20 June 2006

Government Will Always Go to the Head of the Line

Europe is our past and our future. Even with unchecked illegal immigration, most of the population of the United States traces its ancestry to Europe. Many of the fundamentals of our laws originate in old Europe, and from mass transit to regional currency to universal health care Europe is always held up as an example of what the US should aspire to.

What? Ye Olde Europe is broken? The socialist uptopia is out of money? Oh, that's OK, just confiscate the funds from those who happen to have earned it, and it'll all be fine . . .

The Swiss National Bank has criticised as dangerously populist and conflict-laden a plan to use its profits to help shore up the state pension scheme. The so-called Cosa initiative, spearheaded by the Swiss Social Democratic party (SP), is that (the profits) of the central bank would be diverted to the Old Age and Survivors' Insurance Fund (AHV/AVS).

"You already know the SNB's position on this topic: we consider this initiative to be angerously populist, since it presents an unrealistic picture of our profit potential," said SNB chairman Jean-Pierre Roth at its half-yearly news conference in Geneva yesterday. "In view of the growing financial needs facing the Old Age and Survivors' Insurance Fund (AHV/AVS) in the coming years, the gradual reduction of our distribution potential will inevitably lead to continuous tensions between political circles and the SNB."

"Even if our independence were left intact, this conflict-laden climate would be detrimental to our credibility in the markets. It is widely accepted that shielding the central bank from political pressure constitutes an important factor in the preservation of monetary stability. In fact, this is why there is no country whose central bank has become the direct financial source of funding of a social security scheme."

Some think Europe is full of model societies and ultra-refined governance and policy, but Europe and its problems are actually a fully-realized early warning system for the United States. Today we see the price to be paid for the election of spineless politicians who put their own short-term glory ahead of prudent long-term stewardship. In order to perpetuate the cancerous practice of escallating tax and spend, they give away every social "nice-to-have" to everyone, without a thought about the ongoing sustainability and growth of the promised spoils.

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