The fourth problem is that the public is in denial about reality. What is commonly called “austerity” is more accurately termed “sobriety.” For years, people in the democracies have been voting themselves economic freebies and subsidies—getting high on the drug of government wealth transfers. They became addicted to politicians who promised and voted more and more monetary fixes for their present and future desires. That means that politicians who indulge voters’ fantasies and play along with the delusion that the government is a bottomless cornucopia of goodies will have the electoral advantage over those who are courageous enough to tell people the truth about the hard choices that must be made.
What the voters didn’t reckon on—and what they are still in denial about—is that just as a feel-good drug addiction eventually brings one to the point where additional fixes could prove fatal, so the democratic Santa Claus state has neared the breaking point. Either the binge stops—that is, government spending and promises of future benefits are trimmed back—or the system breaks down. The ineluctable fact is that there simply isn’t enough real wealth in existence to make good on all these government promises. The penalty for not facing up to this painful economic truth will be either a market rejection of sovereign debt or a central bank “quantitative easing to infinity” that debases the currency, either of which will convulse markets horribly.
The biggest problem underscored by the French election is the degenerate state of modern democracy (with apologies to Aristotle and our Founding Fathers, who would consider “degenerate democracy” a redundancy). Democracy today is both childish and cannibalistic. It is childish in the sense that masses of people believe that if they want something, all they need to do is vote for it and they will get it—as if economic reality can be transformed by a mere act of will, and government can conjure desired benefits out of thin air. It is cannibalistic in that so many have fallen into a state of moral depravity and pathetic impotence in which they believe that the only way they can have the comfortable life is for government to take other people’s wealth and give it to them.
Many people believe that government is the answer to their problems. They are about to learn the painful lesson that government isn’t the answer. I doubt many of them will recognize that their pain will be self-inflicted. As H.L. Mencken once put it, “Democracy is the theory that the common people know what they want and deserve to get it good and hard.” The French, the Greeks, and a lot of other people living in democracies are about to get a jolt of economic reality and sobriety “good and hard.”
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