Not quite right, but a t leat getting CLOSE ...
SPENDING, in and of itself is not the problem. Even if spending increases at a rapid rate - as long as there are revenues to cover that spending, all is well!
Obviously, there comes a point when revenues via taxation (in whatever form) can no longer be increased. If spending, after reaching that point, continues to increase, governments must resort to borrowing (deficit spending) to cover the gap. Equally as obviously, there comes a point when lenders are no longer willing to lend at “reasonable” rates. THEN there is a major problem.
IOW, deficit spending is the root cause of the European (and our) “Crisis”. If we only spent what we were willing to pay for in current revenues, there would be no crisis!
The US Government spends every cent it receives via taxation (all forms) to pay for Social Programs, Pensions & Interest on the debt. That is over $2.2 Trillion - Defense adds 600-700 Billion and the “Rest” of the Government ~500Billion. We borrow 1 Trillion / year, 33% of the Budget.
No one is ever going to “grow” out of that hole ....
“With the exception of a few top-notch thinkers such as Pierre Bessard and Allister Heath, there are very few people in Europe who can intelligently analyze public policy, particularly with regard to fiscal issues.”
“Top-notch thinkers”. Snicker.
Income = A
Spending = B
Sane “fiscal public policy requires:
B < A
So at the ceremony, does my Nobel Prize in Economics get presented to me by two comely Swedish lasses?