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It won’t come as news to anyone who has been in Spain to know that there are a lot of government services in this country. And not only are they numerous, government services are often located in some of the nicest buildings in the town. For example, we walked into the ayuntamiento (town hall) here in Laredo the other day and I was amazed at how modern and sophisticated it felt.  The big restored building was all decked out with chic lighting and large elevators. It was such a contrast to many of the private stores in town, which often seem dated and often a bit run-down.

This has been the case in both Santander and Bilbao as well, where the bureaucratic buildings are usually in the nicest part of town and often have been newly renovated. At times it seems like the only upper middle-class people are in fact the functionaries of the state. They are the ones wearing suites and going to the expensive bars.

All of this sounds like a situation we have developed in the United States with our government. I just read that while the national unemployment rate remains “officially” at around 9% (way more like 15-20% when measured by old standards), unemployment in the Washington D.C. area is at around 6%. Likewise, there has been considerable press reporting that the wealthiest counties in the country are now those D.C. suburb counties in northern Virginia and Maryland. While so much of America is unemployed or barely making ends meet, the political classes in D.C. are “earning” more than ever.

Spain, and to an even greater extent the United States, have reached the point where they must reassess the role of government. The growth of the respective national debts and the levels of government spending cannot continue at the current pace. I just saw a tour bus last night in Laredo that said on the side “Vacation Program for the Elderly — Spanish Government.”What is a government doing paying for and organizing old folks vacations!? Even more egregious, the U.S. government is putting soldiers on the ground in Libya, Uganda, South Sudan, and Congo. Why are combat troops being used to police disputes in Africa (not to mention Iraq and Afghanistan)!?

If either country is ever going to think about growing their economies again they are going to have to let capital back into the private (market) sector. To do this will require major spending cuts and government reduction… a topic that few in any country want to address.

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