The economic and political tumult in Europe has continued this week with anti-incumbent votes in France and Greece as well as signs of disaffection in Italy, Great Britain and Germany. The electorate is angry, and the election results have raised renewed concerns about whether Europe's most debt-burdened countries will stick with their quest toward fiscal discipline.
On this side of the Atlantic, it's tempting to view the uproar in purely parochial terms — out of concern that the U.S. economy will continue to be encumbered by the eurozone crisis. Or, perhaps, as evidence that President Barack Obama will get a taste of the same anti-incumbent fervor this fall, particularly if the nation's recovery falters.
But the real lesson to be drawn from the rise of France's Francois Hollande and others is that many in Europe are fed up with austerity measures. In choosing Mr. Hollande for president over incumbent Nicolas Sarkozy, the French embraced socialism — the real deal, not the kind President Obama's opponents blithely accuse him of — over conservatives and further cuts to government spending.
While European voters have long had a greater taste for taxpayer-financed social-welfare programs — and higher expectations of cradle-to-grave services, from health care to higher education — than their U.S. counterparts, there are signs that Americans are perfectly capable of mustering a substantial anti-austerity reaction, too.
The widening gulf between the haves and have-nots, the 1 percent and the 99 percent, over the past three decades is not merely some partisan invention of President Obama, the Democrats or the Occupy Wall Street protesters but a real and worrisome trend fueled largely by the financial sector. Income inequality inevitably gives rise to economic instability — which is essentially what's happening in the European Union, where income differences are even more out of whack.
Yet Republicans seem determined to shield the wealthiest Americans from making even the slightest additional sacrifice to help address the nation's deficit. They scoff at the mere mention of the word "fairness." The current impasse over student loans reflects the GOP's intransigence on this subject: With student loan rates set to double this summer, Senate Republicans are steadfastly opposed to a Democratic proposal to cap them because it would be paid with higher payroll taxes on the wealthy and on some privately owned corporations.
Republicans prefer to support budget cuts alone as a means to bringing the federal budget into balance. Yet that approach inevitably falls most heavily on the poor and working class, with less going to education, health care, public transportation, housing, and so on. This is not only insufficient for addressing the deficit — a point made most clearly by the bipartisan commission on fiscal responsibility and reform two years ago — but a recipe for social upheaval and class warfare.
Mitt Romney has frequently suggested that the U.S. is headed toward becoming another Greece under its current Europe-loving president. But at least the Europeans have expected sacrifice from all (and expect even more from the rich in the future, it appears). Under Republican rule, the U.S. seems destined to go straight to an anti-austerity uproar.
What America needs is a balanced approach to promote growth and opportunity and not just one focused on either spending cuts or higher taxes alone. President Obama has at least shown some willingness to move in this direction (although his efforts in entitlements have been underwhelming); the GOP seems to be stuck in a more rigid, doctrinaire view.
The problem with the current political gridlock in Washington is that unless the two sides compromise, U.S. economic policy may prove rudderless no matter who occupies the White House in 2013. Already, there is talk of an impending "taxmaggedon" with the expiration of the Bush tax cuts, the end of the payroll tax cut and other benefits expiring next year, but little hope the two parties can do much to prevent (or even soften) the blow between now and then.