Sequestration in the U.S. and bailouts in Europe—the U.S. wants to save money, and the European Union is forced to spend. 

There is nothing wrong with saving money, but it needs to be done in the right areas. President Barack Obama’s administration imposed an $85 billion spending decrease, cut 50/50 from military and domestic programs. I agree with a spending cut in the military because I see that an increase in military power could be threatening to volatile countries. Military powers or terrorist countries, such as North Korea or several countries in the Middle East, might get excited to see the U.S. as an aggressor and want to attack. 

Domestic cuts to the salaries of public employees, such as police officers, teachers or public service workers can be socially dangerous because those who are concerned about the cuts may protest and bring unrest within the U.S.

Domestic cuts also include cuts in social programs such as food stamps and Medicaid. If a person is dependent on Medicaid, going without or with less aid can be life threatening. Additional cuts in children’s health insurance could be political suicide, since children are the most innocent members of our society. 

Initially, President Obama wanted to have a mix of automatic tax increases and domestic cuts. However, Republicans did not agree with this mix, and the compromise Republicans accepted included military cuts, which they traditionally oppose. 

Nevertheless, no real agreement is in sight, as can be concluded from the sequestration deadline. Budget negotiations are currently taking place but there is little agreement on what will be changed. In case there is no agreement, the negotiations will be postponed until September. 

Comparing the American fiscal situation to Europe’s, the fact that both Western powers do not have any control over their money is clear. 

European countries,such as Greece, Spain, Portugal and, surprisingly, Cyprus live on their financial assets. Their livelihood depends on the European Union and strong countries such as Germany and France. 

There, the negotiations are about staying in the Euro zone or getting kicked out. The Southern countries’ economies obviously cannot deal with a strong currency such as the Euro, and goods have become too expensive. This has led to citizens, companies and banks incurring debts and payment deficits. 

Germany has told the suffering countries to cut their spending and lead a policy of austerity. As a consequence, German Chancellor Angela Merkel has been described as cold and compared to Hitler. 

If the European Central Bank, helped in part by the International Monetary Fund, bails out the Southern countries they need to consider that they cannot take billions of Euros for granted. Instead, there must be certain regulations or guidelines they have to follow in the end. Cyprus was bailed out Tuesday, and the negotiations were long but successful in the end. 

It will be interesting to observe what happens next with the fiscal policies of the Americans and the Europeans. Hopefully, there will be an upward trend instead of a downward trend in sight.