Greece: Being a “Developed Nation” Doesn’t Matter

I wouldn’t have noticed this story in USA Today about Greece, except that Drudge linked to it with the following headline: “First developed nation to default on international obligations…

I did not find that line in the story. But I did find the following paragraph:

After the deadline passed (at 6 pm ET), Greece joined Zimbabwe, Sudan and Somalia in being in arrears to the IMF. Fitch Ratings has downgraded Greece’s government debt further into junk territory.

There is no exceptionalism, people!

I’m sure a few Greeks who follow the international news assumed, when they heard about Zimbabwe, or Sudan, or Somalia, thought that it didn’t matter. Those countries are “undeveloped” (the modern code word for “backward,” “backwater,” or “uncivilized”). We are special—the cradle of Western Civilization (allegedly; I think Palestine deserves that credit).

“It can’t happen here.”

But yes it can.

And it will, not just in Greece. It can happen in Spain and almost certainly will. It can happen in Portugal and in Italy.

It can happen everywhere.

And it is in the process of happening in Puerto Rico. It is happening in Detroit. And it will soon begin happening in other cities and/or states in the U.S.

We’re not immune. We’re not special. We can go bankrupt and we will.

Believing that we are “exceptional” does nothing for us except blind us to the doom we are headed for. Only if we manage to do really exceptional things like massively cut spending and bring our entire budget down to a lower number than our revenues can being “exceptional” matter.

But that’s not the way the slogan works. It doesn’t provoke us to defy history and act to save the country. It promotes sloth and complacency instead. It is as if we are aboard the Titanic saying, “Nothing could sink this boat.”

When the water fills the ballroom you will realize you should have listened to the people called “fiscal conservatives” and “free market economists.”

But it will be too late.

I remember reading about Russia’s default in the late nineties. The mantra back then to get people to loan money to that country despite the obvious problems was, “No nuclear power has ever defaulted.” That was recited as if it were a reliable law of nature and not just a random historical fact. There’s a first time for everything.

I’m sure a few years ago someone was selling Greek bonds to some fool by saying, “No developed European nation has ever defaulted.”

It was irrelevant. There is no exceptionalism if we don’t act exceptional.

We can all be Somalia. We are already in line.