Time For Atlas To Shrug It Off

About five minutes after somebody first suggested the idea of systematic governmental welfare programs, detractors started hypothesizing about the catastrophic end-game of such programs in any real republican system. If the electorate is given entitlements beyond the specifically enumerated benefits of "life, liberty, and pursuit of happiness," where do such entitlements end? What's to stop voters from granting themselves (either directly, or through proxy granted to elected officials) ever larger benefits, the cost of which must be bourne by the taxpaying public? Why bother to work for a living, when you can simply vote for a system which requires others (who do work) to provide you with whatever you need?

Of course, the response of the Left to such a suggestion has been to scoff. Come on, dude. Get real. Look how much wealth there is in our society. We just need a small portion of that to guarantee a stable life for everyone. We're not talking about providing a free ride to everyone; we're just going to help out those who really need a little bit of help. A society where those on welfare can literally out-vote and out-spend the remaining public? No way. Never going to happen.

Well, it's happened.

Our good friends over in Greece are in the process of finding themselves a new government. The process has been underway for quite a while, and shows no clear signs of resolving. What's happened is that over the last fifty years or so, Greece has trended socialistic to the point that a substantial portion of their economy is funded by taxes, most notably the pension plans for large blocs of voters. You know: the money that people depend on for food, shelter, and so forth. Over time, the voters (again, either directly or through proxy) have awarded themselves a whole lot of relatively cushy lifestyles, the costs of which must necessarily be satisfied by whatever portion of the country can be gotten to pay taxes. This was not a problem when economic times were booming, especially the way things boomed in the 80s and 90s. Plenty of money to fund those programs (and buy those votes), and while such spending would not be sustainable into perpetuity, by then somebody else would be in office. Let them find a solution. So long as they don't touch the pension programs for retired political officers (and they won't; they're relying on that too), who gives a damn.

Then we broke our global credit system.

At this point, there's no longer enough money in the Greek tax system to pay for all of the things that the Greek government has promised to its voters. It's not close. Actually, it hasn't been close for quite a while. Greece got by for longer than anyone suspected by cooking the books, incurring debt, and deficit spending, but they appear to have drained that well. Those fucking tightwads in Berlin are refusing to put in one little extra hour of work every day for the rest of their lives to fund pensions for early retirement of Greek citizens.  They're refusing to shell out for police, fire, and politician salaries in Athens. At this current juncutre, the Greek government has to find ways to deal with all of the obligations it's taken on to its people, and also find a way to deal with all of the billions that it already owes to others; debt incurred in sustaining benefits for as long as it did. Of course, the politicians who are making these efforts expect to be well paid as well, both during their terms in office, and into perpetuity after their terms end.

Some efforts have already been made, which might actually work, given a decade or so. Underfunded, unable to pay for basic civil services (much less the comforts promised to its people), and no longer able to get anyone else to agree to pay for those things, Greece agreed to a stark set of economic adjustments, in an attempt to get its national economics out of the red. In return for adopting such austerity measures, the rest of Europe (mostly Germany) agreed to chip in to keep the Greek economy afloat during the time it took to get healthy. It was a shitty solution for everyone, but it kelp Greece solvent, and kept Greece - a member of the euro-zone - from totally fucking over the currency market of the whole continent. It might even have worked, at least well enough to keep us all chugging along until the threat of economic chaos across a dozen nations could be defused.

Alas, it doesn't look like it's going to work out that way, since this ended up being an election year in and around Athens. The voters - handed the dirty end of the austerity stick - are pulling their support from politicians who brokered the austerity deals. An ever-increasing mob is rallying behind political parties which overtly support the recanting of those agreements. (As above, those agreements are the only reason the rest of Europe is eating a loss to keep Greece afloat.)  All Greek political parties are pluralities, and none of them seem able to forge a coalition sufficient to take charge under the Greek republican model. The country is seeing unemployment at about 20%, suicides are up 40% this year, high taxes and tougher times are projected. Oh, and the public suffering from all this will go to the polls on June 17 to take another run at electing a government.

Into the current social climate, throw two opposing political parties. One group of politicians - the ones in support of austerity - more or less sell the position that "yeah, we need everyone to take several big bites of this shit sandwich, so we can keep our current government and economic system." The other group of politicians are saying "Fuck austerity. Fuck the politicians. Fuck our national debt. Fuck the rest of Europe. Vote for us, and we'll abandon this austerity thing and get things back to the way they were." Whether or not either party is capable of coming through on their promises matters even less there than it does here in the U.S. Care to wager on who's going to ultimately prevail in Greek politics?

My money (ha ha) says that the Greek voters elect leaders who will scrap the austerity deals. This will ultimately result in all loans to and from Greece being devalued. Down to zero. Nobody in any financial market will give any credit to an instrument backed by a guarantee of payment from Greece, and all outstanding obligations to Greece will be "money down a rathole" investments, and - where possible - cancelled. Lots has been said about how this will effect global economic markets. Suffice to say that it will not be fun. Governments and banks around the world will replace the "Value owed by Greece" figure with a big ZERO. Books will no longer balance, and there will be much chaos and gnashing of teeth. Not a whole lot to do to stave this off, or to prepare. But since it's the credit system that's at risk, might be a good idea to have a wad of cash on hand. (Dollars. Not Euros.)

Inside Greece, the abandonment of austerity deals will mean the death of most pension and entitlement programs (which have no funding absent the deals), but those programs aren't working so well anyway. At this point, its not like the voters have a whole lot more to lose.

Personally, I don't see any way out of this except for a Greek national revolution, either overt or implied, with a critical and necessary step for recovery being acknowledgement of bankruptcy, and abandonment of some or all prior financial obligations. The Greek government cannot sustain its debts, and cannot meet its obligations. The Greek government has nobody left to fuck over except the Greek citizenry, who are clearly not on board with that game governmental game plan of austerity measures and reneging on prior promises. The Greek people are not going to take that, just so they can keep their current government. All in all: time for a new Greek government. Barring the appearance of some politician  who will get everyone on the same page and sell austerity by sheer force of charisma (Satan?), the Greek political/economic system is either going to fall apart completely, or be controlled by a leadership that tears it apart intentionally.

So yeah. Turns out that some of those political theorists were right. Given opportunity to vote themselves more benefit and entitlement than their economy can sustain, people will vote themselves more benefit and entitlement than their economy can sustain.