Editor's note.

• Author: Dorn, J.A.

We are grateful to the Harry and Lynde Bradley Foundation and the Carthage Foundation whose support of the October 2012 Cato Conference "Europe's Crisis and the Welfare State: Lessons for the United States" made possible this special issue of the Cato Journal.

The heavy debt burdens of Greece and other European welfare states are the result of profligate entitlement spending and a lack of fiscal discipline. Both explicit debt and massive unfunded liabilities in pay-as-you-go social welfare programs must be resolved if Europe is to achieve long-run prosperity.

When people become accustomed to welfare and form an entitlement mentality, there is an ever-growing demand for more benefits, resulting in higher taxes and slower growth. When the debt burden becomes unsustainable, as in Greece, present beneficiaries will take to the streets and exert political pressure to maintain the status quo. The social and economic disruption is evident.

The United States is facing its own debt problem, driven by the rising costs of Social Security...