Have you ever wondered about the future of American Social Security? What will happen when liabilities are larger than the credit of the country?
A story today on Yahoo News revealed that retired Greeks who traditionally draw their government pensions in cash from their local banks are now finding that the banks only allow small portions of the pensions to be paid out.
Greece, like the U.S., has gone through years of socialistic, redistributionist governance. Just as in the U.S., government spending has taken up a larger and larger share of the country’s GDP, as grandstanding politicians made promises to the electorate. Health care, job security, and retirement security were all promised by politicians.
Greece’s retirement program–just as American Social Security–incentivized Greeks to work less, save less, and invest less. Just as people themselves lost productivity and prosperity, the country as a whole became weaker and poorer over time.