Almost a decade ago, Europeans and many progressive Americans were lamenting how the United States was going to miss out on the 21st-century paradigm symbolized by the robust European Union. Neanderthal Americans were importing ever more oil while waging a costly “war on terror” and fighting two conflicts, in Iraq and Afghanistan. Our budget deficit in 2003 hit $374 billion.
The EU avoided foreign conflicts and embraced soft power. Its declining military budgets and centralized transnational government ensured that it could address global warming and fund ever-expanding entitlements. Even the poorer Mediterranean nations reached new heights of prosperity. The Greek economy soared. Spain's real estate market was to become the hottest in the world. Italy seemed to resemble Germany more than Portugal.
President George W. Bush was caricatured as the symbol of backward free-market capitalism, rank American consumerism and U.S. imperialism abroad. Only with the election of the progressive Barack Obama would Europe finally find a like-minded, sophisticated American president.
Yet European Union prosperity has now proved a phantom — one conjured up by accounting gimmickry, borrowed German money and corrupt EU apparatchiks. Neither the EU at large nor most individual European nations can sustain their present rate of redistributionist entitlements.
The worry is not that Greece will implode, but whether France can remain financially solvent. More realistic countries such as Germany, Latvia and Sweden are quietly drifting away from the socialist model, preferring balanced budgets, lower taxes and fewer regulations.
The EU may be worried that Obama's United States is becoming more like the EU at the very time many in Europe are starting to take a second, kinder look at the old free-market model of the United States. An America of low taxes, low unemployment and robust growth once meant a huge market for European goods, as the United States drove a prosperous world economy and had enough cash to protect the Western world.
All that has changed after four years of unprecedented $1 trillion-plus U.S. budget deficits. National debt has hit a historic $16 trillion, with no reversal in sight. Unemployment has been at 7.8 percent or above for 48 consecutive months. GDP growth is calcified at an anemic 2 percent. Record numbers of Americans draw on unemployment, disability and food stamps.