Greece and too many other countries have been trying to defy gravity by living the good life on borrowed money. In 2001, the Greeks entered the eurozone, which gave them access to low-rate loans under the pretense that Greece was richer than it was. The seeds of the destruction that resulted in the closure of the banks this week were planted the day the Greeks adopted the euro. None of this should have been a surprise to anyone. The only thing for certain is that the Greeks will now suffer another major drop in their real incomes. The open question is will the Europeans, the Americans, the Japanese and others who also have been living on borrowed money, growing at unsustainable rates, learn the lessons from the latest Greek tragedy, or will they too march off the cliff?

America's Greece is Puerto Rico.  Like Greece, the Puerto Rican government has more debt than it can service, and some are calling for a bailout by U.S. taxpayers. The major Puerto Rican state-owned or controlled enterprises are all losing money, including the power authority which is insolvent. Puerto Rico is an American territory that was acquired from Spain in 1898 during the Spanish-American War. The island has a population of about 3.6 million, which is declining as many Puerto Ricans emigrate to the U.S. mainland or elsewhere because of the continuing economic stagnation. Hong Kong was a small British territory, with the British legal system but no self-government. Yet, it has become rich -- having more than twice the per capita income of the average American -- without receiving aid and subsidies from Britain which the United States has and continues to provide to Puerto Rico. The operative question is why has Hong Kong become so much more successful than Puerto Rico?

San Pedro, Ambergris Caye, Belize. The world financial and debt crisis can, at times, be better understood by looking at a small entity that is suffering from the same diseases as the major countries. The small Central American-Caribbean nation of Belize (the former British Honduras, so it's English-speaking) is, in many ways, a microcosm of Europe and the United States in that its debt has grown to a level where it cannot be serviced without doing great damage to the rest of its economy. Also, the courts in Belize, like those in the U.S., give too much deference to government, which is undermining civil liberties, the rule of law and property rights. All too many judges succumb to the pressures of the political branches of government. I am here in Belize to discuss with representatives of the government and business community changes in policy that should lead to higher rates of economic growth.  They are in a very deep hole,  There's only one way to get out of it for real.

If enough people have a demand for a particular product, whether it is prostitution, gambling, drugs and alcohol, or an anonymous, instantaneous and low-cost money transfer, it will be supplied. The big issue at the moment is money transfer. Governments want to know both the source of everyone's money and how it is spent in order to collect more taxes, regulate behavior, reduce certain types of criminality and increase political control. The IRS and other government agencies claim that all of the financial information they collect is strictly confidential -- which is a laughable claim in an age when Lois Lerner, Edward Snowden and all of those Chinese and Russian hackers flout the rules. As the government has become more and more intrusive in the financial affairs of individuals and businesses, the incentives for those who can develop ways to either legally or illegally get around the increasingly costly and abusive regulations has grown. This dynamic promises to create alternative private currencies that will make government currencies obsolete.

Assume your government job is to write regulations to require bicycle manufacturers to make safer bicycles. You know two things. The first is that if you say bicycles are being made about as safely as they can be, then you will no longer be needed; hence, no job. Second, you know there were no U.S. commercial airline fatalities in the U.S. in 2010 (an amazing and true fact) while about 1,000 people died in bicycle accidents in 2010. Thus, as long as you argue that riding a bicycle should be made as safe as flying in an airplane and that tougher regulations on bicycle manufacturers could make bike-riding safer, you can keep your job. President Obama jumped on the regulatory-reform bandwagon last week after two years of greatly expanding costly regulations and reducing personal liberty, particularly on health care and financial services. I confidently predict his new initiative will be a failure. History has shown that the vested interest of the regulators in job preservation and expansion almost always swamps efforts at regulatory reform.

Of those running for president, who will give this speech?

"Ladies and Gentlemen, my administration will implement a series of economic policies to cause the economy to grow at an average rate of 4 percent or more a year. Growth of 4 percent-plus per year will create jobs at a faster rate than the growth in the labor force and provide hope for those who had despaired of finding a good job again. At a growth rate of a little over 4 percent per year, real incomes for all of our citizens will double in only 17 years. At the current rate of economic growth of a little over 2 percent a year, it will take more than 30 years for real incomes to double. We can do better -- and we have done better in our recent past.  Here's how we'll do it.

