An Unsubsidized Life is Not Worth Living
May 18, 2010 Leave a Comment
This post was written by Edward Mahee. Writing under a pen name, Mr. Mahee is a legal analyst and a political commentator. This is his ninth posting for the site.
In his famous work Apology, Plato quotes his mentor Socrates as saying, “An unexamined life is not worth living.” While I believe the sentiment is properly translated from the Greek of Plato into modern English, I do not believe it was properly translated into modern Greek. The behavior of the people of Greece in the last weeks as its government has finally begun the process of coming to grip
s with its financial trouble, seems to indicate they were raised with the notion that “an unsubsidized life is not worth living.” The Greek citizens’ reaction to government cutbacks (“austerity measures”) required under the terms of its $110 billion bailout is a window into a potentially harrowing future.
First, some background. Greece has been ruled by socialist governments since 1974, when the Third Greek Republic was established. These governments spent freely. The money for this spending came from heavy taxes and prodigious borrowing. It has been suggested that part of the current crisis comes from the Greek habit of not paying taxes, which may be true, but when just 2/3 of workers in a country are in the private sector, there is only so much money a government can hope to raise in taxes.
Let me emphasize that: Just 2/3 of Greek workers are private sector employees. One out of every three workers is employed by a public instrumentality supported by taxation and borrowing. And those public sector employees have a sweet deal. Each public sector employee receives 14 (not 12) monthly payments. For many of them, the work day ends at 2:30 p.m. And, when they retire, their annual defined benefit pensions come in the form of 14 (again, not 12) monthly checks. This, along with guaranteed employment (a Greek public employee cannot be fired) made for a pretty nice life … until now.
In the wake the current global financial crisis, Greece has had to come to grips with its debt problems. As things stand, the Greek national debt of approximately €300 billion ($378 billion) is bigger than the country’s economy of $333 billion. Greece now owes more than its economy can produce, or to put it another way, Greece owes more than it is worth.
In response to this crisis, the Greek government has implemented austerity measures, including slashing government spending, aimed at reducing its annual budget deficit. The Greek government has hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations. Many of these measures were required by Greece’s neighbors, principally Germany, in exchange for a promise to loan much needed cash to Greece in an effort to avoid default. 
The current Greek crisis brings to mind three thoughts. First, the public response to austerity measures is striking for its fantasy quality. It’s almost as though they do not realize, or don’t care that there is no more money to support their government-subsidized cushy life. Margaret Thatcher is famous for having said the problem with socialism is that “you always run out of other peoples’ money.” The Greek people can march all they want, but no matter how many buildings are burned, businesses destroyed, property vandalized or chants recited, nothing can change the fact that the money is gone. The Greeks can rage against reality, but it doesn’t matter any more than if they raged against gravity.
Second, there has been significant talk of a bailout of Greece in order for it to avoid default and the subsequent consequences it would have for the viability of the Euro currency. But while the focus has been on Greece as the recipient, not much thought has been given to the sources of the loaned money. What of the German or American taxpayer who is now on the hook for Greece? Are frugal people who are careful, or at least less profligate with their money, ultimately suckers? Why be the ant, if in the end you’re just going to end up subsidizing the grasshopper?
Third, what is happening in Greece may be a window into the future for the United States should it, like Greece, lose control of its finances. All current projections regarding government expenditures in the United States—federal, state and local—are troubling to say the least. California is already thought to be on the verge of bankruptcy, having been forced to suspend cash payments to its employees last summer.
For now, we should contemplate the sorry state of our own financial house and wonder, “If the United States follows the path of Greece, who will bail us out?” Once we lose complete control of our finances and depend on the largess of others to pay our bills, we will have truly lost our independence. And with independence, our precious individual rights will quickly follow.
-Edward Mahee for TruPolitics.net
liabilities have become so heavy that it faces default—a fate both the Euro-Zone and world economies cannot withstand—so it recently accepted a $110 billion bailout. Its people are now revolting, it will be repaying its debt for decades, and its economy will teeter on the precipice for years. It’s a lesson in socialism. It’s a lesson for America.
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