Whether in the fights over the U.S. debt limit or the rioting in Athens, the common global theme is not poverty in absolute terms, but more often fairness — as in having about the same amount of things as others do.
Here in America, the months-long impasse over the national-debt ceiling continues. President Bush borrowed nearly $5 trillion in eight years. But President Obama easily trumped even that staggering figure with his plan to borrow over $6 trillion in his first four years in office. The architects of his economic policy — Austan Goolsbee, Peter Orszag, Christina Romer, and Larry Summers — have all resigned, and are now either back in tenured academia, making lots of money in the much-criticized revolving door, or writing op-eds about why the president’s plan isn’t working — or all three.
Now Obama is demanding higher taxes to prevent a government default — apparently on the logic that everything he did with his previously borrowed $5 trillion was vital to the republic and all elements of it must remain unquestioned. So his sudden fiscal sobriety assumes the propositions that (1) all his borrowing was necessary, and (2) new taxes must be levied to pay off the borrowing inherited almost entirely from George W. Bush.
Abroad, the Greeks are still demonstrating, and occasionally rioting, over new austerity measures, angry that their northern-European creditors insist on having their $180 billion paid back, with interest. Meanwhile, $120 billion in Irish bonds were just downgraded to junk status — a message to bondholders that even sky-high interest returns are not worth the likely loss of investment. Even larger combined Portuguese, Spanish, and Italian defaults are looming, as most of the southern-European countries now owe more to foreign banks than their economies produce in goods and services in an entire year. The common denominator is anger at those who lent the money — not at those who spent it. No Athenian pauses to consider that Athens in 2011 is far richer than it ever was before 1980.
If one were to add up current American and European aggregate debt, and factor in the trillions more owed in contracted pensions, Social Security, and promised health-care payments, the tab is unsustainable. The only mystery is whether the crash will come hard and quick, as creditors lose their investments — or whether austerity plans can force once-affluent publics to curb consumption while slowly paying back money to those who already have more money than do those who borrowed it.
The most obvious cause of this transatlantic mess is an aging and shrinking affluent Western population. It is retiring earlier, living longer, and demanding more expensive medical treatment. It envisions retirement not as the quiet sunset years, but as a promised payoff in which to live well rather than scale down. Larger governments tend to redistribute and regulate shrinking capital rather than encourage the expansion of new wealth through more industrial production, exploitation of gas, oil, and coal, increases in irrigated agricultural acreage, or development of mining, timber, and maritime resources.
More ominous still, there is increasing furor among the beneficiaries at those who lent the money they borrowed. Greeks do not blame so much their own socialist entitlements for their mess, but more often the supposedly “greedy” German bankers who were foolish enough to lend them the money to pay for those entitlements. The Irish are furious at continental Europeans for insisting that every penny loaned be paid back.
Here in the United States, the 5 percent of the population that pays nearly 60 percent of all the income taxes collected is excoriated as selfish and greedy for not being willing to pay even more. The 50 percent of the population that pays no income tax at all feels that it deserves even more from those who make more.
In other words, we are living in a paradox. Never has the Western public been so rich, lived so long, and been given so much government support — through unemployment insurance, food stamps, generous pensions, and medical care. Never has Western technology extended so many conveniences to so many millions, whether new medical technology, iPhones, GPS systems, or personal computers. Never has free-market capitalism created such wealth to fund redistributive government.
Yet the new good life is seen more as a birthright than as a miraculous extension of the extravagances of the very rich to the common man. Never in the history of civilization have two billion workers, in China and India, produced so many goods that have made everything from tennis shoes to plastic chairs so cheap and available — and never has such newfound largess been so underappreciated.
So in the midst of this surfeit of technology and entitlements, Westerners are furious that they cannot have even more — usually as defined by what a few others who are even better off have. President Obama harps on private jets at the expense of kids’ scholarships, but never mentions the fact that millions of the poor and middle class now have access to jet travel that is just as rapid and safe, and never questions whether some perpetual adolescents on government-subsidized scholarships really belong in college. It is instead assumed that some wrongly have private jets, and all kids rightly deserve college. The West has mostly conquered the existential poverty that plagued it for 2,500 years; obesity, not malnutrition, is a national epidemic in the United States. But the obsession today is ensuring absolute material equality, or the impossible notion that everyone must have more or less the same things regardless of how they are to paid for.
Behind the rioting in Greece and the demagogic speeches in Washington is the common premise that our individual well-being must be judged in relative, not absolute, terms, and only in terms of material rather than spiritual wealth. All sorts of specific constituents “deserve” largess, apparently from a vaguely envisioned “them,” whether German bankers, private-jet owners, or those who surely gamed the system to make over $200,000 a year.
In short, the more we have, the more we want, and the more we will feel deprived at seeing others with more than what we have. That is at the heart of the current Western malaise, from Washington to Athens.