If taxpayers suddenly stopped subsidizing Amtrak, what do you think would happen? Before trying to answer that question, it is useful to review U.S. railroad history. The first railroads were built in the United States in the late 1820s, and by 1900, only 70 years later, almost every town in the country had rail access. Railroads were high tech, the Internet of their time. The system was built and profitably operated by private companies. Amtrak and the modern freight railroad companies use the infrastructure that was built long ago. The 180-year-old privately built Canton Viaduct (an incredible stone bridge - see link) in Canton, Massachusetts and the 100-year-old Hell Gate Bridge (the model for the Sydney Harbor Bridge in Australia) over the East River in New York are still used by Amtrak. The investor-owned Pennsylvania Railroad built the hugely expensive North River Tunnels under the Hudson River in 1904-1908, which were technological wonders of the time. They are still used by all of those who ride Amtrak from New Jersey to New York. In this context, it's rather ironic when President Obama claimed that private business only succeeded by using government infrastructure --  "You did not build that" -- when, in fact, government mostly uses privately built infrastructure.

Stockholm, Sweden. Last week, there were reports in the Swedish and Finnish press about what was presumed to be a Russia submarine probing the harbors in both Stockholm and Helsinki. This was not viewed as a serious Russian threat but merely an extension of the general and low-level harassment the Russians have displayed against their European Union neighbors, particularly the Baltic nations. The European Union is not the first free-trade and defense bloc to arise in Europe. Six hundred years ago, the Hanseatic League held both economic and military sway in an area that at its farthest extent went from Novgorod in northern Russia to trade zones near London. The league was centered in the German city of Lubeck on the Baltic. Members of the league included towns and cities in modern-day Germany, Denmark, Poland, Lithuania, Russia, Finland, Sweden, the Netherlands and Belgium. The Hanseatic League established free trade among its members, who agreed to a basic charter. It also established its own navy and defense force to protect its cargos, and it succeeded in largely eliminating pirates from the Baltic.  The EU had better morph NATO into a modern version of the League to protect itself from Putin's Pirates today.

Geneva, Switzerland.  What is the happiest place? Last week (4/23) in its annual World Happiness Report, the United Nations reported that Switzerland was No. 1. The United States ranked No. 15, and the African country of Togo came in last, at number 158. (Scroll down to Figure 2.2 for the ranked list.) Switzerland is arguably the world's most successful country -- and most improbably so. It is landlocked and without much in the way of natural resources. It has four official languages, many different religious groups, and is surrounded by warring neighbors. Yet, it has remained an island of peace and prosperity. The modern Swiss federal state goes back to 1848, when a federal constitution was adopted, giving the central government responsibility for defense, trade and legal matters. All other government matters were left to the cantons and the communes (i.e., cities and towns). The U.S. Constitution, which is more than a half-century older than the Swiss, also greatly limited the powers of the central government -- but unlike the Swiss, there has been a centralization of power in the capital at the expense of the states and local governments. How did the Swiss do it?

This past week, the International Monetary Fund again lowered its global economic forecast for 2015. The Federal Reserve had forecast the U.S. economy to grow about 4 percent near the beginning of each year for the last five years. But during each year, the Fed was forced to reduce its forecast until it got to the actual number of approximately 2 percent. Other government agencies have been making equally bad forecasts. These mammoth errors clearly show that the forecast models the official agencies use are mis-specified and contain incorrect assumptions. Government economic policymakers have been trying to solve a problem of too much government spending, taxing and regulation by inappropriately using monetary policy, which has not and cannot solve the fundamental problems. It is like using a hammer rather than a shovel to dig a hole. There is only one non-destructive solution to the global econoomy's woes.

Abolish the Internal Revenue Service? IRS Commissioner John Koskinen has said the government must have an IRS to collect the taxes to fund the government. Mr. Koskinen is right that no matter what kind of tax system we have, there needs to be a tax collection bureau. But those in favor of abolishing the present IRS are correct in that the United States certainly can get along perfectly well without the politicized, abusive and rights-trampling tax agency the IRS has become. There is simply no excuse for much of what the IRS does. IRS agents complain that nobody likes them and they are shunned when they go to parties. Count me as one who is not sympathetic. Some IRS workers claim they are there for patriotic reasons because someone has to raise the revenue to keep the government going.  Here's a question to ask them: What if IRS agents went on strike - as real patriots - to demand that the monies they collect would no longer be used for political payoffs, mismanaged programs and unconstitutional activities?

