With one in four adults unemployed and half of its young people out of work, who is going to pay for the fat pensions and cradle-to-grave welfare benefits that many Greek citizens consider a human right? Furthermore, who in Greece would want to work? According to the Cato Institute’s Alan Reynolds, the cascade of taxes in Greece can reach so high that the rates approach 100 percent.
In what economist Stephen Moore calls a “government-sponsored orgy,” half of Greece’s GDP is spent on government benefits and programs.
Most importantly, Greek bankruptcy will serve as a teachable moment to the scores of overtaxed and over-debt-burdened nations of the world that the jig is up on unaffordable government promises. Investors will also learn that governments that spend and tax their way to financial oblivion are not risk-free. This would also be a good time to shut down the feckless IMF and World Bank. These institutions haven’t averted financial crises. They have enabled them through their lending policies that are the equivalent of giving crack cocaine to drug addicts. That story never ends well. Greece has taught the rest of the world that socialism is dead. The tragedy is so few world leaders are learning that.
Read Moore here on why the left-leaning Greek government is making things worse.