European Fantasies about Balanced Budgets

Europe is if anything more screwed up on the economy than the United States. At the Ecofin on Tuesday, the comedy of the absurd went on stage. Since all EU governments are over the 3% deficit (except Malta, Andorra, and Finland), the EU Commission is starting a procedure against 24 countries! Everyone is broke, everyone is bailing out the bankrupt banking system. (See link, LaRouchepac)

Christine Lagarde on one side, and Steinbrück on the other side, staged a fight on whether to lift the 3% cap, both of them on false grounds. Lagarde proposed that all interventions related to the crisis not be counted in the deficit; Steinbrück opposed it, as this would put no limit on money-printing. Neither of them pushed the right thing, i.e. lifting the cap on capital investments, and eliminating all imperial institutions. Time to invest in infrastructure again, give credit for the projects from national governments, for the next 50-100 years.