The point of no return by Richard von Mises is worth reading: "A state becomes almost unreformable when the majority of the population is financially or structurally dependent on the state (state employees, civil servants, recipients of subsidies, grants, or transfer payments, etc.). As soon as those who net benefit from or are supported by the state outnumber those who do not, the system blocks reforms, since the majority votes out of self-interest for the preservation or expansion of state services." Does this sound familiar? Some European countries, France, Belgium, Finland are already way beyond that point, closely followed by Germany, Spain, Austria and Italy. It works for a while, as long as markets buy more sovereign debt at reasonable interest rates. The party ends when they stop though. For France, they stopped this month, Belgium will be next. The longer the socialist illusion persists, the more painful the inevitable cuts and adjustments will be. It’s pure arithmetic. Good luck Europe, good luck Euro. Buckle up, it won’t be pretty.

Isn’t this chart really telling? Within just one generation, Poland moved from one of the poorest countries in Europe, devastated by 40 years of socialism, to Europe’s growth champion, with life satisfaction much higher than in other European countries. Is it really surprising that Poles are so happy? Poland has had the fastest growth rate in Europe for decades and still grows fast. There is basically no unemployment, and Poland is one of the safest countries in Europe. So how did Poland get there? 1. Poles remember the socialist poverty and misery and don’t believe the left narratives destroying so many European societies and economies. They understand that one needs to work hard for a better life. 2. Poles are extremely entrepreneurial. While young people in Germany or France choose government “jobs,” many young Poles start a business. The state helps them, it is easy to start and run a business, most government services are digitized, and taxes are reasonable. Poland understands that fair taxes drive progress, innovation, and job creation. It values entrepreneurship and doesn’t punish it with high taxes. 3. Poland protects its borders. Contrary to other countries, it doesn’t allow illegal immigrants to apply for asylum and consequently deports criminals. It doesn’t offer lifelong welfare, people who want to work and contribute are welcome. Those who want to drain society and stay on welfare benefits forever choose the UK or Germany over Poland. 4. EU membership has been a turbocharger. Implementing Western legal standards, fighting corruption, and smart use of EU infrastructure funds helped a lot. Contrary to the naive narrative, it is not a subsidies story though. Many other countries, including some Western European ones, receive higher EU subsidies per capita or as a percentage of GDP. Poland did many things right, the opposite of the destructive left path many European countries follow at the moment. No wonder Poles are happier than others. Yet, two things must be addressed for the Polish success story to continue. First, the demographic problem. Housing in large cities must become more affordable for young people. Immigration and Poles returning from emigration help, but more needs to be done to increase the births rate again. Second, the Polish fiscal deficit is too high, public spending as a percentage of GDP is getting close to 50%. With weak demographics, Poland can no longer afford one of the lowest retirement ages in Europe. Poles are smart, these issues will be fixed. If you have not been to Poland, consider a trip. It’s so refreshing compared to the slow but steady decay of some other European countries.