Europe Doesn't Realize It's Pointing The Other Way.

It's time to look at Europe again for insight into economic strategies during a downturn. Okay, how's Europe doing? Well, countries like Portugal, Spain and Italy have heeded the advise from the International Monetary Fund and European Central Bank to cut spending in order to receive financial help on their debt. How's that going? Not so good, as a matter of fact. They cut spending to the degree they were told, but something unexpected happened. While they didn't take on any new debt, their ratios of debt to Gross Domestic Product rose. Which means that while the debt hasn't increased, because their economies shrank, they're less able to pay the debt service on the debt they have. Hey I didn't mention Greece. Right. That's because Greece is balking at making such huge cuts in spending. They've been watching those other countries and now think maybe cutting spending ain't all that great of an idea after all. The most important things to do is to spur the economy and cut waste. To spur the economy, you need to figure out how to increase the number of jobs. The reason for that is because those folks wind up having to pay taxes on the wages they earn. With the emphasis on 'job' and 'earn'. Of course Greece has to learn how to actually collect the taxes due, a problem they have in that country. But now we need to look back at America. Half of congress wants to slash spending and lower taxes in order to boost the economy and reduce the debt. Really now, doesn't it make better sense to cut waste and spend on infrastructure to help create jobs, something that that half in congress claims government can't do? But I can assure you that the 'market' or 'private interests' won't repair or upgrade the infrastructure unless and until the government says to and funds it. That would translate into tax paying jobs. Increased taxes from those jobs translates into our ability to pay down the debt. It may not be pretty, but it's what we've got.