Peak Government

Is this it? The moment of Peak Government in Europe? Charles Hugh Smith certainly thinks Peak Government has arrived in the USA. Mind you, there's a way to go yet: as Constantin Gurdgiev pointed out recently, austerity is visible everywhere except in Europe's public expenditure statistics (as shown in the chart).

But the dream - or the nightmare - is only beginning. The Economist's Bagehot channels an Argentinian magical realist when he observes that:

Britons and other Europeans need to go through a similarly vertiginous moment. For decades workers, faced with exploding global competition, were compensated by governments with cheap goods, early retirement and welfare on credit: a dream of affluence for life to replace jobs for life. Now the competition is as intense as ever, societies are ageing and their nations are poorer than they thought only a few years ago. The boom years were the dream. Hard work and tighter belts are the new reality.

It's going to be a steep downward slope on the other side of the peak...