Imagine two alcoholics sitting on a bench. Bill complains that he’s out of booze and has no cash to buy any more. “Hey, no problem, friend, I’ve got a fifth of Old Crow here,” Jack says. “That’s great because, man, I need it right now,” Bill pleads. “There’s just one thing. We’ve both got to do something about our serious drinking problem and I’m going to help us lick it,” Jack responds. “Oh, and how do you propose to do that?” Bill demands, as his shaky hand reaches for the booze. “I’ll share this bottle with you now, but we have to promise we’ll cut back our drinking, starting tomorrow,” Jack explains. “Sure, anything you say, Jack. First thing tomorrow morning. Now gimme that bottle,” Bill shouts. Addiction experts know the end of that story too well — Jack and Bill go on drinking. They’re feeding their addiction today and promising to deal with it tomorrow.
A similar scene is playing out right now on the world stage. Imagine that President Barack Obama is Jack, Greece is Bill, and the fifth of Old Crow is a bailout package from the International Monetary Fund, paid for by the U.S., Germany, France and other European nations that fear the economic consequences of a Greek default. Just as in the imaginary scene on the bench, Obama has offered Greece another “drink,” the next installment payment on the $160 billion bailout package approved last year by the IMF. The U.S. share of the Greek bailout will be approximately 18 percent of the total loan. Whatever the amount, it merely staves off the withdrawal pain of austerity that Greeks — whose welfare-state government has for several decades been on a deficit-spending binge — must endure sooner or later, and which their government agreed to implement in return for the IMF help.
But, just as Jack didn’t mention to Bill that he borrowed the Old Crow from somebody else (whom he promised to repay), the U.S. must borrow from others to fund today’s $1.3 trillion annual deficit. And the U.S. national debt of $14.3 trillion dwarfs the estimated $500 billion owed by Greece. Indeed, the total of all U.S. government unfunded obligations exceeds $61 trillion, according to USA Today. So any aid from the U.S. to Greece via the IMF will be with funds that first must be borrowed from China or somebody else.
As Sen. Tom Coburn, R-Okla, often says, Washington has a spending addiction and too many officials here depend on the same kind of denial that addicts use to shield themselves from reality. Take away their booze, heroin, sex or whatever, and they scream to high heaven, make all kinds of promises about quitting tomorrow, and otherwise say anything to get another fix. Most Washington politicians react similarly when they are told they must stop spending money the government doesn’t have. Tragically, addicts often have to “hit bottom” before they will get help. If Washington finally hits bottom, it will be a Great Depression or worse.