John, in a comment at Right Punditry.wordpress.com, said, “Point I can’t get a liberal to answer … give me one example where socialist policies have not eventually driven that country into bankruptcy.”
My answer was China. However, when I attempted to leave a longer comment with more evidence with linked citations, this right-wing political site seems to have limited the number of words one may use in a comment.
What I have discovered over time is that most far-right conservatives spout opinions supported by emotion and malarkey. To respond to these emotional rants usually requires longer comments and/or posts. It is easy to claim anything without facts and much more difficult and time consuming to respond with logic and facts to reveal the truth.
After a few days, it occurred to me that there must be a history of countries going bankrupt and the reasons that led to those financial collapses, so I used Google.
First, I found a list of ten countries that went bankrupt at Bill Shrink.com, but could not find one on the list that failed due to socialist policies. In fact, the evidence indicates that the primary reason a country goes bankrupt is usually unbridled, unrestricted capitalism and greed.
When the private sector is given too much freedom from government oversight to make money, greed and risk taking overrules common sense.
From BillShrink.com I learned that in 2001, Argentina’s bankruptcy was caused by a run on its banks followed by a collapse of the country’s national currency.
In 2008, Iceland was a casualty of America’s 2007 global financial crisis. The value of Iceland’s currency dropped so low that it wasn’t worth enough to pay for imports on which the country is heavily dependent.
Another reason for countries going bankrupt is too many expensive wars. Germany went bankrupt in 1920 and 1945 as a result of losing World War I and World War II.
In addition, Great Britain faced bankruptcy in 1945 as a result of fighting World War II. So ravaged was the British economy following the war that almost all national resources were dedicated to paying war debts for five full years after its completion. On another site, I learned that the last payment on that World War II debt was made in 2008.
That caused me to consider that the US has spent more than $40 Trillion on defense since the end of World War II but less than $10 Trillion on socialist welfare programs, and America funded the wars in Iraq and Afghanistan with borrowed money.
Such stories are sobering reminders that national bankruptcy is very real, and has happened repeatedly throughout history to nations that fail to take proper precautions. The origin of socialist policies started with the French Revolution of 1789. Then the Communist Manifesto was written by Karl Marx and Friedrich Engels in 1848. In the last third of the 19th century, social democratic parties emerged in Europe and started to push socialist policies.
In fact, Common Dreams.org reports that the three happiest countries in the world for quality of life are Social Democracies: Denmark, Finland and the Netherlands, ranked 1st, 2nd and 3rd, respectively. Two other Social Democracies ranked 6th and 8th: Canada and New Zealand. The U.S. didn’t make the top 10 list. http://www.commondreams.org/further/2009/05/11/worlds-happiest-countries-social-democracies
However Spain went bankrupt seven times in the 19th century. In addition, France has become insolvent eight times between 1500 and 1800. Ecuador has gone bankrupt six times since 1830.
From another site, I learned more details about why a few of these countries went bankrupt.
Futurist Speaker.com says, “In Argentina’s case in 2001, wealthy people took their money and fled the country. Over $40 billion left the country in one single night. This resulted in a run on the banks, followed by a collapse of the country’s national currency. Argentina’s citizens were so desperate, many panicked that many spent nights sleeping in front of the automated teller machines.
“Iceland, a tiny country with just under 320,000 residents, was the first domino to fall in the 2008 global financial meltdown, when its banks defaulted on $85 billion.
“Iceland was hit harder by the crisis than many other countries because of its inflated banking system. In just five years, the banks went from being almost entirely domestic lenders to major international financial intermediaries.
“Unbeknownst to most of the population, the country basically turned itself into a massive hedge fund. The whole nation was caught up in a web of deception.
“Spain, once one of Europe’s economic superstars, rose to the top largely through real estate speculation and its growing assimilation with the rest of the EU.”
Again, socialist policies are not mentioned as the cause of these bankruptcies. Instead, it seems that the cause is unbridled, unrestricted capitalism—the same policies the GOP promoted in 1999 that led to the 2007 global financial crises, and the same policies that brought on The Great Depression of 1929.
Historically, wars and unbridled capitalism causes national bankruptcies—not socialist policies, not yet anyway. In fact, socialist policies are a way to avoid rebellions such as the French, Russian and Chinese rebellions and civil wars. With socialist policies, we avoid the poor from suffering to the point of an uprising due to suffering and anger.
The United States could learn from history to avoid a national bankruptcy. For example: Republican President Herbert Hoover refused to use socialist policies during the Great Depression. “(He) did not think the federal government should offer relief to the poverty-stricken population. (Instead, he focused) on a trickle-down economic program to help finance businesses and banks” … When Hoover asked the CEO’s of large private sector businesses and banks to help the unemployed and poor, he met resistance, because the private sector believed the way to solve the Great Depression was to fire workers. “Hoover was widely ridiculed: an empty pocket turned inside out was called a “Hoover flag;” the decrepit shantytowns springing up around the country were called “Hoovervilles.” Source: PBS.org
Studies have estimated that thanks to Herbert Hoover refusing to use socialist policies to feed the unemployed/poor that more than seven-million Americans died of starvation during the Great Depression. Source: Infowars.com
Today, thanks to socialist policies known as welfare, few starve to death in the US. The cost to feed unemployed and poor Americans for 2012 was $113.5 billion. The average monthly food stamp benefit per participant in the US is $133.84. The budget for unemployment is $109 billion. The cost of Defense is $902 billion. Source: US Government Spending.com and State Health Facts.org
The national average for unemployment benefits in the US was $293 per week according to the MSN Money website. That’s 35 percent of an average salary in America reports USA Today. Then Bloomberg reported that almost 2,400 millionaires collected unemployment benefits of the 11.3 million Americans that collected unemployment in 2009.
Lloyd Lofthouse is a former U.S. Marine and Vietnam Veteran,
who taught in the public schools for thirty years (1975 – 2005).
His third book is Crazy is Normal, a classroom exposé, a memoir. “Lofthouse presents us with grungy classrooms, kids who don’t want to be in school, and the consequences of growing up in a hardscrabble world. While some parents support his efforts, many sabotage them—and isolated administrators make the work of Lofthouse and his peers even more difficult.” – Bruce Reeves
Lofthouse’s first novel was the award winning historical fiction My Splendid Concubine [3rd edition]. His second novel was the award winning thriller Running with the Enemy. His short story A Night at the “Well of Purity” was named a finalist of the 2007 Chicago Literary Awards. His wife is Anchee Min, the international, best-selling, award winning author of Red Azalea, a New York Times Notable Book of the Year (1992).
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