After America

skids.

The EU is now throwing an extra trillion dollars at countries which by any objective measure are insolvent, and are unlikely ever again to be anything but—at least this side of bloody revolution. How do you grow your economy in an ever shrinking market? Greece is a land of ever fewer customers and fewer workers but ever more retirees and more government.

How do you increase GDP? By export? To where? You’re entirely uncompetitive; you can’t make anything at a price any foreigner would be prepared to pay for it.

When you binge-spend at the Greek level in a democratic state, there aren’t many easy roads back. The government introduced an austerity package to rein in spending.¹⁷ In response, Greek tax collectors walked off the job. Read that again slowly: to protest government cuts, striking tax collectors refuse to collect taxes. In a sane world, this would be an hilarious TV comedy sketch. But most of the western world is no longer sane. It’s tough enough to persuade the town drunk to sober up, but when everyone’s face down in the moonshine, maybe it’s best just to head for the hills—if you can find anywhere to flee.

Let us take it as read that Greece is an outlier. As waggish officials in Brussels and Strasbourg will tell you, it only snuck into the EU due to some sort of clerical error. It’s a cesspit of sloth and corruption even by Mediterranean standards. If you were going to cut one “advanced” social democracy loose and watch it plunge into the abyss pour encourager les autres, it would be hard to devise a better candidate than Greece. And yet and yet… riot-wracked Athens isn’t that much of an outlier. Greece’s 2010 budget deficit was 12.2 percent of GDP;¹⁸ Ireland’s was 14.7.¹⁹ Greece’s debt was 125 percent of GDP;²⁰ Italy’s 117 percent. Greece’s 65-plus population will increase from 18 percent in 2005 to 25 percent in 2030;²¹ Spain’s will increase from 17 percent to 25 percent.

Some of the oldest nations in the world are now in the situation of a homeowner who’s fallen too far behind on the payments and has no prospect of catching up: you might as well just put the door keys in an envelope, shove ’em under the door of the bank, and move on—perhaps to an uninhabited atoll in the South Pacific as yet unspoilt by unsustainable levels of government. At some point, the least worst option becomes armed revolution, civil war, or at least an electro-magnetic pulse attack that conveniently obliterates every single bank account and wipes the slate clean. As lazy, feckless, squalid, corrupt, and vicious as Greece undoubtedly is, it’s not that untypical. It’s where the rest of Europe’s headed—and Japan and North America shortly thereafter.

THE GREEK BONE CONNECTED TO THE KRAUT BONE

Greece is broke, and has run out of Greeks. So it’s getting bailed out by Germany. But Germany also has deathbed demographics: as Angela Merkel, the Chancellor, pointed out in 2009, for Germany an Obama-sized stimulus was out of the question simply because its foreign creditors know there are not enough young Germans around ever to repay it.²² Germany has the highest proportion of childless women in Europe: one in three fraulein have checked out of the motherhood business entirely.²³

Absolved from having to pay for their own defense, Continentals beat their swords into welfare checks, and erected huge cradle-to-grave entitlements. Even under the U.S. security umbrella, they proved unsustainable.

Why? Well, like Keynes said, in the long run we are all dead—so why not bilk the future? We won’t be here, and our creditors won’t have a forwarding address. No one has engaged in transgenerational theft on the scale that Europe has.

And these days Germany has to support a continent. It’s the economic powerhouse that’s supposed to be rescuing the euro and preventing the five soidisant PIIGS (Portugal, Italy, Ireland, Greece, Spain) from having the Big Bad Wolf of reality blow their house of straw to smithereens. But what happens when your engine room is rusting? “Germany’s working-age population is likely to decrease 30 percent over the next few decades,” says Steffen Krohnert of the Berlin Institute for Population Development. “Rural areas will see a massive population decline and some villages will simply disappear—Germany will become a weak economic power in the future.”²⁴

