Quote of the Day:

Guess, what? Everything President Obama, Hillary Clinton, and Bernie Sanders wants is right next door, in lovely Puerto Rico. Income inequality eliminated! Rampant Socialism! More time for recreational pursuits outside or work! And guess what? The place is broke.

–Keith Koffler, White House Dossier


Greece has rejected austerity and one wonders where they will now find the money for their panoply of benefits and–more immediately–to eat. But if you've been living on borrowed money that you can't repay for years, such mundane thoughts might not have occurred.

Stephen Moore notes:

Greece is formally in default on its loans and in the weeks ahead as more IMF and EU loans come due, Greece is about to slide into fiscal oblivion.  This is the natural and unavoidable consequence of socialism everywhere it has been tried.

While Greece is in a heap of trouble, the country could emerge from its crisis in better shape, if painful steps are taken. Moore proposes what he calls the Detroit Option: let Greece go bankrupt and then go into receivership with new authorities deciding who must take a cut (pensioners, welfare recipients, bond holders) in order to restore Greece to financial health. It is a painful solution for the Greeks and for people who invest in stocks and fear the Greek fall will cause the market to tumble.

Moore, however, is sticking by this position:

But every option is worse.  For six years the brainiacs at the International Monetary Fund and the European Union have devised one bailout and debt restructuring scheme after another.  None of them have worked.  They have only saddled the Greek citizens with even more long term debt that can’t be paid back.  Greece is now sitting on $350 billion of debt.  Its unpayable and the international monetary experts are deluding themselves into believing that by some magic stroke, this nation of 11 million citizens will some time in the future come up with the funds to repay it.

Greece is already overtaxed, and adding more taxing the few businesses that are still functioning is only going to ensure their eventual demise too.  Meanwhile the Greek citizens have come to the conclusion that fat pensions and cradle to grave welfare benefits are a human right that can never be taken away. That is what they declared in the referendum.  But those benefits are going to be taken away. Socialism has radically reduced the standard of living of the citizens. 

Closer to home, we have Puerto Rico, the "progressive paradise," which also has unpayable debts. Puerto Rico racked up its unpabable debte in spite of (or perhaps partly because of) favorable rates created for the territory by Congress.  Puerto Rico is a "bloated welfare state" with disability rolls for working aged people twice as high as in the fifty states. It also has a high minimum wage. (Here and here.)

These two developments should make Congress determined to curtail public spending and get our own budget in order . Sadly, these painful situations haven't even yet inspired Greece and Puerto Rico to see the wisdom of mending their ways.