PARIS — Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.
Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.
Yada yada yada
What happened? Well to balance the benefits at any given level, the birth rate and death rate have have balance, otherwise grows at exponential rates. The exponential growth rate equal to the difference between births and deaths, which is unsustainable within a generation.
When unsustainability is reached, the economy makes an adjustment. But economies reduce dimensionality, shorten production lines, when things are smooth. So, when the adjust process comes, the economy can only make large adjustments, it has given up precision to save costs.
That is what will happen to Obamacare, large companies initially see this as low hanging fruit, allowing them to shed a good deal of their human resources budget. The resulting exponential growth rate of government health care then requires an adjustment, but the corporation have left the field, and Congress can only make imprecise changes.
The solution? Keep large corporation in the government loop so we have the precision to make adjustments, keep large corporations well taxed.
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