Last week, the Obama Justice Department declined to press charges against former Internal Revenue Service official Lois Lerner -- even though there was overwhelming evidence that she had targeted conservative groups and may have been complicit in destroying her emails. She also waived her Fifth Amendment privilege by proclaiming her innocence before a congressional committee and then refused to answer questions. It is possible that for some unknown reason Ms. Lerner's case should have been dropped, but to many it appeared that once again President Obama and Attorney General Eric Holder were applying the rule of law selectively. The rule of law breaks down when those charged with enforcing the law are, in fact, violators of it. Politicians have increasingly exempted and declined to prosecute themselves and other government employees for violations of the law that apply to the rest of us. How do we get them to obey their own laws? Here are two ways.

Do you think the government should be able to seize your property if you have not been convicted of any crime? Most people are not aware that one of the most odious activities of federal, state and local tax and police authorities is that of "asset forfeiture." Asset forfeiture laws allow law enforcement to seize and keep property of individuals and businesses without a criminal conviction. The practice has been rife with abuse by law enforcement officials, often using seized property of innocent individuals for their own use. As a result of the outcries about the abuse, there was a unanimous vote by both Republicans and Democrats in the House and Senate in New Mexico to end the practice of civil asset forfeiture in the state. The bill now awaits the signature of Gov. Susana Martinez. Former federal prosecutor and director of the Justice Department's Asset Forfeiture Office, Brad Cates, now a resident of New Mexico, is one of the leading advocates of repeal of asset forfeiture laws at both the state and federal levels. Mr. Cates and the first director of the federal Asset Forfeiture Office, Judge John Yoder, in an article in The Washington Post last September, wrote: "We find it particularly painful to watch as the heavy hand of government goes amok. The program began with good intentions but now, having failed in both purpose and execution, it should be abolished." President Obama's nominee for attorney general, Loretta Lynch, the current U.S. attorney for the Eastern District of New York, strongly defended civil asset forfeiture during her Senate confirmation hearings, despite major abuses by her own office. This may now be jeopardizing her confirmation.

How would you feel if you had to have bodyguards anytime you moved about — not because you were a voluntary celebrity, such as a presidential candidate or movie star, but merely because you exercised your free speech right by publishing cartoons that some found offensive? Danish journalist Flemming Rose published cartoons of Muhammad in the Danish newspaper Jyllands-Posten back in 2006, which led to many violent riots by Moslems around the world. He has written a book, “The Tyranny of Silence: How One Cartoon Ignited a Global Debate on the Future of Free Speech” (the English edition was just published by the Cato Institute Press). Mr. Rose, rather than hiding, even though a fatwa has been leveled against him calling for his death, has traveled and spoken widely in his unrelenting advocacy of free speech and against the tyranny of silence. He has argued that “the lesson from the Cold War is: If you give in to totalitarian impulses once, new demands follow.  The time is now to shut down Islamic Terrorism's financial network.

There are decades of stories about corporations, movie actors, artists and politicians hiding money from the taxman. Many economic studies have shown that once tax rates exceed 20 percent, most people will start thinking about and then acting in legal or illegal ways to avoid the tax bill. The reason there is so little remorse about tax avoidance and evasion is that virtually everyone knows that much of what government does is a ripoff. If people really believed that "government is underresourced" and spends its money wisely, they would not take legal charitable and other deductions when they file their income taxes. The president's buddy, Al Sharpton, is welcome at the White House almost any time, even though the Internal Revenue Service reportedly claims he owes millions in unpaid taxes.  If Mr. Sharpton had robbed a supermarket of a mere $10,000, it is unlikely he would be welcome at the White House. The message is obvious. The government even tells us that federal employees, including thousands at the IRS, owe billions in back taxes, yet little is done. At the same time IRS leaders have the unmitigated gall to demand larger budgets. Every thinking person implicitly knows that the U.S. government is the world's biggest financial fraudster.  Here's what to do about it.

