With the defeat of President Sarkosy of France by the Socialist Party candidate, Francois Hollande, France is most likely only the first of other European countries where voters will throw out governments that support austerity measures. Already German Chancellor Merkel’s Christian Democrats have lost a key local election, and popular sentiment in Greece is such that its government’s fall is just a matter of time. Europeans, like many Americans, have been spoiled by years of government benefits. Since they are used to such benefits, the idea of losing them is repugnant to the European public. Like most people, they think in terms of their short-term wants rather than the good of the whole. Government programs cost money, and raising more money to mitigate austerity measures means raising taxes. Raising taxes will result in a more sluggish economy and possibly less revenue for the government. If the current trend away from austerity continues, it appears that massive defaults by European nations are inevitable. The consequences, not only to the people of Europe, but also to the people of the world, could be devastating.
If the government treats people like children they will behave accordingly. Europeans naturally wanted an easier life after the horrors of a worldwide depression and two world wars. “The Sweet Life” with two-month paid vacations and limited hours working each week was too attractive for them to resist. As long as Europeans had a moderate to high birth rate, this system could, more or less, work, since young and productive workers continued to be added to the tax base. However, a birth rate below the population replacement value has left Europe aging, with entitlement programs draining treasuries to the point that the only choice for solvency is to borrow more. Debt piles up to the point that a country’s credit rating drops, making it harder to get good loans with reasonable interest rates. If loaning institutions lose confidence in a country over its lack of an ability to ensure a lender a return on investments, those institutions naturally would stop loaning money.
Europeans do not understand that a massive default would destroy the solvency of all the government programs and entitlements that they want. Some austerity now may allow a chance for recovery, provided that the pool of young (especially the skilled young) workers is replenished. This will most likely not be the case, as France and other European countries import foreign workers to meet their employment needs. Considerable opposition in France to such immigration and resulting damage to French culture is reasonable, but then there should be a concomitant interest in native French having more children. Given the contemporary notion that children are a burden rather than a gift, it is doubtful whether most French people will do so, even if offered government incentives. The majority of the French want to eat their cake and have it too (which is the right metaphor, by the way)–to continue to have extensive government benefits while watching what is left in the treasury melt away, only replaceable by higher and higher loans.
A massive default could lead to a worldwide Depression such as has not been seen in Europe since the 1920s (and from late 1929 onward in the United States). If other world markets collapsed, there could be a worldwide Depression that would make the post-1929 Great Depression in the U.S. look like good economic times.
The individualism and egoism of the Enlightenment is finally coming to fruition. Self-centered people will leave a world of economic ruin to those who come after them. Socialism, unlike its proponents’ claims, leads not to greater cooperation, but to greater selfishness. Such selfishness, when “fullgrown,” will leave its ruinous fruits behind if Europeans (and Americans) to not change their course.