Germany, who has a high savings rate and spends so much less than they take in that they’re giving everyone a tax rebate this year, points out that America isn’t doing so well in the budget area.
“The U.S., as far as I know, has a worse debt-to-GDP ratio than the whole eurozone, and we are talking about the eurozone, not about the United States and that Congress can’t get its act together,” said a member of the German press during the briefing. “So from the European perspective, it seems that this country is in a bigger mess than Europe. We are not proud where we are. We know that it’s slow and not bold, and so on, but at least they are doing something; they are deciding something, they’re trying to pull that through. And here, nothing is happening — third time this year,” he added, referring to the Supercommittee failure.
All of which, IMHO, has to do with the fact that no one wants to man up and tell Americans the year before an election that they can’t afford all the nice things they’ve been relying on the government to give them and the choices are cutting spending and higher taxes. See, if we did both, neither side would be happy, which I believe is the essence of a good compromise and has made America the well-governed country it’s been for the last 200 years. It’s not fun getting out of debt, and I’m sure none of this will be helpful to the brutalized economy that flinches like an abused child at the slightest hint of bad news, but at least we would stand a chance of lowering our deficit.