Democracy: Can It Cope?

For those who have read about or
vaguely remember the

stolid British tribe of

Dunkirk, the Battle of Britain and the Blitz, which
held out in its

"finest hour,"
last week brought a disgusting sight.

Mobs in Parliament Square set fire
to the statue of 19th century statesman Lord Palmerston
and

urinated on the statue of Winston Churchill. Charlie
Gilmour, son of Pink Floyd guitarist David Gilmour, was

swinging by a rope from the

Cenotaph that memorializes the 700,000 British dead
of the
Great War.

At night, hundreds of these
anarchists peeled off to appear on Regent Street as the
Rolls-Royce carrying the Prince of Wales and the Duchess
of Cornwall, Camilla Parker-Bowles, entered. The Rolls
was pounded with boots, bottles, sticks, fists and
paintballs, as the mob howled

"Tory scum!"
and "Off with
their heads!"

A sign was pushed through an open
window into Camilla`s side. So precarious was the
situation, Charles` security detail was close to drawing
guns to protect the first in line to the throne.

What was the mob protesting?
Tuition increases for students who pay less for college
than the parents of American students. In Parliament,
the ruling coalition`s 83-vote margin, after defections,
was cut by three-fourths on the vote to raise the
tuition fees.

And Europe

is only at the beginning of this age of austerity.

Across the

Irish Sea, the 50,000 protesters have departed from
the

General Post Office where the Rising of 1916 took
place. But the government`s budget to meet the demands
of the European Union for a bailout of Ireland passed in
the Dail by just five votes, 82-77.

This is
"the budget of a
puppet government … doing what they have been told to
do by the IMF, the EU Commission and the European
Central Bank," said

Michael Noonan, the probable finance minister in a
new government after coming elections.

Noonan said Dublin`s letters to the
IMF and European Central Bank read as though the
government had been
"waterboarded" into signing them.

Irish rage at having to suffer to
save Europe`s bondholders of Irish banks, the anarchy in
England, riots in France to protest a rise in the
retirement age to 62, the violence that wracked Greece,
the precarious condition of Portugal and Spain, the
anger of Germans at having to bail out their profligate
EU partners—raise the question:

Can Europe`s welfare states be
downsized without violence surging, governments falling
and populists coming to power who will default on debts
rather than force the masses that elected them to suffer
to save the bank investors?

Can European democracy deal with
the gathering storm?

Is not a national default and a
collapse of banks across Europe inevitable? And could
such a collapse be contained in Europe when America`s
big banks are all transnational institutions?

And America is not without her own
crises.

This weekend, the
New York Times

reported on

affluent Nassau County on

Long Island:
"Now, with its bonds suddenly downgraded and a state
oversight agency preparing to seize its checkbook and
credit cards, Nassau is on the verge of a full-fledged
fiscal crisis."

California, Illinois, New Jersey
and New York are facing historic deficits, as the
stimulus money that enabled them to survive 2009 and
2010 runs out.

Illinois is facing a shortfall of
$15 billion, a third of the state budget. California is
being compared to Spain. A default by either could do to
the credit rating of states what a default by Italy or
Spain would do to the European Monetary Union.

Now the U.S. government is moving
again in a direction opposite of where the people voted
to go on Nov. 2.

The deficit is not shrinking, but
growing. Even before the Barack Obama tax
compromise—price tag $857 billion—the 2011 deficit is
surging.

In November alone, the U.S.
government spent $150.4 billion more than it took in.
For the first two months of FY 2011, which began Oct. 1,
the feds spent $585.7 billion and took in $294.9
billion, a deficit for just one-sixth of the fiscal year
of $290.8 billion.

Spending is approaching 200 percent
of revenue.

Obama`s deficit for the first
quarter of 2011 alone will be the same size as the
largest annual deficit George W. Bush ever ran. Michael
Feroli of JPMorgan Chase

projects the 2011 deficit at $1.5 trillion, after
$1.4 trillion in 2009 and $1.3 trillion in 2010.

And the bond markets are flashing
warning signals.

After Obama`s tax deal was
announced, U.S. government bond prices tanked. Some
folks are getting out to get into stocks. Others think
U.S. bonds just became a riskier investment.

U.S. cities and states and the U.S.
government, as well as the governments of Europe, are
facing a crisis of confidence. Can their elected
politicians reassure investors who bought their bonds in
good faith that those bonds are still worth what they
cost?

Or should bondholders bail out
before they are burned?

We may be entering a crisis of
democratic capitalism.

COPYRIGHT

CREATORS SYNDICATE, INC.

Patrick J. Buchanan
needs

no introduction to
VDARE.COM readers; his book State
of Emergency: The Third World Invasion and
Conquest of America, can
be ordered from Amazon.com. His latest book
is Churchill,
Hitler, and "The Unnecessary War": How
Britain Lost Its Empire and the West Lost
the World,
reviewed

here by

Paul Craig Roberts.