Greece created democracy, and now the Greeks are showing us how to kill it.
It’s simple math to understand what is happening in Greece right now. When Greece joined the euro, it benefited from the financial support of its more fiscally responsible neighbors in the euro zone. Rather than taking the opportunity to enact the structural reforms that could have increased growth — reforms that it still has not undertaken — Greece instead went on a spending spree funded by other people’s money.
Greece has been cooking the books with complicated financial instruments for years. But the problems don’t stop there. Greece’s Rubik’s Cube tax code and rampant corruption make tax evasion widespread. Golden parachute public pensions that allow public sector workers to retire as early as 45 drain dollars out of the government coffers while incentivizing a still healthy and work-age workforce to live on the public dime. It’s hard to have sufficient tax paying workers when about 75% of Greek public-sector employees retire by the age 61.
After taking office in January, the Alexis Tsipras administration reversed promised privatization of state-owned assets like the Port of Piraeus. In 2011, the IMF predicted Greece could bring in 50 billion euros ($56 billion) from the sale of state assets, not to mention the savings from moving those employees off the public wage and benefit system. To date, it has raised about 3 billion euros.
Business has no interest in creating jobs when crushed by government regulation. Tspiras promised to raise the minimum wage, despite the economy spiraling out of control. It’s not surprising the March unemployment rate stood at 25.6%.
This is the European nightmare. The way of Greece is where Hillary Clinton and Bernie Sanders will take us. It’s simple math: You can’t spend more than you take in. You can’t make it impossible for business to thrive and expect the economy to grow. No wonder the U.S. has had a disappointing about 2% “recovery” growth. That’s not an accident—it’s the result of failed policies.
Clinton and Sanders are math deniers, like most of the Democrats in D.C. They want to grow the government economy instead of the real American economy. Rather than pursuing tax reform to improve growth or entitlement changes to reduce future expenditures, Clinton and Sanders are focused on spending trillions on Obamacare, giving free college to everyone, and raising the federal minimum wage.
This was all on plain view in New Hampshire this past weekend, where Clinton spent the weekend promoting a third term of President Barack Obama’s failed policies. The irony is that her dishonesty and lack of transparency is a windfall for Sanders.
Sanders is rising in the polls. Why? Because he’s honest. He freely admits that he believes in socialism, and Democrats are flocking to the only honest candidate running on their side. Sanders should write Clinton a thank you note.
Sanders may be saying what Clinton will not say, but the reality is they’re both socialists. And if you want a peek into our future with Clinton or Sanders, then look at what’s happening in Greece today. Sanders proudly said on Sunday that he wants to raise taxes.
Sanders and Clinton seem to believe prosperity lies in the hands of government. We know it lies in the hands of our people.
We have to stop pretending. Greece pretended that debt didn’t matter for years. It pretended it could spend money it didn’t have. It pretended that there was some mythical pot of money in Athens that didn’t exist. It pretended that 1+1 didn’t equal 2.
The politicians in Puerto Rico are no different. They are demanding that we change U.S. laws so that they can file for bankruptcy. They are even threatening to sway the presidential election in order to force candidates to agree with them. These are the same politicians that led the country to bankruptcy. Everyone knows exactly what is going on here — they are asking the U.S. taxpayers to pay for a bailout. That’s where this leads, and we should be honest about it. I oppose this.
Unfortunately, we better admit that our politicians in Washington are taking us down the exact same road that Puerto Rico is on, and that Greece has gone down. The federal minimum wage has strangled economic growth in Puerto Rico. The Puerto Rican government tried to throw money at the problem with incentive programs to lure business — but that just cost money and didn’t fix the structural problem, so the economy continued to stall.
I know because in Louisiana we reversed decades of outmigration, and we created more than 90,000 jobs by reducing regulations and cutting taxes. Louisiana’s economy boomed. We can do the same for America’s economy. If you want more borrowing and spending, then vote for the Democrats. We know where that leads — Greece and Puerto Rico have shown us how quickly irresponsible spending can kill a democracy.