BRUSSELS JOURNAL looks at Europe’s economic problems:

The reality of Europe’s ailing economy contrasts sharply with its economic potential and with the massive resources employed to cure its ailing growth. The whole arsenal of Keynesian remedies has now been tried and has failed one by one. Massive deficit spending throughout the eighties and nineties has left Europe with a public debt unequalled in history. The size of Europe’s monumental public debt is only surpassed by the hidden liabilities accumulated in Europe’s shortsighted pay-as-you-go public pension schemes. . . .

Europe’s well-intentioned model is not working because it does not pay to work after the taxman has taken his share. Europe is not innovating because it does not pay to innovate after the huge costs of complying with all the prescriptions, limitations and restrictions in all Europe’s overabundant licences and autorisations. Demoralization is the real cause of Europe’s stagnation. Europe’s workforce is tired of being incessantly hindered in its task of producing wealth. Demoralization is the reasen why ever more engineers, scientists and entrepreneurs flee Europe’s tax misery. Paradoxically, the Old Europe of the West must now learn from the New Europe of the East, where after years of disastrous socialism, low and simple flat taxes are being introduced, luring investors from all over the world.

Read the whole thing, and also read this prophetic email from the early days of InstaPundit.

UPDATE: More on Europe’s problems in this article. (PDF). I very much hope that the Europeans manage to turn things around, as trouble in Europe has a way of becoming trouble worldwide.

ANOTHER UPDATE: Here are more thoughts from Larry Kudlow. “All of this is reminiscent of the British disease of the 1960s and ’70s. Back then, striking labor unions closed down the English economy again and again, and it took until the early 1980s for Margaret Thatcher to put an end to it.”