Posted by Rojas @ 1:52 pm on March 30th 2009

What disciplined leadership looks like

Chancellor Angela Merkel of Germany denies President Obama’s request to hyperinflate her nation’s money supply in order to prop up US exports:

Where long lines of unemployed people are the indelible image from the Great Depression in the United States, it is the wheelbarrows of worthless currency during the hyperinflation of the 1920s that preoccupies Germans. Mrs. Merkel has exerted discreet but stubborn leadership in Europe to prevent the kind of overspending that could lead to inflationary pressure on the euro.

It is not, she pointed out, simply a philosophical difference. Borrow and spend today, repay down the road, is a particularly difficult proposition for a country with a shrinking population, she said.

“Over the next decade we will undergo a massive demographic change, and, therefore, borrowing is a greater burden for the future than in a country with a much more continuously growing population, as in the United States of America,” Mrs. Merkel said.

Rather diplomatic of her to let us off the hook as easily as that, I think. A “growing population” only assuages debt if the population is growing at something like the same rate as the debt incurred. Which ours isn’t. At all.

Yes, we have now reached the point at which even European social welfare states are looking askance at our fiscal profligacy.


  1. only assuages debt if the population is growing at something like the same rate as the debt incurred.

    It also assumes the population will remain as productive and innovative, which is also most certainly not true.

    Comment by daveg — 3/30/2009 @ 5:22 pm

  2. And now, after lobbing billions into GM and Chrysler, Obama & Co. are talking the bankruptcy option? Madness.

    Comment by James — 3/30/2009 @ 7:03 pm

  3. Well, they haven’t taken that option yet.

    One does wonder, though, if these companies aren’t “too big to fail” after all, what the initial cash transfusions were for.

    Comment by Rojas — 3/30/2009 @ 7:17 pm

RSS feed for comments on this post.

Leave a comment

You must be logged in to post a comment.