Debt can’t be escaped
My favorite place to live in America is California. But don’t get me wrong — one size does not fit all.
And how wonderful that is, that people differ so much that they could be quite happy living in very different places. I love this since it helps to confirm my individualist position about human social life.
On a recent visit to Portugal, near Lisbon and right off the Atlantic Coast, I rediscovered that country after having been away from it for 40 years. And it comes across very different now from what it was back then. Most surprisingly it comes across to me like, well, California.
Not only is its coastal weather relatively mild and dry but the place is teeming with attractive neighborhoods — not to mention notable history — of all kinds.
Most noticeably, for someone just there for a few days, is how polished is Portugal’s infrastructure. The roads are spic and span; everything is squeaky clean; trains run on time, more or less, and so forth and so on.
All in all Portugal looked to me well cared for, again kind of like much of California.
Sadly, Portugal and California share something else that’s not to be lost sight of: They are utterly broke and in deep, deep debt.
Children and grandchildren in both lands are on the hook for billions to pay back or must ready themselves for defaulting on the debt and having their credit rating destroyed. Businesses will flee and are already doing so in droves.
Countries, communities of all sorts, have gotten themselves into this mess by politicians promising the sky to everyone and making good on their promises by way of fathom resources. We know about this from many of our own experiences and those of our friends and neighbors.
In the past the dire predictions of sensible economists could be met by reminding them that people tend to edge up to the brink of economic disaster but then start to contain themselves radically enough so as to avoid plummeting to ruin.
But while this holds reasonably surely in most people’s private lives, public finance follows different patterns. The tragedy of the commons kicks in and instead of seriously changing from irrational enthusiasm toward caution prudence, public officials — politicians, their cheerleaders, bureaucrats and the rest — get caught up in the spirit of the ponzi scheme, trying to escape the burden of intolerable debt by way of dumping it on someone else, hoping this will avoid having to face the music at any time.