We think wrong if we think governments are immune to the same economic forces that shape our lives. When any of us have too little income chasing too many bills, we cut back, work second jobs or borrow to make ends meet. But when that is not enough and we either can’t borrow anymore or the cost of borrowing is too great, we go bankrupt. It’s the same with governments. The difference is government can postpone belt tightening by hiding debt longer, issuing IOUs called bonds and by printing more money. In the end, however, that drives the value of the money down, the prices we pay for goods and services goes up, borrowing gets more difficult and government has to cut back on its services anyway. The price of gas is an example of the first. Greece is an example of the last. Governments can delay the impact of economic realities, but they can’t escape them. Neither can any of us.
There is a time for politics and a time for governing. The time for politics is over the time for governing is upon us.