I subscribe to a financial news service, one that is aligned along the ways I think about the economy and has more than a little Austrian econ flavor. Anyway, one of their commentors was discussing all of these countries with all of their financial issues. He pointed out that huge debts and deficits are common during times of war. Wars are expensive and there is a lot at stake. Sometimes, you have to deficit spend just to keep the barbarians from breaking down the gates.
Here’s the thing, the wave of budget problems, enormous deficits, and ballooning debts sweeping across countries had almost nothing to do with war. Countries seem to be running themselves into the ground by just doing business as usual. That should make everyone pause and question what the government should really be doing, and yet that doesn’t seem to be happening to any great extent.
Yes, the US is fighting a war, and it does have a big effect on our bottom line. But what about Ireland? Greece? California? What excuse do they have? What excuse do the people living there have? Will the US be able to cope with a war AND ballooning deficits and debt? We’ll see, but seeing how some of the European nations have fared doesn’t make me real optimistic…