Greetings from Europe where your humble author is about to embark upon a two month internship in what may or may not end up being his profession (though if he is going to eventually be able to pay for the loans he took out to spend what will ultimately be 3+ years figuring it out, he will have to find a pretty good replacement if the 'may not' scenario comes into play). As such, he is certainly well-placed to discuss the current state of affairs in Spain, though luckily not highly impacted by them. At least not yet...
Spain is in a state of general strike. For those unfamiliar with what a general strike looks like, check out some amazing photos here. Citizens of the Iberian state as well as others around Europe (most notably Belgium) are striking because they are unhappy that, in the face of crippling deficits, the government has decided on cutbacks and some changes to the retirement system, including an increase in the retirement age by two years to 67. While it is true that the strikers and demonstrators around the capital and elsewhere echo the pain of their Hellenic cousins from earlier this year it is also true that they share their shortsightedness. This, of course does not make the situation any easier to fix, but can provide lessons for the future.
Spain, like Greece, is in rough economic shape. Nobody can honestly deny that. However, though they cannot deny it, Spaniards and Greeks would like to ignore it. They want to keep continuing to pay for things without having the funds to do so. This is clearly untenable. Either nations make changes in these situations or they risk collapse. In the end, reforms will very likely be made, but with some critical ones likely sacrificed at the altar of the people and left for the next generation to address. Immediate problem averted, things will return to a state of relative normalcy. This will be no more than a stopgap, though, and will predictably lead to additional problems in the future.
There should be some familiar themes in this analysis for American readers. There should be some lessons to be learned as well. A nation collectively standing on the edge of an abyss is never in a mood to look to the future; there are much more immediate concerns to address. Therefore, though it is always painful, needed reforms are sometimes easier to implement when a nation is not in its most dire state. American lawmakers would be wise to take notice of this as the US comes out of its current economic malaise. And though changes to social security, retirement ages, and budget cuts are never popular with voters, citizens would be wise to allow lawmakers to make necessary changes before violent protests occur, and not while they are in progress.
Though the sanctity of the dollar as the currency of reserve affords some protections that individual countries in the EU could never count on, this doesn't mean that current account deficits and the limitless spending of its government will never catch up to Americans. It is time for Americans to realize that the current state of the union can not indefinitely remain its equilibrium. Otherwise the next round of dramatic photos might be coming from the National Mall rather than the streets of Brussels and Madrid.
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