Some reporters have been asking why there isn't a large tea party in Europe. A recent item in The Wall Street Journal even encouraged Europeans to set up their own tea party.
Then it hit me: There isn’t a tea party in Europe because the tea-party ideas are already being forced on Europeans.
In February 2009, CNBC commentators were talking about the Homeowners Affordability and Stability Plan (a $75 billion program to help up to nine million homeowners avoid foreclosure).
While broadcasting from the floor of the Chicago Mercantile Exchange, CNBC’s Rick Santelli stated that the government was “promoting bad behavior" and suggested that he should throw a "Chicago Tea Party." He was greeted by cheering from those on the CME floor.
The rant by Santelli became an instant media sensation. Tea-party groups soon sprouted across the nation, and the rest is history. It was really an economic movement from the beginning.
Although there are many tea parties with different agendas, the main theme is to control government spending. Tea-party members are scared that the government is taking on too much debt and burdening our future generations with higher taxes.
The government’s debt as a percentage of GDP has soared since the financial crisis started (contrary to popular belief the debt-to-GDP ratio stayed essentially flat during the first seven years of George W. Bush’s term).
Tea-party members are scared that if debt gets too high, there will be disastrous consequences and no one will buy our debt anymore.
In Europe, citizens’ fears are playing out. Many European countries have taken on too much debt and many investors are concerned that these countries won’t be able to pay it back.
Therefore, many countries are starting on their own to institute austerity measures, which are aimed at scaling back entitlement programs.
The irony is that while Europe realizes it made a mistake by borrowing too much in the past and is attempting to rectify it, here in America we are following the old European model of borrowing and adding entitlement programs. That is what the tea party is trying to stop (whether they are successful remains to be seen).
In Europe, governments are being forced to cut spending because investors won’t buy their debt if they don’t. Although the citizens are angry in many countries about the cuts, European governments are still going ahead with the plans.
That is why Europe doesn’t need a tea party; the government has finally gotten the message. One can really say the creditors, both domestic and international, are the tea partyers.
Hopefully, America will never come to that point, but in the meantime, America’s tea party is trying to prevent a disaster.
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