Whither Europe?

Robert Samuelson has a great article in the WashPost today on “The European Predicament” which is that burdensome taxes and regulations are suffocating industry. As a result, the European governments cannot meet the commitments of the welfare state:

In the past year, American-European relations have fixated on Iraq. Europe's loathing of the war distracted attention from its own failures. Its economic model could once be defended as a justifiable political choice. People could select their flavor of prosperity. America's flavor -- more competition and insecurity -- wasn't for everyone. Europe could pick less anxiety and more vacations. It could sacrifice some economic growth for a bigger welfare state (more jobless benefits, universal health care). This argument no longer works.

Why not? Well, the economy is so enfeebled by high taxes and restrictive regulations that it can't pay for all the benefits.

There’s a lesson for America here also: “The predicament faced by Europeans -- one shared to some degree by all advanced nations, including the United States -- is this: Unless they take modestly unpopular steps today, they will be faced with hugely unpopular consequences tomorrow.” IMO, repealing the $400B $530B prescription drug benefit would be a good place to start.