debt wrecking ballThe Greeks have thumbed their collective nose at the EU leaders. They are tired of being kicked around and by golly, they aren’t going to take it anymore! The word tantrum comes to mind, but since they are mostly adults—why would any young people stay in Greece?—and they have the right to vote, that might not be entirely accurate.

As I noticed a few weeks ago and tweeted (@rcfinke), the Greek total economy produced an output of $237.5B in 2014 according to Trading Economics. This compares to $284.4B for the State of Missouri according to the St. Louis Federal Reserve Bank. It is however, greater than that of Kansas, $147B.

The real problem is that Greece has declined from a high of $354.6 in 2009 ($318.6 in 2008) while Missouri’s output has grown by almost 14 percent since 2008. The per capital figure has dropped from $24,148 in 2009 to $18,377 last year. Their standard of living has dropped by almost 24 percent in six years. I would be pretty upset about that as well in that situation.

But as sometimes happens, unfortunately the voters have blamed their creditors, primarily the banks of Germany and the rest of the mainland of Europe, instead of their own government and themselves for their lousy predicament. My favorite financial firm economists, Brian Wesbury and Robert Stein, of First Trust Portfolios L.P. posted some thoughts Monday, July 6th, about the causes.

They note that when Greece joined the EU in 2001, it had a wonderful opportunity to prosper. The interest rates on its debt fell and the economy improved. The government could have used interest savings and higher revenues to reduce its debt load and the cost of its featherbedded bureaucracy. But instead, it gave even more liberal benefits to the populace and counted on the creditor gravy train to keep chugging along.

When 2008 came along—and bad times are guaranteed to occur—the wheels fell off and the country’s health has worsened for six years. On a personal level, I made a similar mistake, having too much mortgage and other debt in 1987 when the stock market hiccupped. My income decreased for a year or two. I was young and thought the trees would grow to the sky, I suppose.

One thing I did not do was to blame my lenders for extending credit to me. I was the one who signed on the dotted line and promised to pay it all back, no matter what. I was the one my dear wife was trusting to maintain a healthy balance between debt, equity, revenue and expense.

Guess what? Nations are no different than individual families. The US Federal Reserve can print money, but it can’t guarantee that a people will work hard, save and invest money in productive enterprises, pay their taxes, and make honorable lives for themselves. Europe and the rest of the world will recover from having lent to deadbeat Greece, but the Greeks are suffering and will suffer for decades to come. There will likely be no short term contagion for us.

But do not be misled. We are on the same path and have squandered the same opportunities to pay down our debt in good times. We will suffer the same fate if we choose more leaders who lie to us and promise to keep borrowing our way into prosperity.

But hope springs eternal. Even I woke up, smelled the coffee, worked hard, and changed my evil ways. It only took about 20 years to recover.

(Past performance is no guarantee of future results. Advice is intended to be general in nature. First Trust info can be found at http://www.ftportfolios.com/retail/blogs/economics/index.aspx.)