Rich Nations That Went Broke By Spending Too Much

Think we can spend our way out of this economic problem? Maybe. But it could lead to something worse.

From the article:

Before [WWI], Germany had established a big welfare state, and during the war it expanded dramatically. It wasn’t dismantled after the war. Germany had a financially troubled government-run pension system like our Social Security. The German government provided health insurance for millions of people. There were German government programs for 1.5 million disabled veterans. The German government bailed out municipalities. The government lavished subsidies on the arts. There were government-run theaters and opera houses. Government-owned railroads lost money. Government-run enterprises couldn’t even make money producing margarine and sausages.

This runaway inflation destroyed savings, bankrupted and disillusioned middle class Germans whom Adolf Hitler appealed to as “starving billionaires” – they had billions of paper marks but couldn’t afford a loaf of bread. Hitler emerged as a political figure to reckon with during that runaway inflation.

The author uses examples from the Roman Empire, Chinese Dynasties, as well as current European and Asian policies. Overspending is not a good policy in the long term.

http://www.forbes.com/sites/jimpowel...ding-too-much/