Where do they get it? The money they spend comes from you, the tax-payer, from the productive private sector of the economy. see: http://www.lifestrategies.net/money

So although many governments talk about austerity it doesn’t actually mean they tighten their belts. It’s unfortunately just spin, yet more forked-tongue pretense.

But I’m mostly amused at the “socialism for me but not for thee” of Germans. Solidarity from productive to indolent German is almost unassailable, yet solidarity from Northern to Southern European encounters majoritarian resistance.
What accounts for that? In a nutshell, the hypocritical fact that Greeks don’t vote in Germany. At least not quite yet, because with politicians promoting further European integration/harmonization/homogenization, Greeks will acquire ever more direct (european parliament) and indirect (various commissions) voting rights to German wallets. Exceptional Germans will be burdened to support not only those who made mediocre lifetime choices inside Germany, but also distant Greeks, Spaniards, Italians etc.. With Germans already suppressed on a quite sub-par overall economic trendline of one to two percent annual growth, in a world that is growing by five percent on average, lets see how long Germans last. My prediction is that the enslaving cultures of mandatory collectivism will eventually get into a big fight. But not quite yet. First there will be more integration. Like a dying star, it must first redouble on its gravity and collapse on its central core before it finally explodes.

So what does the Euro-crystal ball tell us about the US which has essentially entered the grips of the same inescapable vicious cycle, but is somewhat behind? What awaits? Well…Federal solidarity bailouts of economically unsustainable states, especially those who are solidly in the same party as the current federal government, like California. Only temporary transfers of funds, for sure! Until those rising welfare states can get their dynamism back, ie. forever, or… until the US is also submerged by a rising tide of humanity which is fast rising at five percent annual growth, consistent with the pace at which they are moving away from mandatory collectivism. Bye, bye western privileged, once exceptionally prosperous citizen. If you have not already started feeling that way, trust me, that world where all the Average American can muster is average world prosperity, will feel very different. Very-very different!

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Finally the CBO’s mere mention of quote the labor withholding effect spending has on the lower end of the productivity scale is remarkable. I’m always surprised at (but obviously understand) how infrequently anyone ever touches the third rail of insulting the majority: That the spending that is used (foolishly, delusionally and exactly counterproductively) to insulate the majority from the consequences of mediocrity, reduce the amount of labor supplied to the economy and submerge entire societies in the inevitable decline of slow economic growth. Perhaps by as much as, or perhaps even more than high tax rates cause the more productive to withdraw from the rat race. Rat race to supply consumers with products and services at ever higher feature to cost ratios, that is. Redistribution encourages the majority to be more complacent in lifetime choices of mediocrity. All that needs to happen is be a little more encouraged in that direction, compared to other countries, and you are toast folks! You loose your top spot in world prosperity and start the irreversible vicious cycle of sub-par growth decline.

The fact that such arguments get no traction means that the vicious cycle of western decline is unbreakable. Only the few states that manage to escape the gravitational pull of the dying pitchfork democracy stars will survive. Perhaps Switzerland, Singapore, Hong Kong, for now, … and there’s still a good chance that the dying pitchfork democracy aspiring western civilization stars may turn nasty in their declining-dying days, as it often happens during declines.

In summary, the future is clear. There is no way without a deep crisis for government spending to decrease (and even crises are offer spun in ways that increase spending as we have seen in the past). Therefore, higher taxes are coming for everyone in the dying western world. Increased taxes for higher, middle and lower income. The taxes on the rich will be explicit and advertised, to satisfy the majoritarian pitchforks, while those on the middle and lower taxes will be hidden as taxes on their employers, health plans, etc., even VAT which the European experience shows is much easier for the middle and lower classes to digest, compared to payroll taxes, though the effect on their standard of living is virtually identical.