"[...]The myth of the welfare state spread from France and Germany to the rest of the Western world, leading to an explosion of welfare transfers and an equal explosion of the people's expectations with regard to their so-called social rights.
Self-reliance was progressively replaced by a mentality of rights with no duties. As a result, a gigantic disconnect arose between what people are willing to pay in taxes and what they expect in return in the form of government benefits. Because promising welfare is the easiest way to win elections, politicians kept expanding the size of government over the decades. And because the public would not have tolerated an honest increase in taxes to finance the new welfare programs, governments started borrowing the money necessary to finance them. Thus, governments became dangerously in debt. Then the financial crisis came, to a large extent caused by government actions: welfare programs to make true the progressive "homeownership-society" dream in the United States created the structural conditions. Government-sponsored entities like Fannie Mae and Freddie Mac, who bought and guaranteed around 50 percent of the total US mortgage market, offered the financial vehicle to transfer the wealth; and the Federal Reserve provided the easy money necessary to finance it. In addition, the US government was borrowing and spending money at an all-time record in order to finance its warfare/welfare policies.
"For Hessel, if politicians and bureaucrats had more power than they currently have, the system would be less corrupt."In Europe the situation was not that different. The creation of a single currency, again a government decision that in many cases was not even submitted to popular scrutiny through a referendum, enabled countries like Greece, Portugal, and Spain to borrow money at very low interest. The market rightly assumed that if some of these countries defaulted, Germany and France would rescue them. This explains why private investors considered Greek bonds to be as good as German bonds. Using this unique opportunity, politicians in southern countries started an orgy of credit. Their purpose was to win more elections through the promise of more welfare policies. Meanwhile, the European Central Bank was keeping interest rates artificially low, inflating housing bubbles in Spain and Ireland. For a time everyone was happy: politicians were being reelected, the people were getting new government benefits every year, bankers were making tons of money, and industries were booming. It was all an illusion. When the bubble burst in the United States, it quickly became clear that Europe's economic and fiscal situation was also unsustainable.
Now it's time to pay for the party. Inevitably, this means a dramatic reduction in our standard of living. Because people do not understand that the source of the crisis was government, as Bastiat predicted, they now go on the streets demanding even more of what caused the problem in the first place: government. That is the paradox of the outraged
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