Their model turns out to be PIIGS

Below is the first half of a great article:

Greece: Coming Attractions? … Or Wake-Up Call?

by Of Thee I Sing 1776

"It is not the magnitude of the rapidly collapsing Greek economy that should concern us in America. It is, rather, that Greece is unquestionably the proverbial canary in the coal mine that should have the American ruling class burning the midnight oil to extract us from the mess they and their predecessors have created for us. Instead, our government is ignoring the warning.

The left in America, has flirted with the European economic welfare paradigm for years and now we have an Administration that has morphed that flirtation into a full blown love affair. Greece, which has spent itself into oblivion providing unsustainable benefits (mostly to ever-growing public payrollers) is, we are told, an aberration and the Administration will, no doubt, say the same thing about Portugal and Italy and Ireland too. But then we have Spain and Great Britain and even France (and let’s not forget Iceland) staggering down the same path toward economic never-never land, all suffering from the same delusional affliction that is now being pursued with gusto by our ruling class…the belief that we can best improve life for all Americans, nearly half of whom pay no taxes, by raising taxes on the declining number of Americans who do.

The left has always believed that prosperity is something that can be bought through government taxation of society’s income, rather than something that is simply a by-product of society’s productivity. Let us say it again. Government cannot create sustainable wealth or prosperity. Only the people, individually and through the commercial and industrial institutions they create, can do that.

Healthy societies are growing societies that earn the means (the capital) for reinvestment in continued health and growth. In this process of market-driven growth everyone who participates eventually prospers. Healthy societies are not those such as we are witnessing in Europe, whose earnings are sucked dry by government for redistribution to accomplish objectives as dictated by government planners. Yet it is this withering European model that our current Administration and its congressional majority have embraced, notwithstanding the warnings screaming at us from across the Atlantic and throughout nearly every precinct in America. President Obama has stated, unambiguously, that he personally believes that at some level of income no one needs to earn any more, presumably the point at which government should take the balance for redistribution. He acknowledged, however, that this view was, “not the American way.”

While there are structural differences between the debt-laden welfare states of Europe and America, there are very frightening similarities between the course we are now pursuing and the course that has brought so much of Europe to such sorry circumstance. The primary difference, of course, is that Euro-denominated states cannot monetize the burgeoning debt created by their own individual budget deficits. That is, they do not have the ability to devalue a national currency as we can by printing more of it. That is because the twenty-seven Euro countries are all yoked to the Euro. That said, the problem being experienced in Europe is not, at its core, currency driven. It is caused by excessive overborrowing to support programs that cannot be paid for from current revenue, which results in accumulated debt that cannot be retired through economic growth because the debt service burdens consume the capital which would otherwise be available to create that growth.

Greece, like the other PIGS countries (Portugal, Italy, Ireland and Spain) as well as Great Britain, France and Iceland got into so much hot water (or red ink) by spending (and committing to spend in the future) far more money than their already high tax rates could fund, so they borrowed with the same abandon that the United States is now funding its commitments. They, like the United States, have turned time and time again to taxes and debt to stay afloat but never to sustained reductions in spending. Never, of course, is a very long time and, in Europe, time has finally run out. The creditor nations (or, we should say, the central banks of the creditor nations) have had enough and severe spending cuts are being imposed on Greece, as they surely will be on the other high spending countries of the EU if defaults on national debt are to be avoided..."