NYC Letter: United States Of France Redux

Day 70 of CHOPE

Again with the ignominy.

WHO'S FRENCH NOW?

March 24, 2009 (WSJ) - The voice of fiscal restraint does not normally have a Gallic accent. But in our newly upside-down world, it's the French who are warning Americans about runaway spending and false Keynesian stimulus hopes.

The latest Frenchman to deconstruct Obamanomics -- after President Nicolas Sarkozy came out last week against raising taxes -- is Jean-Claude Trichet, head of the European Central Bank. As central bankers are wont to do, Mr. Trichet avoided criticizing U.S. policies directly. Yet the dangers of trying to spend your way to prosperity that he outlined will sound familiar to Americans.

... Mr. Trichet was speaking specifically about why European nations are not guilty of spending too little to reverse the recession, as President Obama has suggested. But White House economist Larry Summers, the intellectual architect of Mr. Obama's stimulus, should take the point.

Americans worry about the economy in part because of the infusion of hundreds of billions of taxpayer dollars, not in spite of it. Or as Mr. Trichet put it:

If your people have the sentiment that they will be not better off in an endless spiraling of deficits, they will not spend any money that you give them today.

That is, the money the government gives back to the taxpayer. [Pause.] To be lectured by the French on fiscal management -- and rightly lectured -- Oh! The shame of Obamanomics!

And then there is this:

GREGG: U.S. COULDN'T EVEN JOIN EU DUE TO DEBT LEVELS

March 26, 2009 (The Hill) - The United States wouldn't even be eligible to enter the European Union if it wanted to because of its debt levels, Sen. Judd Gregg (R-NH.) claimed Thursday.

"We won't even be able to get into the EU if we wanted to," Gregg said this morning on MSNBC, "because our government is so large and so huge."

The European Union's Stability and Growth Pact (SGP) adopted in 1997 requires a budget deficit to be less than three percent, and requires a national debt beneath 60 percent of Gross Domestic Product (GDP).

"We've been lectured by France on the fact that we're not fiscally responsible right now," Gregg, the would-be commerce secretary, noted with incredulity.

According to the Congressional Budget Office, the yearly budget deficit would fall well beyond that threshold in coming years.

[Hat tip: Hervé]

A debt-bloated big-government America cannot jump the low bar of EU fiscal governance. The ignominy.

CHOPE.

More money. More ruinous. More French than France.