It’s been said that ancient Greece was the birthplace of
democracy. Modern Greece, however, is a symptom of an unhealthy economic
philosophy.
The Greek economy is a wreck and its citizens are rioting.
Three people were killed and a bank was set on fire during violent protests
last week
“What we're seeing
in Greece is the death spiral of the welfare state,” wrote columnist Robert J.
Samuelson for The Washington Post on May 10.
While some have
argued that the move to the euro is what led to the economic collapse in
Greece, Mr. Samuelson disagrees.
“Budget deficits and
debt are the real problems; they stem from all the welfare benefits
(unemployment insurance, old-age assistance, health insurance) provided by
modern governments,” Samuelson wrote.
The economic
collapse is not Greece’s problem alone, he added, saying all advanced nations,
including the United States, face the same fate.
Adding to the burden
is that some governments, the U.S. in particular, spend billions and trillions
on failed criminal policies—such as prohibition—and on military intervention
around the globe. It’s become a welfare-warfare state that, under the Bush
administration, increased an already overloaded debt through massive borrowing.
The Obama administration has not brought the debt or deficit under control.
The fiscal insanity
has to stop somewhere before a central bank (the Federal Reserve, here) turns
on the printing presses, inflates the currency and destroys that currency’s
buying power.
Governments have
three basic options. They can raise taxes, increase borrowing or cut back on
spending. Borrowing is a fool’s errand since those loans will eventually have
to be repaid through taxation, so borrowing and taxing become a never-ending
spiral of decline.
What a sane
government will do is cut back on spending with cuts across the board. Yet,
cutbacks alone will be painful, even harmful for some who have grown dependent
on a government dole. To help offset that problem, that same sane government
will eliminate laws and regulations that restrict and stifle the
entrepreneurial spirit of its people, laws that interfere with citizens
engaging in voluntary free enterprise.
Governments don’t
produce wealth, people do. They do that by creating productive jobs, by
offering consumer goods that people want to buy and can afford because they
have productive jobs.
Putting an end to
the welfare and warfare state philosophies will restore economic health to both
nations and individuals.
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