This is the Cato Daily Podcast for Friday, May 21st, 2010.

I'm Caleb Brown.

What can U.S. states and the feds do to avoid being the next Greece?

Jeffrey Myron, senior fellow at the Cato Institute and author of the new book

Libertarianism from A to Z, offers a few bits of advice.

For Greece to have avoided the problems, it would have had to have made different decisions going

back decades because policies have been in place for a long time that created tons of civil service

employment, to create generous health and retirement benefits that are very

protective of various industries that generally promote an inefficient

economy so high expenditure a tax system that's very badly run that has incredible incentives for people to

cheat a huge amount of non-productive employment in the public sector and lots of

rules that make the private sector inefficient.

Well, you're guaranteed.

You're not going to produce a lot of GDP.

You have a ton of expenditure and no tax revenue,

which you're going to have big budget deficits

and a huge debt.

So that's exactly what's happened.

So they would have needed to behave

differently for decades in order to have avoided this. It's been the cake has been in

the oven for quite some time. The defense then that could be offered for Greece

is well then they couldn't have seen this coming.

...