Will Low-Income Voters Turn America into Greece?

The welfare state is addictive. Emerging data from Tuesday’s election indicate that if you depend on the welfare state, you were more likely to vote for Obama. According to the Globe and Mail:

The lower the income, the more likely voters were to cast their ballots for the incumbent. Two-thirds of those earning less than $50,000 a year voted for Mr. Obama.

Some reports point to an even higher share than that. This is the real challenge for the future, to explain to these low-income voters why they should vote for someone who will give them a path to financial independence.

A good way to start is to educate the American people – especially low-income families – on the dangers of being dependent on government. This is of course what this blog is devoted to, and it is something that the entire conservative movement should focus on over the next four years.

There is plenty of material to use. All we need to do is glance at what is going on in Europe, and we will find plenty of stories about what America will look like, and what life will be like, for for low-income families if we continue to pretend that the welfare state is the way to prosperity. This story from Der Spiegel is a good example:

Thousands of Greeks took to the streets of Athens on Tuesday on the first of two days of strikes to protest yet more biting austerity measures. Their anger is palpable, but if parliament fails to pass the cuts on Wednesday, the consequences could be dire.

And that is said about a country that has experienced five straight years of shrinking GDP – negative growth, for you in the college faculty lounges – crippling cuts to entitlement programs, and a youth unemployment of almost 60 percent. When Der Spiegel calls the consequences of more austerity “dire”, it hurts just trying to imagine what this will lead to.

As their report continues, we get a frightening picture of what life is like on the edge of fiscal insanity and social instability:

Hundreds of thousands of Greeks began a 48-hour nationwide strike on Tuesday, shutting down schools, banks, local government offices and ports to protest the government’s latest round of austerity measures. Transportation in Athens became difficult as subway and taxi services were halted and flights in and out of the country were stopped for three hours early in the day. State hospitals were running on emergency staff. About 16,000 people gathered at a union-organized protest outside parliament in Athens, where lawmakers on Wednesday will vote on the law, chanting slogans like, “People, don’t bow your heads!” and “This strike is only the beginning!” Several thousand more marched in a separate demonstration in Athens, and about 20,000 protested in Greece’s second-largest city, Thessaloniki.

When the protesters say this is only the beginning, you better believe them. Greek voters are rapidly losing faith in their parliamentary system of governance. The government is playing with things far more dangerous than fire. The vast majority of Greeks think the austerity-driven spending cuts are fundamentally unfair, hurting the poor and needy more than anyone else. This is logical, of course, given that the poor and needy are the ones who are first and foremost targeted by the welfare state. But this also ties in to the U.S. election results: the welfare state is built on the idea that some people are entitled to work-free income, and the more people you can win over for that moral premise, the harder people will take it when the welfare state can no longer deliver on its promises.

Which is exactly what is happening in Greece. Back to the story from Der Spiegel:

In addition to further tax hikes and cuts to pensions, the expected measures will raise the retirement age from 65 to 67 and make it easier to fire or transfer civil servants. Altogether they are aimed at saving the state €13.5 billion ($17.3 billion) and are a key condition of Greece’s international creditors to continue to receive emergency bailout funds.

Without those funds, Greece will go into uncontrolled bankruptcy by the end of this year. That, in turn, would probably mean the end of parliamentary democracy as the Greeks have known it since the end of the military dictatorship in 1974.

It does not help that the governing coalition will only be able to pass this austerity package with a very slim majority. Der Spiegel explains:

The measures are expected to pass with a slim majority. The three-party governing coalition holds 176 out of 300 seats in parliament, but the smallest partner, the Democratic Left, has said it will vote “no.” In addition, a small number of center-left Socialist lawmakers said they will break party ranks and also vote against the measures, leaving the government with 154 votes — just enough for the necessary absolute majority.

In parliamentary systems, such narrow majorities for critical legislative bills always put coalitions in jeopardy. Small parties who have felt that their voice has not been heard within the coalition are prone to break ranks, abandon the coalition and force a new election. This is unlikely to happen right now in Greece, whose two elections this year should be more than enough for a while. But at the same time, the situation in Greece is so extreme that it would be foolish to trust the normal, self-balancing mechanisms of a parliamentary system.

If the left-leaning members of the coalition believe that there are more voters for them to gain by opposing austerity than by supporting it, they will jump ship. Their problem at this point is that a majority of Greeks, while opposing more spending cuts, also support euro membership. When the former majority is substantially larger than the latter, the coalition will probably fall apart.

While the leftists inside the coalition wring their hands and gauge the political barometers, the even more radical left outside of the coalition is pouring more gasoline on the fire. As Der Spiegel reports, those leftists have actually grasped the full extent of what austerity does to an economy:

The main opposition Radical Left Coalition called on demonstrators to surround parliament during the vote, saying the austerity measures “will turn the country into a financial and social desert” and “will lead us decades back, without medicine or state health care, without schools and universities, without a future, with endless armies of unemployed, suicides and desperate people.”

This is precisely what austerity will do to the Greek people. Austerity means government raises taxes and cuts spending, and because those policies never lead to the results intended – a balanced budget – they will go on indefinitely.

That said, the left obviously has its own agenda. It believes that all you need to do is stop austerity, raise taxes on the rich and continue to grow government. But since big government was the cause of the crisis in the first place, that will only lead Greece – and any other welfare state on the austerity downhill – back to square one. Nothing will have changed except the entire nation is poorer.

The only way out is: a) a fiscal cease-fire that ends current austerity measures; b) structural reforms that dismantle non-essential government programs while cutting taxes proportionately to the spending cuts; and c) a transition plan that gives people back their financial independence that was taken away by government when government created its entitlement systems.

Click here for an American version of this plan.

A structural phase-out of the welfare state is the only way to save Greece. The question is, has Greece now fallen below the point where it could execute such a plan? As Der Spiegel explains, the outlook for the economy is even worse than its recent past:

[The] government has forecast an even worse economic contraction next year that [sic] originally thought, as well as a peak of its total debt burden at 192 percent of gross domestic product in 2014 — 10 percentage points higher than its previous forecast.

Add to that the crushing unemployment levels, the collapse in private income and the rapidly spreading social instability, and you may end up with a situation that is nothing short of a national breakdown. That, in turn, paves the way for dictatorial forces to take over.

Greece represents an extreme case of what the combination of a welfare state and austerity can do to a country. With the exception of Spain, no other country is close to where Greece is. For now. But the difference between nations like Portugal, France, Ireland, Sweden or the United States, and Greece, is a difference in degree, not in kind. There is a long but straight road from welfare states struggling with their deficits, and the edge of the dark dungeon where Greece is now fighting for its national survival.

So long as the people who have become dependent on government continue to believe that they are morally entitled to other people’s money, and continue to vote accordingly, we will slowly but inevitably move down that road.

We can stop that journey. We can turn around. We can end the welfare state, and we can do it without leaving the poor behind.