The End of La Dolce Vita

Are Europe and America headed to
where Athens is today?

To answer the question, consider
what brought Greece to where she is—running a deficit of
14 percent of gross domestic product with a debt
approaching 100 percent, with Portugal,
Spain,

Ireland and Great Britain not that far behind.

How did this happen?

Protected by the United States
through a half-century of Cold War, Europe cut back on
defense and ratcheted up spending for
La
Dolce Vita.

All of Europe adopted

universal health care. All voted in a shorter
workweek, a higher minimum wage, greater job security,
earlier retirements and munificent pensions.

As the cradle-to-grave welfare
states rose, an ever-increasing share of the labor force
left the private sector for the security of the public
sector.

Tax-consumers, the beneficiaries of
the welfare states and the bureaucrats that ran them,
grew in number, as taxpayers declined as a share of the
labor force. Though Greece was far from the most
productive nation in Europe, Athens led the parade.

After the baby boom ended,
the Pill
arrived in the 1960s. Then came

abortion on demand in the 1970s.

The fertility rate of Greece and
every European nation fell below the 2.1 births per
woman needed to replace an existing population. Greece`s
birth rate has been below zero population growth for
three decades.

Result: In Year 2000, Greece had
just under 11 million people and a median age of 38. In
2050, Greece is projected to have just under 11 million
people, but the median age will be 50.

Were Greece a company, the solution
would be bankruptcy.

But Greece is a country. And a
bailout of $141 billion is being put together by the
European Union and International Monetary Fund.

Why? Because, should Greece decide
not to take a chain saw to her welfare state, but walk
away from her debts and default, she would blow a hole
in the balance sheets of the biggest banks in Europe.

Then the banks would have to be
bailed out.

Seeing Greece`s bondholders being
burned, terrified holders of Portuguese and Spanish debt
would start dumping their bonds, forcing Madrid and
Lisbon to pay a higher interest rate both to sell new
bonds and roll over the old ones coming due. Rather than
savage their welfare state programs, and risk

riots in the streets and a massacre at the polls,
Madrid and Lisbon, too, might look agreeably at default.

Chancellor Angela Merkel, though
exasperated with the Greeks, is

urging Germans to back the $141 billion bailout:
"Nothing less
than the future of Europe … is at stake."

Merkel believes there is no
alternative. But there is an alternative—a restructuring
of Greece`s debt or a default where the holders of Greek
bonds suffer the fate of the holders of bonds from

Lehman Brothers and

General Motors.

Inevitably, this is what is going
to happen.

For how long will Greeks work
longer, retire later and live on smaller pensions, so
holders of Greek bonds can get their interest payments
right on time?

The EU and IMF may, with the
bailout of Greece, kick this can up the road. But the
crisis will return. For the nations of Europe have made
commitments beyond their capacity to keep, given their
growing debts and aging populations.

And America is not all that far
behind.

While the federal deficit is not 14
percent of GDP, it was 10 percent in 2009 and may reach
11 percent in 2010. Trillion-dollar deficits are
projected through the decade, bringing the public
debt—held by citizens, companies, foreign governments
and sovereign wealth funds—close to 100 percent of GDP.

And the unfunded liabilities of
Social Security, Medicare and federal pensions rival
those of Western Europe.

States like California and New
York, larger than Greece, look a lot like Greece. Were
it not for the scores of billions dished out to them by
Obama`s stimulus, some of these states would have come
close to the brink New York City went over in 1975.

Many of these states are today
laying off teachers, letting felons out of prison, and
looking hard at the salaries and pensions of civil
servants. While the temptation is great for Washington
to bail them out again, the United States government
itself has now begun to attract the concerned notice of
holders of U.S. debt.

That we are witnessing Oswald
Spengler`s
"Decline of the West" seems undeniable.

La Dolce Vita is coming to an end.
The ever-expanding European and American welfare states
of the 20th century will contract in the 21st. Some have
already begun to shrink. A time of austerity is at hand.

Indeed, what is about to be tested
is democracy itself.

Can democracies that attracted
universal applause in the golden years of rising
expectations impose upon their citizens the enduring and
painful sacrifices necessary in a time of retrenchment?

We are about to find out.

COPYRIGHT

CREATORS SYNDICATE, INC.

Patrick J. Buchanan
needs

no introduction to
VDARE.COM readers; his book State
of Emergency: The Third World Invasion and
Conquest of America, can
be ordered from Amazon.com. His latest book
is Churchill,
Hitler, and "The Unnecessary War": How
Britain Lost Its Empire and the West Lost
the World,
reviewed

here by

Paul Craig Roberts.