Greek tragedy

The state of the global economy and its effect on individual standards of living is a well-trod topic of conversation. But what about the state of government and how it affects not only living standards but the character of a nation?

The crisis in Greece—where unemployment tops 27 percent and public debt is 175 percent of the country’s GDP—for years has roiled the nation. But with the January election of a government headed by socialist Alexis Tsipras—who vows to turn the country back to welfare programs, nationalized industries, and bigger debt—we’ve watched its sorry state upend financial markets and the EU itself.

Not surprisingly, Tsipras won election by rewriting history and changing the vocabulary. His “anti-austerity” campaign blamed Germany for his country’s crisis. Never mind that German Chancellor Angela Merkel twice in the last four years agreed to a eurozone bailout for Greece. Or that Greece for a decade hid massive deficits using financial instruments (similar to subprime mortgages then in vogue in the United States) to mask billions in loans.

If a showdown in coming weeks forces Greece to abandon the euro, be assured that Merkel and others will be blamed for holding Greece to its obligations, the same ones Greece agreed to in 2012 in exchange for debt forgiveness and restructuring. When nations can’t bring government spending under control, it’s not simply a crisis, it’s character-forming for everyone. Deficit spending begets lies and double-dealing, corruption, and ultimately default.

When nations can’t bring government spending under control it’s not simply a crisis, it’s character-forming for everyone.

The unfolding cautionary tale is a real Greek tragedy. It, plus two recent reports, suggests now is the time for Americans to flee our own country’s growing dependence on government entitlements. Such “anti-poverty” benefits are a staggering growth industry that’s changing the character of our nation and its standing in the world.

Set aside for a moment Social Security and Medicare, and consider only “means-tested benefits,” what used to be called welfare checks: Today those payments are received by over a third of the U.S. population, 109 million Americans. From 1983 until 2012, the population receiving those benefits more than doubled—an “astonishing trajectory,” reports political economist Nicholas Eberstadt: For every 100-person increase in national population over that time period, 80 persons were added to the welfare rolls.

At that rate, in the next year or so more than half of all Americans may be on some form of needs-based assistance—a shocking level of dependency from the not-so-distant past when homesteaders and wage-earning immigrants working long days helped build the U.S. economy.

In a forthcoming book, The State of the American Mind, Eberstadt makes clear that not only does the trend to government dependency reach the taxpayers’ wallets, it reshapes our hearts and minds:

Because America had no feudal past and no lingering aristocracy, poverty was not viewed as the result of an unalterable accident of birth but instead as a temporary challenge that could be overcome with determination and character—with enterprise, hard work, and grit. Rightly or wrongly, Americans viewed themselves as masters of their own fate, intensely proud because they were self-reliant.

Self-reliance, personal initiative, and generosity—the key traits to rising from poverty and building this country’s economy in the past—will be replaced by the “essentially unconditional and indefinite guarantees of means-tested public largesse,” writes Eberstadt. In essence, by gaming the system.

It may not be surprising, then, to learn that in a leading index of global economies, the 2015 Index of Economic Freedom, the United States fails to rank in the Top 10 of the world’s most free economies. In 2006 it ranked 9th, but for several years now has held at 12th place (Greece ranks 130th). Hong Kong, Singapore, Denmark, Mauritius, even Ireland do better on the Index’s set data score. While the United States ranks high for property rights, flexible labor markets, and low tariffs, it gets downgraded over the size of government, rate of regulations, and a slowdown in competitiveness and job creation attributed to the Affordable Care Act.

The United States is no Greece. But the lessons are unmistakable. Dependency begets more dependency, and a nation may never be the same.

Email mbelz@wng.org