A Lesson for the US
The story of the European debt crisis should be viewed as a warning to the United States to rein in its budget deficit and mounting debt.
While financial markets worldwide ride a roller coaster of uncertainty about the fate of the Euro, the US Congress should be working tirelessly to avoid the same crisis.
“We can’t afford to sit idly by and not do anything about our own financial problems,” says GTRUST’s Steve Page. “The United States has a $15 trillion debt due to overspending by Congress and the President.”
The leaders of 23 European countries agreed early Friday to bind their nations together in a pact to limit government spending and borrowing but failed to persuade Britain to sign up, according to news reports. Leaders from Germany and France want a unified monetary policy that all EU countries will follow, with the hope such a policy will stabilize the Euro, reduce debt and prevent a recession. But, Britain wants no part of such a policy, partly because it doesn’t want tighter controls over London’s crucial financial services industry (London is home to much of the world’s hedge fund industry). England has never been part of the Euro, choosing instead to remain with its centuries-old Pound.
Europe may spend the next several years trying to improve its sovereign balance sheets, but progress is not guaranteed. It’s possible we may hear rumblings about the European debt crisis a year from now. In the meantime, the United States should not wait to get its own fiscal house in order. December 12, 2011
