The financial implosion of Greece is half a world away. But its reckoning should ring eerily familiar to a Detroit freed from bankruptcy and a Wayne County working to avoid it.

The connection: too many leaders in too many places made too many promises they could not keep — and assumed, wrongly, that they could continue to use other people's money to do it. There's always some banker or quasi-governmental organization somewhere eager to make risky loans to poorly run governments, right?

Wrong. Worse, too many average people are buying the dodge, figuring the alternatives will upset a status quo they know and embrace, however manifestly unsustainable it is. These are the same government employees and pensioners, taxpayers and average folks, who blame others and often end up paying for the deception, dearly.

Look at the Greeks draining ATMs, even as they rail at imperious German-speaking barons of the European Union. Remember the Detroit retirees, forced to choose between a "grand bargain" they didn't necessarily trust and an alternative they could not foresee. Consider Wayne County employees, their pension funds essentially raided by a former county executive who sweetened early retirement offers for his appointees with dollars earmarked for county workers' golden years.

Failure is widespread in each case, but none more so than the failure of leadership. From Athens to Puerto Rico to Detroit, leaders failed to reckon with financial reality, to acknowledge the limits of government largesse fueled by taxpayers and the private sector, to communicate clearly with real people before it was too late.

In each case, and more, expectations of entitlement expanded beyond the capacity of government to satisfy them. In the private sector, with the arguable exception of collective bargaining agreements, executives can say "no," keep their jobs and employees can vote with their feet; in the public sector, "no" carries a higher price than many leaders can bear to risk.

Sooner or later, to roughly paraphrase former British Prime Minister Margaret Thatcher, you run out of other people's money. They did in Detroit, prompting the largest municipal bankruptcy in American history. They are in Puerto Rico and Greece, imperiling its place in the so-called "eurozone," and they're threatening to in Wayne County.

Chicago and Illinois are fiscal basket cases, both burdened with massive pension obligations. Spain, Portugal, Italy and Ireland, charter members of the so-called PIIGS, are climbing out of their respective financial holes. Should the EU cash cabal buckle to Greek demands for debt write-offs, the others are likely to clamor for them, too, softening unpopular reforms of budgets, pensions and labor markets.

The details are different, but many of the underlying causes are similar. Bloated public sectors promise comparatively rich entitlements, including pensions at an early age, that recipients gladly accept; leaders maintain the status quo to retain their office and power; levied taxes go unpaid, from income taxes in Athens to property taxes in Detroit; public corruption and fraud are widespread and tolerated; business is considered less an economic engine and more a government revenue source.

Powerful lobbies invested in perpetuating the present — unions and the civil service, bankers and bondholders reaping large yields off their risky lending, pensioners and taxpayers who don't want to pay more or lose more, even nations conjuring historic enmities — have short-term incentives to block change. Long-term? Not so much.

I know: you don't want to hear it. Not when "the banks" can be blamed. Or a corrupt mayor serving time in federal prison. Or an inept county executive and an equally inept county commission. Or a Republican governor with the audacity to embrace financial reality. Or a German government obsessed with fiscal rectitude and its aversion to moral hazard.

News flash: democratic choices have consequences, and every transaction has two sides. Banks and bondholders lend because there's demand for their cash. Whether it's a couple that wants a mortgage, or a Kwame Kilpatrick who needs $1.5 billion to make a pension fund payment, or a Greek government scrambling for more euros to make an interest payment, the aim is the same: find someone to do the deal.

Too often, they can and do. Detroit did; Greece did; Puerto Rico did; Wayne County did — and all are paying the price in ways it would have been difficult to conjure just a few short years ago. They ignored the scolds, instead becoming examples of what could be for just about everyone else.

(313) 222-2106

Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at

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