The Greco American model

Greece is a country of 11 million people.  It may be the world’s longest surviving democracy.  Greece is actually known as – the cradle of democracy.  Cradle suggesting that the concept of the people, the citizenry, running their government rather than being run by the government had its very birth and infancy in this Mediterranean paradise.  Wonderful concept isn’t it?  Humans running their own affairs – not some king or queen or military doofus or junta or dictator or religious nutcase.  Just the regular, hard working folk.

Can you imagine?  Just 11 million people surrounded by the very beginnings of human advancement from the trees to the stars.  Lots of fresh water – lots of good arable growing land – lots of lambs for the tasty grilling – lots of grain and olives and cow and sheep milk.  The garden of paradise.  Lots of marble for lasting construction projects.  Lots of good looking guys and drop dead gorgeous women for future generations.  What could possibly go wrong in this garden of Eden?

Today Greece belongs to the European union – a gathering of 28 European countries who joined together in a loose political union but with a single currency – the euro.  Sound familiar?  From many, one?  E Pluribus Unum?

In order to make this union work, the union set up some ground rules.  Mostly about the individual responsibilities of the 28 member countries.  Things like – balance your budget; keep debt under control as in limit it to a percent of your GDP; contribute to the mutual defense of the union.  Really just be a good neighbor, pick up your fair share of the load; don’t do stupid things like spend too much/borrow too much/tax too little.  If you ignore the rules and guidelines, then what?  Well, so far, not too much.  Maybe the union will loan you some money but harsher rules and guidelines will attach – things like get your financial/fiscal house in order.  Pay down debt.  Collect taxes.  Get back in the fold and behave the way the other 27 countries are behaving!

So what do the citizens of Greece do when faced with some bailout loans from the central European government?  Well they go to the polls – remember, this is the cradle of democracy and they vote in a government of kids who have said to the central European governing rulers – up yours.  We don’t like your rules and your guidelines and your debt repayments/austerity plans and programs (sound like anyone here at home?  In America?)

Now, revisit our title please – the Greco American model.

In America the central government does not bother with rules or guidelines.  It borrows and creates more debt – it prints currency and distributes it to the states and the people – it has not even a clue about how much it owes in total – what all the promises and commitments for social security and its thousands of other social programs will cost – it has no clue what its medical commitments for Medicare and Medicaid will cost – it does not know what its own pension and salary and government employee benefits will cost – and it never demands that any of the 50 states match their spending to their tax collection by limiting the growing amount of debt that the states themselves are issuing.  Or as its great leader would say – “We don’t need no stinkin’ rules.  I’ve got a pen and a phone!”

But there is an even bigger difference in this otherwise almost perfect model.  The American model consists of 320 million people.  Remember the Greece model is 11 million – less than 4% the size of the American model.  Which brings to mind one other fundamental we have never mentioned on these pages:

The bigger they are, the harder they fall.