Our own Greek tragedy

Many state and local governments, including California's, have become civic GMs---large retirement communities that provide, in this particular case, government services on the side. Bottom line: bankruptcy.

San Francisco is a case study. Pete Peterson of City Journal cites a report from 2009 by the San Francisco Civil Grand Jury:

"San Francisco's responsibilities for current retirees' health care and pensions . . . were 'like having a secondary police and fire departments---one active member and one retired member.' And the current pension crisis pales compared with what the future holds as Baby Boomers retire---a demographic challenge to all public-sector institutions. In San Francisco's case, half of the city's workforce will be eligible for retirement in the next five years."

Frisco is currently running a $500 million budget deficit. In his article, Peterson tells you how they got into this mess. It's a common story.

Theodore Dalrymple of City Journal reports that the story is common to all Western nations, and that it is a Greek tragedy of the sort currently being staged in, of all places, Greece. The ancient birthplace of democracy is coughing up blood from the democratic disease that lets governments get away with bribing the people with their own money, or in its current form, not even their grandchildren's money but money that no one can ever afford to pay.

Like many other European nations, Greece has a large welfare state. Softened by this, Greek citizens expect ever-increasing prosperity conjoined with ever-lighter efforts on their part to generate that prosperity. But neither the physics nor the math of that dream makes any sense. As a consequence, Greece's national debt is now considerably larger than the total value of goods and services they produce in a year (gross domestic product, or GDP).

The Wall Street Journal reports, "According to IMF estimates, Greece's debt load will grow from 133% of GDP this year to 149% in 2013." Britain's debt, by comparison, is approaching 100 percent. City Journal's Dalrymple points the finger of warning: "Greece's overall debt is higher, no doubt, and its deficit larger, than those of other countries, but the difference is one of degree, not of kind. Like most of the rest of us, the Greeks have been living beyond their means."

And what do we see when we look in our own mirror? The words "living beyond their means" bring to mind recent bailouts, buyouts, medical entitlement giveaways, and several other big government burdens the Democrats in Congress are trying to push through before they potentially lose their House majority in November. American public debt was 70 percent of GDP in 2008. This year it is 87 percent. In just a couple of years it will hit 100 percent. The collapse we are seeing in Greece is not just the crazy politics of far away people. It is that. But, under this government, our politics are quickly conforming to theirs, and their fate will soon be ours unless we look in the mirror and change what we see.