it released a much anticipated report showing job growth in July was, at 117,000, higher than expected.

But lingering doubts among investors about Europe's ability to pull itself back from the economic abyss took over and left markets dazed and staggering by day's end. In fact, markets in France, Germany and Great Britain - the continent's strongest economies - all ended the day on a negative note.

At this point, maybe the most savvy investors and politicos have already seen the writing on the wall, and the markets are reflecting that realization.

"We are less than three years away from where Greece had its debt crisis as to where they were from debt to GDP," David Walker, former chief Comptroller and head of the Government Accountability Office, told CNBC in an interview Aug. 2.

The negativity is justified. Remember that Greece's debt is already more than 120 percent of its entire annual GDP (gross domestic product, the sum of income from all goods and services). The U.S. just hit that level of debt this week after Congress authorized, and President Obama signed, another increase in the government's debt ceiling. Worse, economic growth in the U.S., like Europe, is also floundering.

See the parallel?

"The fact of the matter is that government has grown too big, promised too much and waited too long to restructure. Our problem is overwhelmingly a spending problem," Walker says.

And while that would appear to be obvious, lawmakers set the entire country up for failure when they, some time ago, forgot about stewardship (taking care not to injure or harm the next generation of Americans) and instead focused on buying loyalties here and now using the U.S. Treasury as a personal piggy bank.

European leaders have done the same thing. The only difference between Europe and America is that they appear to be closer to being swallowed by the coming fiscal tsunami.