June 12, 2012

Sovereign Debt

We hear more and more about Europe's sovereign debt crisis. Spain seems to be the next domino getting ready to fall. And we are beginning to see that if you follow the dominoes to the end, there is no last country standing. We all take the fall, in some measure, large or small.

The sovereign debt crisis in Europe stems from the inability of several countries—often referred to as the PIGS: Portugal, Ireland, Spain and Greece—to continue to borrow money to pay their bills. I submit this results from a larger issue of sovereign debt owed to we the people, the inability of our leaders—our sovereigns, if you will—to do their jobs. The continuing failure of legislators and presidents and prime ministers to even agree on a common definition of the problems, much less find an agreed-upon course of action to address those problems, constitutes the true sovereign debt crisis that threatens to overwhelm us all.

Part of the problem in Europe is that the European Zone was created with the idea that politics would follow the money into a true union of countries. That has not happened, leaving a system ill-suited to tackling a problem like the current sovereign debt crisis. The political processes needed to forge a common consensus among the European nation-states simply do not exist.

We don't have that excuse here in America, home of the free, land of the dysfunctional government. As the longest-running democracy on the planet, we have plenty of history to fall back on to show us the virtues of compromise. Instead, we look more like a convention of Marxist socialists trying to out-vie each other in their ideological purity, prompting Jeb Bush to remind his fellow Republicans that Ronald Reagan built his legacy by finding common ground with Democrats.

The sense of approaching doom is palpable. Nobody I know thinks the future looks anything other than immensely foreboding. We have a debt to be paid. A debt to our planet. A debt to our children and grandchildren. It is time for our politicians to quit bickering and get down to the serious business of reducing our other sovereign debt by doing what we all know needs to be done: make hard choices that demand sacrifices from all of us and then stick to them. There is no other road forward.

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