Thursday, July 09, 2015

Greece shows the way


It's hard to avoid a tingle of schadenfreude, watching Greeks line up for their daily ration of €60 in front of ATMs emblazoned with Oxi, meaning No we won't change the country's economic model of spend, subsidize, and borrow the balance from Germany. As Margaret Thatcher once pointed out, the problem with that model is that eventually, inevitably, one runs out of other people's money.

But the schadenfreude is misplaced, given how far the United States has traveled down that same path. Greece for years balanced its books with loans from Germany; we for years have balanced ours with loans from China. Detroit is bankrupt, and Chicago is nearly so, with the rest of our cities and towns coming along behind. As for the nation, America's national debt will have just about doubled during the Obama administration, and now we have Bernie Sanders effectively promising to be Obama on steroids. Since we print our own money, we can play this game for longer than Greece has done. But we can't play it forever.

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