Business and Politics

A startling idea emerges in Germany. If Greece can not pay its way in the world, it should tighten its belt. Failing that, it should sell some of its belt – its belt of islands, most of which are uninhabited.

“Suggestions like this are not appropriate at this time,” says Greece’s deputy foreign minister Dimitris Droutsas. Does he mean that it is a good idea, but that now is not an appropriate time to advance it? Or that it is a bad idea in itself?

The deep issue here is that the Western public have succumbed to a collectivist con-trick. Namely that countries are different from individuals.

We all know how it works for ourselves. We do our best to organise our lives according to what we can afford. If we do not have enough money to buy something, we either go without or we borrow it from someone who assumes that we will pay it back (and maybe insists on a claim on our property to make sure we do). If we keep on borrowing far beyond our prospects of paying it back, sooner or later we are rumbled and bankruptcy looms. Disgrace. We are likely to end up poorer than when we started.

How the world sneered when Mrs Thatcher talked about ‘honest money’ and the need for countries and individuals alike to live within their means. What a narrow, banal, God helps us suburban housewifely view!

She of course was right.

What has happened is that in recent decades as Baby Boomers have spread through the system governments have gone far beyond spending only what taxpayers are willing to give them. Instead they borrow from what taxpayers will give them in the future when taxpayers are richer. They even borrow from taxpayers not yet born.

The public are dimly uneasy about this, but eyes glaze over as borrowing requirements run into billions and now trillions. How to fathom it all out?

Whatever. Nothing must stand in the way of the latest NHS kit, or MPs’ expenses, or tens of thousands of pounds going to large families living off benefits, or bomb-proof vehicles in Afghanistan, or Climate Change.

Or CAP subsidies to rich French farmers, a programme which uses inefficient transfers of taxpayers money to bloat rich French landowners and so pump up food prices in Europe, thereby creating poverty in Africa, which we then fail to solve through inefficient but expensive aid programmes. The most stupid, immoral state-subsidised policy in human history, give or take Communism.

We deserve all this. And much more. Even if we can not afford it.

No. In fact, we deserve all this because we can’t afford it.

Sooner or later the folks lending this money (the Markets) start to look at the numbers.

And lo! it transpires that maybe, after all, even unborn taxpayers will be unable back to pay this money borrowed by greedy government PIIGS.

In fact, it’s worse than that. The strategic demographics are against them. Nice move to try to dump all those bills on their grandchildren. But those grandchildren are not going to be born…

So the risk of lending money to Greece is higher. So the cost of borrowing goes up. So the wasteful government concerned can not afford to borrow. Eeek.

Look at the magnificent analysis of Greek leftist trade unions:

The measures are grossly unfair … We’re being asked to pay for the crisis. Greek taxpayers are being asked to foot the bill again.

The attempt to fix the fiscal crisis underlines clearly the government’s attempt to move the cost of this attempt to the real economy

How dare the Greek government attempt to attach its spending to reality of all things! And make taxpayers living now pay for what they get, rather than sending the bill to their grandchildren!

Not that it’s much different over here. What if the BBC decided to spring-clean its operations and shut down 6 Music?

Shock. How dare they try to deny us, the public, cutting-edge poll-tax funded pop music which is available to everyone via the Internet anyway? Don’t they care about our feelings?

In short, the implacable Markets are doing what governments disgracefully have shown themselves unwilling to do. Namely face facts, and stop treating public spending like a series of Ponzi schemes, building up towers of unsustainable debt.

Which explains the central importance of the Tea Party tendency in the USA. They alone are the popular force on the planet pressing for Smaller Government, and hinting at a public willingness to take the pain accordingly.

And why the Democrats/Obama are taking a huge risk in pushing ahead with healthcare ‘reforms’, which look set to proliferate bureaucracy and solve some real US government financing problems by making other real long-term US government financing problems far worse.

It all boils down to a profound infantilisation of public life. Government has turned into feckless dim-witted parents who treat their children like spoiled brats. The children themselves duly morph into something neurotic, angry and sly.

To win the public’s loathsome brattish affections and get re-elected, the parents offer endless sweeties, only to be aghast when the brats start to think that this is how things must be – even when there is no more money for sweets, and their own teeth start to rot from all that sugar.

The door-bell rings. It’s the bailiff:

Nice islands you have over there. Pity you can’t afford them any more…

A distinguished tourist is visiting Greece this year, namely Ayn Rand:

We can evade reality, but we cannot evade the consequences of evading reality.

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Charles Crawford, a former British Ambassador turned blogger and policy pundit, looks at how UK policies shape global events – and how global events shape UK policies. For more information or to contact Charles Crawford, click here.

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