How To Tell We Are In big Trouble

France, Germany, and Italy are warning other Western governments not to follow in US Democrats' economic footsteps. They are urging other countries NOT to run up huge debts in an effort to “stimulate” the Western economy.

When France, Germany, and Italy are to the right of the United States … something is wrong.

According to the Financial Times:

Disagreements between the European Union and the US over how to combat the global recession widened on Tuesday as EU governments made clear they had little appetite for piling up more debt to fight the collapse in output and jobs.

Finance ministers from the 27-nation bloc insisted in Brussels that it was doing enough to support world demand and did not need at present to adopt another fiscal stimulus plan, as Washington is urging.

The US-European differences are casting a shadow over next month’s summit in London of leaders from the G20 group of advanced and emerging economies, an event to be attended by Barack Obama on his first visit to Europe as US president.

Meanwhile, Nancy Pelosi is urging the US Congress to “keep the door open” to yet more government debt, more deficit spending, and another bailout. This idea so unsound and far fetched that not even the French are buying it:

The critical condition of Europe’s economy was underlined by official data on Tuesday showing French industrial output fell at a year-on-year rate of 13.8 per cent in January, the worst fall since records started in 1991. Despite the gloomy figures, stock markets around the world rebounded strongly. In New York, the S&P 500 index surged 6 per cent by mid-afternoon, while the FTSE Eurofirst 300 index of leading European shares gained 5.3 per cent.

France, Germany and Italy, the eurozone’s three biggest countries, are anxious that the 16 countries sharing the euro should not run up ever-bigger budget deficits and public debt, potentially threatening the stability of the single currency area.

When the Democrats start making the French, Germans, and Italians, look like fiscal conservatives and miserly libertarians it is time to be afraid. Be very afraid.