Italy is a mess. It's tempting to say, "That's just Italy." Tempting perhaps but untrue, too.
Ok, maybe it includes Greece, Spain, Portugal and perhaps even France, you say.
But how about the U.S.? What lessons are there to be learned from the Italians that We the People should internalize before we end up in a similar predicament?
Roman Decadence, American Sequester reads in pertinent part as follows:
". . . the center-right coalition led by Mr. Berlusconi—convicted only last
October of tax fraud and under indictment for paying for sex with an underage
girl—scored a respectable second-place finish in Italy's lower house and may
have won a blocking plurality in the Senate. The ostensible winner of the
election, Pier Luigi Bersani of the center-left Democratic Party, is an
ex-communist whose chief recommendation for office is his cultivated
colorlessness. And running a close third is Beppe Grillo, a professional
comedian and real-life clown.
How does this happen to a country?
The easy answer is to shrug: Isn't that just Italy? . . . Tim Parks, an English novelist who lives in Verona, ascribed
Mr. Berlusconi's abiding popularity to Italians' "collective determination not
to face the truth, which again combines with deep fear that a more serious
leader might ask too much of them.". . .
In its analysis of the Italian economy, the
Organization for Economic Cooperation and Development noted that in 2010 the
public sector accounted for a whopping 49.1% of total gross domestic product.
Since Italy's technocratic Prime Minister Mario Monti came to power in late
2011, taxes have only been going up, including a value-added tax that is now
22%. The typical Italian employee loses 47% of his wages to fund various social
Italian employers have it no better: A labor reform promoted by Mr. Monti did
little to ease the biggest problem employers face, which is the
near-impossibility of laying off workers. The grip of unions is overpowering:
The OECD notes that Italian industrial productivity is declining even as
industrial wages have risen throughout the financial crisis.
A better place to look is the growth of Italy's entitlement state. In
1950—the beginning of Italy's Miracolo Economico—GDP per capita stood
at €4,407 (in current euros). By 1978 it had nearly quadrupled to €16,596. But
afterward it began to stagnate. Per capita GDP has now been essentially flat
What happened in 1978? Funnily enough, that was the year Italy adopted
universal health care. The Italian economy did continue to grow in the 1980s,
nominally becoming the world's fourth-largest economy in the late '80s. But it
did so on borrowed money. In 1982, the debt-to-GDP ratio stood at 51%. By 1990
it was 102%. Since then there have been a variety of attempts to curb the growth
of government and loosen the shackles of over-regulation, none of them
especially serious. Italy's debt now stands at 126% of GDP, second only in
Europe to Greece. . . .
Italy simply has an advanced case of entitlementitis.
And summoning the political will to overcome it is never easy.
Which brings us to the sequester in the United States. Yes, it's a hatchet
not a scalpel. Yes, it will hobble our defenses. Yes, it avoids making cuts to
the entitlement programs that are the real drivers of our national debts. And
yes, President Obama will want to game the cuts to his political advantage,
regardless of consequences. All true. Then again, U.S. government spending is
now 41% of GDP. We, too, are in Italian territory.
The sequester is going to hurt. But when else will we be able to summon the
seriousness to cut? To judge by what just transpired in Italy, they've long
since passed the point of no return. Has the United States?"
The Europeans are trying to teach us a lesson so that we won't have to learn it the hard way.
Especially the Greeks and the Italians, although the French and English appear headed to oblivion as well.
Let's hope ALL the members of the government knows best gang in Washington are watching the action in the rest of the world.
It's a lesson very much worth learning, if only for the sake of future generations of Americans.