The EU committed (to borrow from Philip K. Dick) a kind of pre-crime: it mugged the next generation. For the moment, the victims are still walking around, mostly unaware of what they’re in for. For many of them, life is good. Take Marina Casagrande of Bergamo.²⁵ In Italy, a court ordered her father to pay Marina an allowance of 350 euros—approximately $525—every month. Signor Casagrande was then sixty. His daughter was thirty-two. She was supposed to have graduated with a degree in philosophy eight years earlier but, though her classes ended way back at the beginning of the century, she was still working on her thesis. So Signor Casagrande is obliged to pay up, either in perpetuity or until the completion of Marina’s thesis, whichever comes sooner. Her thesis is about the Holy Grail. Which Marina would have little use for, given that she’s already found a source of miraculous life-transforming powers in Papa’s checkbook.

Marina is what they call a “bambocciona,” which translates, roughly, as “big baby”—the term for the ever- growing number of Italian adults still living at home, in the same bedroom they’ve slept in since they were in diapers. There was, as usual, a momentary spasm of ineffectual outrage over the judge’s decision against Signor Casagrande, whose very name is mocked by this demographic trend: the casa would seem much more grande if only Junior would move out. But in Italy they rarely do: seven out of ten adults aged 18 to 39 live with their folks.²⁶ Sixtysomething Italians ordered to pay “child support” to thirtysomething kids might consider moving back in with their nonagenarian parents and suing for a monthly allowance backdated to the early Seventies.

Italy’s bamboccioni have their equivalents around the world. In Japan, they’re called parasaito shinguru—or “parasite singles,” after the horror film Parasite Eve, in which alien spawn grow in human bellies feeding off the host. In Germany, they’re Nesthockers with no plans to move out of “Hotel Mama.” In Britain, they’re KIPPERS (Kids In Parents’ Pockets Eroding Retirement Savings). In Canada, by 2006, 31 percent of men aged 25 to 29 were still sleeping in their childhood bedroom each night.²⁷

The economics of demographics used to be relatively simple: in a traditional agricultural society, by the time you got too worn and stooped for clearing and plowing, you hoped to have sired able-bodied 13-year-olds to do it for you. Today, most developed nations have managed to defer adulthood and thus to disincentivize parenthood—quite dramatically so, if the judgment against Signor Casagrande holds. Why blame his daughter? No matter how long you stay in school in Italy, there’s nothing waiting for you when you come out. Francesca Esposito was twenty-nine, spoke five languages, had two degrees, and could land no job other than an unpaid traineeship with a government agency facilitating millions of euros’ worth of false disability claims.²⁸ “I have every possible certificate,” she told the New York Times, which, in its poignant profile of Italy’s young, never seemed to consider whether such expensively acquired “certification” is necessary for a government job—or most others. Young(ish) Francesca had a law degree from Italy, a master’s from Germany, and had interned in Luxembourg at the European Court of Justice. A century ago, this leisurely, indulgent saunter through a tri-national varsity would have been the province of bored aristocratic scions with no interest in politics or soldiery, but somehow Europe got the idea to universalize it. Miss Esposito’s father is a fireman, her mother a high school teacher. She is the first in her family to learn a foreign language and graduate from college.

And she may well be the last. There is absolutely no return on investment, either for her or the Italian taxpayers who funded it. How could there be? A world in which you’re expensively educated till thirty to join a government agency justifying its own expansion by manufacturing welfare fraud is almost too perfect an emblem of the European Union. Francesca will live a worse life than her parents. She will do unpaid traineeships and low-paid short-term contract work because in Europe’s catatonic labor market the young (if one calls twenty-nine “young”) are already paying the price for the lavish salaries and benefits awarded to the unsackable middle-aged. Hence, bamboccioni, Nesthockers, and KIPPERS. There used to be an English expression, “kippers and curtains.” In Europe today, it’s KIPPERS—and curtains. “Hope ’n’ change”? To be young in the EU is to live in a land beyond hope.

Debt operates on certain assumptions: if you need $500 and you don’t have it, the bank will lend it to you