Last week, the finacial daily newspaper in UK, Fiancial Times ran a series of articles titled 'Capitalism in Crisis'. There were lot of good articles from eminent persons, inlcuding Alan Greenspan.
I did enjoy their insights but for me this whole series sounded more like an obituary to welfare state rather than an analysis of current state of the soverign debt issue.
Majority of the western nations have been living beyond their means for a long time. They have been borrowing money and printing money to unsustainable levels. They had balance sheets with of mountains of debt even before the credit crunch. For many nations, the problem only got exasperated by the credit crunch episode.
The austerity measures that these countries have started, is just the beginning. Its the beginning of the end of the welfare state.
In my opinion, the western nations should rethink their concepts of a welfare state not only due to question of affordability but also look into its relevance today. Their welfare state model was created when half the world was under the communism. It's not relevant anymore.
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