Europe: the canary in the welfare-state coal mine

Since that time, the debt situation in each of those countries has only gotten worse. The first Greek bailout package, worth more than $110 billion, failed to calm Greece’s creditors.

The tax hikes and spending cuts, forced on Greece by its rescuers, threw the country into a deep recession which only sent its debt-to-GDP ratio higher, from 143 percent in 2010 to 165 percent in 2011.

And then, just as Barraso predicted, Greece, in a very real sense, ceased to be a democracy. Prime Minister George Papandreou was forced to resign by unelected European commissioners after he suggested that Greek voters should be allowed to vote on the terms of the most recent European Union bailout package.

The European Commission then handpicked his replacement, former European Central Bank Vice President Lucas Papademos.

The coup by Europe’s unelected bureaucrats was not limited to Greece. In Italy, where the government’s debt-to-GDP ratio is 121 percent, Prime Minister Silvio Berlusconi was also forced to resign.

He was replaced by European Commissioner and Goldman Sachs adviser Mario Monti, who had to be appointed “senator for life” before he assumed control of the country since he had never been elected to anything.

European Council President Herman Van Rompuy said of Italy at the time, “the country needs reforms, not elections.”

But the experts’ reforms are still failing to quell the continent’s burgeoning debt crisis. The reality is that the European welfare-state model is broken. Italy and Greece are just its first national victims.

In 2006, the European Commission produced a report on the impact the continent’s aging population would have on the economy. The study found that due to Europe’s expansive pension, health care and unemployment obligations, its productive capacity would begin to fall once the working-age population reached its peak. Europe reached that tipping point right on schedule in 2010.

Europe, the report predicted, will go from having four people of working age for every elderly citizen to a ratio of 2-to-1 by 2050. The study also predicted that, as the working-age population shrinks and the European welfare state grows, GDP growth will shrink by 1.3 percent a year.

The only reason that Germany and France have so far escaped Italy and Greece’s fate is that their economies are growing at much faster rates than their southern counterparts.

But as that begins to change, as Europe’s demographic decline puts their welfare spending on steroids and saps economic growth, Germany and France will eventually find themselves in the exact same debt spiral that Greece and Italy are now in.

The same could easily happen to the United States, too. Our debt-to-GDP ratio (100 percent) is already higher than Germany’s (83 percent) and France’s (87 percent).

According to the 2011 trustees report, the Social Security system is paying out $46 billion a year more in benefits than it takes in from taxes. And President Obama has only made the situation worse. His signature domestic accomplishment, Obamacare, created a brand-new $1 trillion entitlement spending program.

But don’t worry. Just as the European Commission stepped in and provided unelected bureaucrats to rein in government spending, after that spending had already torpedoed the economy, Obamacare created its own batch of unelected bureaucrats empowered to ration out the health benefits of the welfare state.

Unless Obamacare is repealed, the law’s Independent Payment Advisory Board will reshape the entire U.S. health care system through mandates, spending caps and price controls.

And like the Greeks and Italians, you’ll be powerless to stop them.

Conn Carroll is a senior editorial writer for The Washington Examiner. He can be reached at [email protected].