Friday, October 22, 2010

Taking French lessons ...

I can't pretend to have much admiration for France.  During the 20th century, the French have routinely rubbed Americans (including me) the wrong way.  In fact, there are a number of failures of the French in succession that must have frustrated members of the American government beyond belief.

At the onset of World War II, the French military put up a woeful defense of their nation, which fell in less than a month to the Nazis.  Even more frustrating was their policy of appeasment that allowed Hitler's rise in the first place.  If their failure to hold off the Nazis wasn't bad enough, members of the French government capitulated and allowed a puppet government to be set up in the remaining territory that was France.  Even worse is the fact that French "hero" Marshall Philippe Pétain's "rule" of Vichy France earned him a death sentence and muted his great contributions from Wold War I (see: Battle of Verdun:  Ils ne passeront pas). 

After the defeat of the fascists, France also caused headaches for America by pariticpating in an attempt to leverage Egypt out of key land (with the help of Great Britain and Israel) in the Suez Canal Crisis of 1956.

The worst transgression, though, came via a colonial problem in the small nation of Vietnam.  The French were unable to maintain control of their colony and sought the help of the United States.  American involvement was secured only when France noted Vietnam was a country bent on turning communist (triggering fears of the Domino Theory and the containment policy).  And we all know how well that turned out for the United States.

So as Americans, we can't stand the French, right?  They still don't have an extradition treaty with the United States because we allow the death penalty.  They're snobbish, self-righteous, arrogant cowards ... or are they?

I can't believe I'm about to write this -- but the French government is doing what Americans are too gutless to do.  The French government isn't afraid to make difficult decisions. 

In case you're wondering what I'm referring to, it's the recent decision by the French Parliament to raise the national retirement age from 60 to 62 and increasing the age for full pension from 65 to 67.  Why?  It's a measure that is designed to save money.  France is heavily in debt and making these moves to ensure pensions will be secured for future generations.

Most French political leaders are behind the measure, including President Nicolas Sarkozy.  However, protests have erupted all over France.  Protests include blocking airports and more importantly, blockading all 12 of the nation's oil refineries and over 14 of the oil terminals.  This has translated to over 1/3 of French gas stations to be without fuel. 

To his credit, Sarkozy had police break the protests, blockades and detained those who were violenting acting against French authorities. 

He noted the "troublemakers" would not have the last say in the French republic.

So how does this mess in France translate to American politics?  Quite simply, we have a far worse financial situation than our neighbors across the Atlantic.  Our national debt is nearly $14,000,000,000,000.  If you haven't noticed, that figure is in the trillions -- that's 12 zeros for you folks counting at home. 

The United States has been spending at a deficit for the last 10 years at an alarming rate.  To slow down this runaway freight train and prevent large scale borrowing from Asian lenders (i.e. China), the United States will have to make some tough decisions about where we spend our finances. 

Certain policy areas will require the United States to make serious changes, however people lack the courage to do what is necessary, so they mortgage the nation and pin it on the next generation of Americans.

One specific example?  Social Security.  The program needs to be altered.  The money being paid out to citizens is now starting to exceed what is being paid in through tax dollars.  Though the reserve funds for this program will stretch out to meet the needs of retired citizens, eventually the money will bleed out slowly over the next half century. 

Solutions to this problem?  Raising the age required to receive benefits is one approach, but many Americans don't like that idea because the age is already 62 for partial benefits and 65 or older (depending on your year of birth) for full benefits. 

Another method would be to raise or restructure our income tax system.  No one really enjoys the prospect of paying more taxes, and this approach will be met with sharp criticism in any corner of the government.

Eliminating Social Security benefits altogether is another thought -- setting a cut-off year of birth for people who have paid into the program and after those citizens, no benefits will be paid out nor will anyone else pay in to the system.  Let private businesses and individuals create their own retirement accounts and simply remove the government from the equation.

The federal government needs to take steps now to prevent calamity for the future.  Social Security, along with Medicare and Medicaid, account for over 50% of the federal budget.  Adjustments to these programs are needed, yet our government refers to them as non-discretionary -- only because making the required adjustments to these programs would likely mean the end of political careers. 

Currently our government faces other difficult decisions, including the current tax cuts from the Bush administration that are set to expire with the start of 2011.  If the government isn't willing to make alterations to the social programs or to foreign wars to start saving money, then perhaps they need to seriously consider allowing these tax cuts to expire to generate more revenue.

Americans want it both ways -- low taxes and great government services.  We should ask ourselves what we truly want.  If we want to keep various programs, then accepting higher taxes has to be a fact of life.  America cannot go on borrowing heavily -- not only is the principal in these loans hampering our growth, but the annual interest alone is more than the GDP of numerous small nations across the globe.  What will it be, America? 

Being a leader requires tough decision making skills, and for once, we can learn something from the French.  Sarkozy and the French Parliament not only did what was difficult, but now they are gutting out the consequences.  Politicans seek to make themselves popular, but they should first seek to do what is right.  Hope members of Congress and President Obama are paying attention.  Vive le France!

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