Utopia = Broke

A decade or so ago, when comprehensive health care policy began to really take center stage, it was not uncommon to hear something like “well look at Europe, they have a centralized government sponsored health care system, and none of the doomsday scenarios have come true!”

This point was notably absent in the most recent healthcare debate. This was primarily because there wasn’t really a debate–more of a rapid expenditure of political capital to ratify a bazillion pages of text as law–but it was also because Europe had actually started wobble pretty badly economically.

One person on Facebook tried to use that argument a few months back, and I said something to the effect of “If you read what’s going on over there, actually it is starting to cause major problems…it’s starting with Greece and will continue to Spain, Portugal, and throughout Europe”. And here we are. Europe is facing it’s very own collapse, and there are rumors that they will announce their own massive bailout this week….a bailout that will rival the U.S. bailout in 2008.

Basically what’s happened is that European countries have bankrupted themselves due to Socialist utopian policies (with a little bit of corruption tossed in). And I’m not just shouting “socialist” for effect here…that’s the name of the ruling parties. They call themselves that. Over there they don’t mind the term.

Granted, such a collapse would not be completely due to health care. Health care is only one of the policies that is bankrupting them. But the lesson is clear. Populist/utilitarian and government-centric policies can use debt to skirt the economic concept of scarcity for awhile, but sooner or later debt won’t work. Then you have:

A) a bunch of people who lent money to a supposedly secure and trustworthy government who now have nothing to show for it
B) an economy dependent on government spending that suddenly disappears.
C) a bunch of people that require government to survive (literally)

Then everything goes crazy while the socioeconomic and political layout is up for grabs. Riots in Greece are just starting.

The EU is a little different in that no individual state controls the money. This forces the situation to resolve more quickly because the country can’t just print money to pay the debt. Thus they have to either restructure their entire worldview or find someone else to foot the bill for a little longer.

The UK will last a bit longer with the pound because it’s their own money. They’ll try to fix things internally and it won’t be so obvious.

Like the U.S. bailout, a European bailout will simply kick the proverbial can down the road with more and more debt. The clock is ticking on all this. The can will hit the wall.