Campaign For Liberty 
Friday, February 19th, 2010
How long have European socialists been telling us how successful European welfare-statism has been? The governments in Europe’s socialist countries, they tell us, take care of their people with pensions, social security, free health care and education, and job security. And everything, they say, is just hunky dory.
But as we libertarians have been telling American socialists for decades, it’s just a matter of time before socialist systems start cracking apart, which of course has now occurred in Greece.
A system in which the government doles out money to people presupposes one important factor: that there are people in the private sector with income and wealth to take the money away from, so that government officials can turn around and give it away to others.
That fact oftentimes shocks statists. They live their lives under the pretense that the government operates just like a private business. That is, they think that the government is providing valuable goods and services that people are willingly paying for, a like a private business does. Then, they figure that when the government is doling out its fruits in the form of welfare, it’s doing it with its own hard-earned money, just as a private business might use some of its profits to give to charity.
Not so! The government gets its money by force, by simply seizing it from people in the private sector. The process is called taxation. The government finds people with money and takes a portion of it. It retains a percentage of that money to pay its own expenses — government salaries, overhead, etc. — and then doles out the rest to the recipients of welfare (or warfare) largess.
Since the government gets its money by taking it away from people who have money, it’s obvious then that the whole system depends on people in the private sector having money. If everyone in society is penniless, obviously a welfare state cannot work because the government has no one to tax in order to get its welfare money.
So, in order for a welfare state to exist, the private sector must first build up a base of income and wealth. Ironically, the best way to do that is for government to leave people free to accumulate wealth. As people begin accumulating wealth by selling goods and services to others, they tend to save a portion of their income. That savings goes into capital — tools and equipment — which then makes people more productive, which then tends to raise real incomes. Over time, the overall base of wealth begins growing exponentially.
Enter the socialists. They see this gigantic base of wealth and go nutso. They simply cannot help themselves. They just want to take, take, and take. And they’re never satisfied. They always want more and more and more.
For a while their welfare system seems to work. The socialists pluck the golden goose but the goose is still able and willing to lay eggs. But inevitably, out of their insatiable thirst for more resources, the socialists over-pluck, which causes the goose to lay less eggs. Ultimately, the goose starts getting thinner and weaker, until it finally dies.
And that’s precisely what has happened in the beloved socialist paradise of Greece. They taxed and taxed and spent and spent on their socialist schemes. In fact, not satisfied with the amount of money the taxes were bringing in, the socialists went on a borrowing spree, one similar to that which U.S. officials have embarked upon to pay for their socialist and imperialist schemes.
Of course, no one cared about all that rising debt. ֻNo need to worry. We owe it to ourselvesֻ the Greek Keynesian professors undoubtedly instructed their students. Financial data was even falsified in the hopes that people would never discover what was going on.
But finally, the ever-growing spending, debt, and taxes got so inordinately high that the private sector was no longer able to bear the burden of it all. The beloved Greek welfare state cracked. Bankrupt. Busted. Another socialist success story, just like the one in the Union of Soviet Socialist Republics.
How are they resolving the welfare-state crisis in Greece? By taxing the private sector in other EU welfare-state countries in order to provide a government-to-government welfare dole to the Greek government.
But it’s just a matter of time before the same crisis strikes other European welfare states. Who will bail them out? Don’t count on the U.S. government. It’s following the same road as Greece.