Fareed Zakaria Asks 'Is Democracy Part of Europe's Economic Problems?'

CNN's Fareed Zakaria asked a question this weekend guaranteed to raise some eyebrows not only on both sides of the aisle but also on both sides of the Atlantic.

On the program bearing his name, Zakaria amazingly asked Sunday if the economic problems in Europe are caused by democracy and not austerity (video follows with transcript and commentary):

FAREED ZAKARIA: Everyone is looking at Europe these days as economic and political protests mount across the continent.

The downward spiral has produced a great debate about the virtues of "austerity," the idea that governments with large budget deficits must reduce these deficits -– mainly by cutting spending. If they don't get their budgets in order, so the idea goes, they won't be able to borrow money and will face a fiscal nightmare of ever-rising interest rates.

The problem is that as these governments cut spending in very depressed economies, it has caused growth to slow even further -– you see government workers who have been fired tend to buy fewer goods and services, for example -– and all this means falling tax receipts and thus even bigger deficits.

Sadly, Zakaria once again ignored that these countries also raised taxes to try to balance their budgets, and the mixture of higher taxes and reduced spending is what further damaged these economies.

Unfortunately, the spending-loving media in America are routinely forgetting to mention this important component of European economic policy as they bash austerity.

Zakaria even cited one of our most dishonest economists to further prove my point:

ZAKARIA: So, economists like Paul Krugman urge: abandon the austerity program, spend more and get budgets in order once the economy has recovered. The problem, in the mind of Keynesians like Krugman, is that European elites, particularly in Germany, have embraced the wrong economic doctrine.

Typical left-wing nonsense. But next came some eye-opening sanity:

ZAKARIA: Now, having been in Europe briefly earlier this week, I don't think Europe's elites -– especially German elites -– have really embraced some alternative view of economics. Most do understand that cutting spending during a recession slows down the economy further.

But here is what motivates them: They don't believe at all that any of the governments in question would ever get their budgets in order once the economy recovered. They believe that many of these countries in trouble have economies that are uncompetitive, hobbled by bad regulatory and tax frameworks and also by large and inefficient governments, with ever-increasing entitlements doled out to their citizens. The crisis provides an opportunity to start wholesale reform. Markets have signaled that they will not lend to these governments unless they take measures to get their houses in order, so this is a golden opportunity to get this reform process going.

Many Germans and northern Europeans I have talked to do seem to understand that, economically, the smart thing to do might be to spend now and to cut later. But many in Europe, especially in Germany, believe that later will never come.

Exxxxxactly!

And this is why conservatives in America don't want to cave to further stimulus now because the Democrat promise to cut spending once the economy improves never happens.

Instead, just as has happened after Obama's massive spending increase in 2009 and 2010, those levels become the new baseline from which future budgets are calculated.

Any cuts to that level are considered Draconian as well as inhumane and are therefore lobbied strongly against by the Left and their media minions typically including Zakaria.

But on Sunday, the CNN anchor offered a different take:

ZAKARIA: In reality, governments spend in bad times and then spend more in good times. So the disagreement may not really be over economics, but over politics.

This is a sad state of affairs because what many people are worrying about, at root, is whether democracy has become part of the problem. After all, politicians have gotten elected over the last four decades in the West by promising voters more benefits, more pensions and more health care. The question is, can they get elected offering less?

That's what stops many Europeans from abandoning austerity and embracing another round of stimulus spending. And I think these worries are shared by many in the United States as well.


Exxxxxactly!

But is democracy the problem in America or a liberal media that makes fiscal sanity impossible?

Consider what happened in 2005 when President Bush proposed Social Security reform and the Left along with their media minions shamelessly misinformed the public that the entitlement program was financially sound for decades to come and wasn't in need of repair.

As a result, Bush and his Party caved to the pressure, and seven years later we find out Social Security will go bankrupt in 2033 if we don't make serious changes to it.

Consider, too, how the press dishonestly report even a slowing in the growth rate of a program as being a cut to that program.

And whenever anyone on the right offers a solution to our budgetary woes - Rep. Paul Ryan (R-Wisc.) for example - he or she is savagely attacked by a media hellbent on blocking any real spending cuts.

So don't blame democracy, Mr. Zakaria. Blame your colleagues who are regularly doing everything in their power to undermine it.

Noel Sheppard
Noel Sheppard
Noel Sheppard, Associate Editor of NewsBusters, passed away in March of 2014.