It is not too often that major government leaders admit their nation has been traveling on a path to financial ruin. So it was a surprise when the head of the European Council -- a body made up of the leaders of all the member states of the European Union -- openly acknowledged that Europe's welfare system cannot be sustained any longer.
"We can't finance our social model anymore," European Council President Herman Van Rompuy said just after the EU approved a trillion-dollar bailout to failing European economies such as Greece and Portugal.
While the U.S. economy is feeble, some European countries are in even worse shape. To head off collapse, European governments are taking a huge "gamble," The Washington Post noted. They will "rewrite a post-World War II social contract that has been generous to workers and retirees but has become increasingly unaffordable for an aging population."
That is an amazing turn of events. For decades, even the hint that the welfare state in Europe might be rolled back was silenced by wild protests and strikes by government unions and activist groups. Well, the activists and unions are still protesting and striking, but Europe's breakneck spending has left it no choice. The money to continue its welfare and early-retirement benefits and to support the huge number of workers on government payrolls just isn't there.
Confiscatory taxes, excessive government and environmental regulation of the free market have crushed economic activity in much of Europe. Unsustainable tax rates have destroyed the incentive for producers to produce, but have not reduced consumption of goods and services, and the demand for benefits. It was only a matter of time before the depleted gravy train left the station.
In light of the disaster that socialist policies have brought down on Europe, is it not extremely troubling that our own Congress recently socialized our health care system -- which will force huge tax increases and reduce our own productivity? Is it wise for us to embrace a European-style system that even the Europeans admit is failing?