What do you think was the primary cause of the Great Recession -- too little government regulation ,or dictates by the government to banks and other mortgage lenders, requiring them to lend to the unqualified? Peter J. Wallison, former general counsel of the U.S. Treasury Department and White House counsel to President Reagan, who was also a member of the congressionally authorized Financial Crisis Inquiry Commission, has just published a book, "Hidden in Plain Sight," in which he clearly documents what caused the financial crisis and why it is likely to happen again. For this act of detailed scholarship and truth-telling, he has come under fierce attack by many of those who were, in part, responsible for the crisis.  Mr. Wallison is a problem for the political class, much like the boy who said the emperor had no clothes. He cannot be dismissed as a know-nothing lightweight. So his character must be impugned since the facts are on his side.  The Great Recession was a crime, and its perps do not like being exposed.

Which country has the biggest interest in stopping the expansion of the oil and gas industry in Europe and North America? Answer: the Russian Federation is highly dependent -- to the tune of several hundred billion dollars -- on the export of these commodities, particularly to Europe. It is rational, then, for the Russians to spend upward of a few hundred million dollars to influence politicians to stop gas and oil projects in those countries, with the goal of limiting supply, and thus protecting the Russian revenue stream. Researchers at the Environmental Policy Alliance, however, have just produced a very solid, well-documented report, which shows how tens of millions of dollars from Russian interests apparently flowed from a dark company in Bermuda through opaque environmental bundlers, such as the Sea Change Foundation, into major environmental lobbying organizations, including the Sierra Club, the Natural Resources Defense Council and the League of Conservation Voters. There have been a number of press stories during the past week on Russian support of American environmental groups, including a very detailed description of the money flows, by Lachlan Markay of the Washington Free Beacon.  In truth, these reports just scratch the surface of the Kremlin bribery operation paying off not just enviro groups but White House people as well.

If you were a librarian, would you put President Obama's recently delivered State of the Union address in the fiction or nonfiction section? All presidents puff their accomplishments and gloss over their failures, but no previous president has been so blatant in just making up "facts" and numbers that are so disconnected from reality. The Islamic State (which is also called ISIS or ISIL) is gaining territory, yet the president said we are "stopping ISIL's advance." He said, "We're upholding the principle that bigger nations can't bully the small, by opposing Russian aggression." In the year since his last State of Union address, Russia has grabbed Crimea, taken control of part of Eastern Ukraine, and continues to take more territory in Ukraine. If this is success, what would failure look like? The president's description of the economy was also a trip through Fantasy Land.

People are more free and prosperous as a result of the work of Gary Becker, John Blundell, Leonard Liggio, Gordon Tullock and Henry Manne, all of whom passed away during the last eight months. Henry Manne, dean emeritus of the George Mason University Law School, and one of the founders of the field of law and economics, died this past Saturday (1/17), at age 86. Most lawyers know little about economics, and as a result, many judges make unnecessarily harmful decisions. Dr. Manne, who was both a lawyer and an economist, had been influenced by the work of Ronald Coase and Aaron Director (who had been professors of his at the University of Chicago Law School) and by economists Milton Friedman, Armen Alchian and others. Henry Manne's impact will remain for generations, not only from his own writings, but from the influence he had on his students and others that he mentored (including yours truly), and the fact that courses in law and economics are now taught in many law schools. In May 2014, one of the true economic giants, Gary Becker, at age 83 left us. Becker had made important contributions to our understanding of the motivations for discrimination, crime and drug addiction. He was always a pleasure to be with because of his many original insights into human behavior.  Awarded the Nobel Prize in Economic Sciences in 1992, his mentor Milton Friedman (Nobel Laureate in 1976), said that Gary Becker was the best student he ever had.

Grand Cayman, Cayman Islands. Cayman is prosperous, in part, because of a great global lie, which causes many big rich nations to pursue bad economic policies. The global lie is that the developed countries have too little government, rather than too much. The simple and obvious empirical fact that most developing and developed countries with smaller government sectors have grown faster in recent decades than those countries with big government sectors is ignored both by the politicians and many in the media. The political classes in these big government countries, rather than taking responsibility for their own misguided policies, look for scapegoats. Their favorite scapegoats are high-growth countries with low tax rates on savings and investment. They blame offshore financial centers like Cayman, Hong Kong, Bermuda, and even mid-sized countries like Switzerland for engaging in "unfair tax competition." The truth behind the great global "tax haven" lie is that offshore financial centers owe their prosperity to tax transparency, not tax evasion.