Being More European---or Maybe More Like Mad Max

            How many times have we heard that we should be more European?  More sophisticated, like they are in Europe?  More mature, like they are in Europe?  That we should take our cues from European intellectuals?  That we should emulate the European Social Democratic welfare states?

            If you’re experience is anything like mine, you’ve been hearing things like that for a long time.  I recall being told since high school that the evolution of the United States from where we were to some form of European Social Democratic Welfare State was “inevitable” and “the wave of the future.”

            The underlying premise of that line of thought ignores fundamental differences in our culture and history and those of Western Europe. 

            First, Europeans see the primary purpose of government as social control.  From the time of the Roman Empire to the present time, governments needed to maintain control over populations made up of ethnic groups other than those of the rulers.  In their view, the government must have the power to protect itself from the excesses and bad behavior of the population.  That’s why, for example, an official equivalent to a desk Sergeant in a police station has the power to approve opening a citizen’s mail or tapping his telephone in many European countries.

            By contrast, most of our ancestors fled Europe in large part because they objected to being treated that way by the government.  Once in the new world, particularly in North America, they sought legal protection against abuses of government power.  In short, our view of our relationship with our government is the opposite of that of most Europeans.  European intellectuals either don’t understand the difference or dismiss it as inconsequential.  How many times have we been told that, “…you Americans are obsessed with individual freedom”?  Our own intellectuals, given their enthrallment with their European counterparts, don’t seem to appreciate the difference either.

            Four years ago, we elected a new President, who promised to “fundamentally transform” the United States into a European-style Social Democratic Welfare State.  He was applauded by intellectuals and would-be intellectuals on both sides of the Atlantic.  He downplayed the problems with our economy and forged ahead with his transformational plans.

            Two years ago an event occurred that upset the welfare state apple cart.  The government of Greece announced that they were unable to pay the interest on the money they had borrowed to finance their country’s welfare state.  The European Union crafted a bailout that consisted lending the Greeks additional money to pay their loan interest.  A year later, the Greeks found themselves again unable to pay their loan interest.  The European Union lent them more money to pay that interest.  This time the European Central Bank and the International Monetary Fund required the Greek government to substantially increase taxes.  The Greek economy shrank, government revenues declined and the unemployment rate rose above 24%.  If that’s not bad enough, bear in mind that in Europe, a person must be the head of a household to be counted in the unemployment rate.  If they used our method, the unemployment would be much higher. 

            As events unfolded in Greece, we learned that Spain and Italy were facing similar problems.  In Spain, economic growth has turned negative and the unemployment rate has risen above 25%!

            More than 35 years ago, Margaret Thatcher observed that the problem with the welfare state is that “…eventually you run out of other peoples’ money.”  Why?  Because it is easier to promise benefits to the voters than to pay for them.  It’s even easier to kick the can down the road and borrow money to make up the shortfall.  The Spanish and Greek governments have found out what it means to run out of other peoples’ money.

            What does that mean for the rest of us?  The Vice-President says that we’re not Greece and we don’t need to worry.  In the end, we’re all Greece!  We all have welfare states that run substantial annual deficits.  We’re all borrowing money to make up the difference. We all suffer from low birth rates and people living longer.  There are fewer people entering the workforce and paying taxes to support the welfare states.  At the same time, there are growing numbers of elderly people who need retirement pensions and require more health care.

            In what alternate reality does it make sense to undertake a massive new social program when we haven’t figured out how to fund Social Security, Medicare and government employee pensions?

            Even the wealthier countries in Europe—France, Germany, the Netherlands and the Scandinavian countries—have the same demographic imbalance as Greece and Spain.  Soon, they, too, will run out of other peoples’ money.

             We are not very far behind them.  What happens when it is our turn?  Who will bail us out?  We will likely find out that there won’t be anyone. 

            What happens then?  The most likely scenario is that the world financial system would grind to a halt.  After that, commerce would shut down, pay and pension checks would stop going out.    Soon, the store shelves would be empty.  It has been said that most of us are nine meals from anarchy.

            We have a choice.  We can get government spending under control while the problem is still manageable.  Or, we can continue to be in denial and wait until we hit the wall—like the Greeks.  With no one able to bail us out, the slide into social chaos would be unstoppable.  Do you really want to live out the scenario of the Mad Max movies?  I don’t!