Social Justice And The Welfare State Lead To Unpayable Debt

A nation swamped in debt empowers the government. Not to do good mind you but to ramp up its influence and power over the lives of the people it exists to protect. 

When a culture honours and rewards laziness, apathy, and even immorality at the expense of those who demonstrate qualities like integrity and hard work, society is bound to collapse.

Irony has it that those who suffer the least consequences are usually those who had the biggest role in creating the problem in the first place.

This aptly describes where the West is headed today and we are arriving there quickly.

The debt crisis is endemic and like cancer too far gone, it has riddled our society at every level from the personal to government and all the way to the banks.

Everyone is living dangerously on borrowed (stolen?) money to maintain a standard of living that is unsustainable.

Consider Daniel Greenfield’s analysis of the significant role maintaining the welfare state has had on the entrenchment of the West in debt:

Banks are the root of all evil.

When a member of a traditionally oppressed group wants a house or a car he can’t afford, financial institutions are expected to lend him the money. If they don’t, they’re engaging in discrimination.

Then when he can’t pay, it’s the fault of the evil banks for having “loaded him with debt”.

The mandate for loading him with debt came from the very same people denouncing the debt loaders. Not loaning money was discriminatory and then retroactively, loaning the money was also discriminatory. In the social justice economy, everything you do is always wrong.

As go the people, so go the nations.

Detroit, Puerto Rico and Greece are the victims for having so much debt loaded on them. But who did the loading? Who decided that it was a good idea to keep selling bonds and borrowing money without having an actual plan to pay it back? Financial institutions have their share of the blame, but none of them ever forced a credit card on a politician at gunpoint.

Politicians ran up debt to pay for a wonderland in which there are a lot of public sector workers, few businesses and a lot of social services.

Detroit had 55 residents per government employee. Half the city’s residents didn’t pay property taxes which were the highest of any major city. The employment rate wasn’t pretty. The third largest “industry” was education and health care, both mostly government subsidized, the fifth biggest industry was government. Fourth was manufacturing, which in Detroit has hovered around being state-owned.

 The money had to come from somewhere and eventually the $18 billion bill came due.

Greece has a working age population of around 7 million and over 700,000 government employees; not counting workers in state-owned enterprises. A quarter of government spending goes to paying government employees.

Greece also has a 25% unemployment rate. The fairly generous employment to population ratio is at 39.

The debt is in the hundreds of billions and it isn’t going to be paid back. The debt to GDP ratio is at 175%. Under Obama, we’re also above 100%. Puerto Rico, now in crisis, is at only 70%.

The government is Puerto Rico’s largest employer. Back in the eighties, a third of the working population was employed by the government. There has been some progress since with the ratio falling to a quarter in this century, but some of the load was being shifted over to public sector corporations that were responsible for running up much of the debt.

Puerto Rico has a working age population of over 2 million and had 200,000 public employees. And, depending on how you count, the numbers may be even higher.

All of these stories follow similar narratives.

The left runs a welfare state overseen by a vast number of government employees and agencies. Much of this infrastructure does nothing useful. The administrative sector grows much faster than any other. The public sector employees are unionized. Firing them is a difficult and painful process.

Fiscally conservative governments come into office to try and make reforms, but their reforms are undercut by the bureaucracy. The unions fight privatization every step of the way. There are cries about neo-liberalism and big banks. Meanwhile more bonds are sold to subsidize the mess. The left returns to power shouting class warfare slogans and vowing that it will take care of everyone from cradle to grave.

It can’t do that, but it will bankrupt the system to protect its power.

It’s not just the story of Greece, Detroit or Puerto Rico. It’s also the story of California and the UK. It’s the story of America and Europe.

You can find the same warning signs in major cities across the country, but for the moment there are still enough jobs to keep the system afloat. At least until the jobs and the people leave.

Detroit’s population fell from 1.85 million in 1950 to below 700,000 today. Thousands to tens of thousands flee every year. Things are so bad that experts flirt with filling the city with refugees. 

There are more Puerto Ricans off the island than on it and Greeks have been leaving for a while.

But the same is true of California, New York City or London. Net migration from Europe is hidden by the huge volumes of Muslim migrants coming in from the Third World to mooch off the welfare state.

The left’s response to each setback is to spread the pain. Activists demanded that the people who fled to the suburbs should pay for Detroit’s disaster. The rest of Europe is expected to shoulder Greece’s burden. But spreading the pain only delays the inevitable. The underlying problem is still inescapable.

America has been led down the same bad road by a party that loves the imaginary numbers of Global Warming, but hates the hard numbers of economics. Obama has renamed spending, investing. But the only real investments are in a vast bureaucracy, a welfare state and crony capitalism.

The Obama coalition is based around public sector workers, the welfare class and billionaires getting special privileges in return for contributions. Their “investments” are draining the economy. What the European Union has done to different countries, Obama has done across the nation.

And all of this was done in the name of social justice.

The debt piles up in the name of social justice. The welfare state must be built for the underprivileged. And then when the bill comes due, it’s the fault of the banks and the holders for wanting their money. Any cuts are denounced as austerity. The media fills with horror stories as welfare clients, public sector employees and students riot in the streets in protests that are often funded by wealthy businessmen with ties to the corrupt political infrastructure of the left.

It’s not about the poor. It’s not about the oppressed. It’s about power.

When the left says justice, it means power. Its unwieldy coalitions are kept together by mutual hatreds and massive bribes. The bigger debt, the more the coalition must cling together as it moves from mere theft to mass economic destruction. Economic collapse deepens the complicity of all the players.

The financial institutions that laundered the bonds that paid for their welfare state now become the enemy. But that’s part of the game that the bosses on both sides understand. Financial institutions make a good deal of money by pandering to the terrible spending habits of leftists. Taking the blame for those habits is part of the deal. The left needs scapegoats more than it needs anything else.

A fundamentally false ideology convinced of its own complete rightness needs reasons for its failures. The voters who never asked hard questions about what the cost would be need someone to blame. So do the politicians who took the deals and blew the cash. But all of it is bad acting by bad actors.

When it’s all over, the left will go back to pretending not to know how money works and financial institutions will pretend to believe it. The damage will continue to spread as long as people think that they can buy a better world without ever looking at the interest rate and the final cost.

And it’ll always be the fault of wealthier countries and individuals, the suburbs and Germany and all the ants who worked while the grasshopper sang. It’s the fault of everyone who gave the governments of the left money for a grand social experiment and committed the unpardonable sin of wanting it back.

The question that remains is now that the West is wanning, what will the governments do with their power?


Feel free to discuss.

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