A Bankrupt Womb to Tomb Welfare State

I am going to start this blog by mocking socialism.  However, I will further explore the real EU financial crisis with a less biased opinion about the socialist system in a special note following this blog.  Although what I’m blogging has some element of truth to it, it should not be taken at face value.

I am a keen follower of the E.U financial crisis and I've now reached a point where I am becoming more interested in the social harmony of the PIGS (Portugal, Ireland, Greece and Spain) than the tricky derivatives and fancy Goldman Sachs accounting that has really brought Greece on the brink of imploding.   As a Gambian, I became very drawn to one particular sector  (Tourism) that experts are now also attributing to the failure of Greece’s financial system.   Gambia like Greece is also betting on tourism led economic development as the mainstay of their economy.

One of the main factors that led to the Greek Financial Crisis is that Greece increased its investment in infrastructure development and borrowed a lot of money to take up many elephant projects African governments are famous for.  During the tourism boom, economic experts and politicians earmarked Greece to be the “IT” place for tourism.   The Greek government believing in this hype built a Las Vegas kind of atmosphere in a lot of its cities and investing heavily in 5 star hotels, mega gambling and entertainment facilities.  As the years went by however, the plan did not work and it backfired economically.  And since Greece really did not have a plan B, their bet on tourism led economic development miserably failed.

Why is this a problem? 

One must consider that Greece must generate lots of capital to sustain its welfare state.  Greece happens to be one of the socialist European nations that allows its citizens to retire at the age of 50.   With its low population growth rate and stringent migration policies, the Ponzi Scheme of a social security system that handles pensions and retirement will eventually boil over as the workforce thins.  The failure of the tourism led economic development agenda which promised great capital return  to sustain the Greek economy leads me to question the sustainability of the Greek welfare system.

The above argument is easily refutable by simply pointing me to countries like Germany and Sweden who are “thriving” under similar welfare states.  However, the problem is, Europe was not created equal.   There is a popular Ivorian saying that states “Les moutons se promènent ensemble, mais ils n'ont pas le même prix” – meaning sheep may roam together but they are not the same price.   In places like Greece and other bankrupt European nations that are not economically on the level of Germany and some Scandinavian countries, their governments should not encourage a welfare system that encourages dependency.   A lot of people in these countries are actually content with not having a job.  One must question the logic behind such a system for a country that does not have the modern technology or intellectual capacity that would fetch them the capital muscle of the Germans (who Greece has been bugging for a bail out by the way).  

But politicians in Greece are smart right?  They are after all in the E.U. and so they have to figure out a way to keep up with the Joneses (that is, the Germanys and Denmarks of Europe).  They did so by taxing businesses in order to feed their socialist welfare system that endeavors to provide for its citizenry from the womb to the tomb.  What happened next was no shocker; businesses massively started evading taxes that hindered their ability to maximize profits.  This further compounded the Greek financial headaches. 

I personally do not believe in government giving its citizenry fish;  I believe all governments must endeavor to teach their able-bodied citizens to fish instead.  Government’s job is to provide an environment where its citizens will have the opportunity to make a living and that’s it.   The welfare system that exists in Greece is encouraging dependency and taking away any motivation adults should have to go out and get a job.  Welfare for all is totally fine if they can afford it, but Greece does not have the capital to support such a system, hence they must devise a way to increase the retirement age, get their young population into the labor force, tax them and reduce taxes on businesses so that companies will actually pay taxes instead of evading them.  This will give businessmen an incentive to stay in Greece and employ Greeks.

Let’s even look at this from a religious standpoint.  Greece has touted themselves as devoted orthodox Christians for a long time with 98% of its population identifying with the Orthodox Church.  I would venture to say that religion is above government for most followers and on that note, I would like to encourage the Greeks to read the bible more.  I want them to pay special attention to Exodus 20:8 which states,  “six days you shall labor and do all your work.”  This is a formula that the Almighty has given people so that they won’t be totally dependent on government redistribution of earnings from the hard working.

OK, I’ve BS-ed my way into using a religious text I have no understanding of, and I must end here before the Greeks deny me Visa.