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America-as-Europe Argument Might Resonate

Until about a month ago, if you put a gun to my head and made me predict this years election outcome, Id have said, Shoot.

Now, I say Romney.

Its not mainly because of lagging job growth, tightening polls, GOP super PAC money advantages or President Barack Obamas the private economy is doing fine gaffe.

And it certainly is not because Mitt Romney has become a more likable candidate or has a compelling vision for the countrys future.

Its Europe. The Eurozones daily flirtation with economic collapse cannot continue much longer.

And when the collapse comes whether its because countries abandon the euro, theres an unstoppable run on banks or nations default on their debts its going to trigger a global recession (or worse) that will cascade into the United States.

Though Obama wont be responsible for the decline of growth and the spike in unemployment, hell be blamed politically.

It seems unfair, but there will be some rough justice if Obama loses this way.

The key factors causing Europes crisis huge public debts, unaffordable social welfare benefits, over-leveraged banks also plague the United States, albeit in lesser measure.

And Obama has done little to lead this country away from Europes model.

To the contrary, he is on his way to doubling the national debt. He refuses to reform Medicare, Medicaid or Social Security and sought to add a huge new benefit with the 2010 health care law.

The Dodd-Frank financial services reform passed with his blessing is horrendously complicated but does not solve the basic problem of banks growing too big to fail, taking excessive risks and expecting taxpayers to bail them out.

Europes crisis is unfolding because Germany the continents one efficient, productive large economy does not want to endlessly prop up Greece, Italy and other countries where people do not pay taxes, where governments lie about their indebtedness and citizens expect cradle-to-grave public support.

In a similar vein, Obama says he wants to keep teachers, policemen and firemen working in cash-strapped cities and states a worthy enough aim.

But the reality is that much of the money hed dispense would go to entities (such as California and Illinois) that have refused to reform public employee benefit plans that represent Europe-like sinkholes.

Liberal commentators, including Princeton economist Paul Krugman of the New York Times, contend that what Europe and the U.S. need is not more austerity but more public spending and monetary easing to induce growth.

That would make sense if the spending and easing actually led to sustained growth. But the record under Obama and Ben Bernankes Federal Reserve suggests that both fiscal stimulus efforts and money-printing produce only sugar highs that dont last.

It might make sense for Germany to launch a Marshall Plan to save Europe if the other European countries would reform to become more like Germany.

But France, for one, elected a new Socialist government that lowered its retirement age instead of raising it. Greece wants to loosen the terms of its bailout package without instituting wholesale financial reforms.

Similarly, it would make sense to help cities and states keep teachers and police working if they all instituted Wisconsin- or Indiana-like reforms.

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