Are Europe and America headed to where Athens is today?
To answer the question, consider what brought Greece to where she is -- running a deficit of 14 percent of gross domestic product with a debt approaching 100 percent, with Portugal, Spain, Ireland and Great Britain not that far behind.
How did this happen?
Protected by the United States through a half-century of Cold War, Europe cut back on defense and ratcheted up spending for La Dolce Vita.
All of Europe adopted universal health care. All voted in a shorter workweek, a higher minimum wage, greater job security, earlier retirements and munificent pensions.
As the cradle-to-grave welfare states rose, an ever-increasing share of the labor force left the private sector for the security of the public sector.
Tax-consumers, the beneficiaries of the welfare states and the bureaucrats that ran them, grew in number, as taxpayers declined as a share of the labor force. Though Greece was far from the most productive nation in Europe, Athens led the parade.
After the baby boom ended, the pill arrival in the 1960s. Then came abortion on demand in the 1970s.
The fertility rate of Greece and every European nation fell below the 2.1 births per woman needed to replace an existing population. Greece's birth rate has been below zero population growth for three decades.
Result: In Year 2000, Greece had just under 11 million people and a median age of 38. In 2050, Greece is projected to have just under 11 million people, but the median age will be 50.
Were Greece a company, the solution would be bankruptcy.
But Greece is a country. And a bailout of $141 billion is being put together by the European Union and International Monetary Fund.
Why? Because, should Greece decide not to take a chain saw to her welfare state, but walk away from her debts and default, she would blow a hole in the balance sheets of the biggest banks in Europe.
Then the banks would have to be bailed out.
Seeing Greece's bondholders being burned, terrified holders of Portuguese and Spanish debt would start dumping their bonds, forcing Madrid and Lisbon to pay a higher interest rate both to sell new bonds and roll over the old ones coming due. Rather than savage their welfare state programs, and risk riots in the streets and a massacre at the polls, Madrid and Lisbon, too, might look agreeably at default.
Chancellor Angela Merkel, though exasperated with the Greeks, is urging Germans to back the $141 billion bailout: "Nothing less than the future of Europe ... is at stake."
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