The Ant and the Grasshopper: A European Tale
In Aesop's fable of the ant and the grasshopper, the ant toils the summer away making sure he has enough stores to take care of himself (and probably others) during the coming winter months. At the same time, the grasshopper took a trip to Cancun, went to the water park everyday, and such fun stuff. When it came wintertime, the ant lived in comfort. But it wasn't very long until the grasshopper came knocking at his door.
The moral of the story is that everyone who is capable should plan for their future and for the future of those who are less able. The grasshopper was perfectly capable of doing this, but he instead enjoyed living in the lap of lasciviousness. That first winter, I'll guess that the ant had compassion on the grasshopper. But the following winter, I'll bet not so much.
There are a few countries in our world today who act like grasshoppers. In his Op-Ed yesterday, Thomas Friedman identified some:
Let’s start with Europe. Portugal, Italy, Greece, and Spain [the PIGS countries] all enjoyed a “German dividend.” That is, they enjoyed German-level interest rates as members of the euro zone, even though they were not as productive or disciplined as German savers and workers. Instead of using that dividend to modernize their economies and make themselves more competitive and productive, they went on real estate or consumption binges that have badly weakened either their banks or national balance sheets. Now there is no more escaping the bill.
The ant--in this case Germany--is starting to tire of bailing out the grasshoppers on a regular basis.
Chancellor Angela Merkel of Germany decried this “missed opportunity” to overhaul their economies... The lower borrowing rates that came with the introduction of the euro meant “countries like Italy became virtually on a par with Germany in terms of interest rates,” she said. “The freedom created by this situation wasn’t exploited to improve long-term competitiveness. Instead, the time was used to spend too much money in consumption...
The moral of today's version of the story? Welfare doesn't work very well for lazy people, and it doesn't work too great for lazy countries, either.