Charles Forelle's article in this morning's Wall Street Journal gives a bleak update on what happens to a country that falls in love with big government schemes to reduce inequality, provide free health care, and guarantee generous old age pensions. The end game is always the same -- a collapsing economy, grinding the average citizen into hopeless poverty.
What happened in Venezuela under Hugo Chavez is instructive. Chavez campaigned for the little guy. After a decade of Chavez' leadership, the once proud Venezuelan economy and its middle class was in shambles. No matter that Sean Penn and Jimmy Carter extolled the virtues of Chavez, the country's economy collapsed and today no on is safe on the streets in Maracaibo. Athens is headed that way.
When people become convinced that they are "entitled" to a high standard of living without working for it, then the end is in sight. Europeans are convinced and, gradually, most Americans have become convinced. When health care, housing, old age income maintenance, schools, etc. all become free, it is then a short road to economic collapse. Europe and the US are headed down that road.
Countries prosper when their citizens feel personally responsible for their own economic outcomes. Once that responsibility is removed, there is no longer a path to prosperity. Greece is learning that lesson the hard way. The rest of Europe, including Germany, will learn that lesson in time.