Greece is the word . . .  for deadbeat.

While it’s a universal truth that people will act in their own self-interest, Greece has taken the term and pushed it to untoward extremes.

Under the classical definition of self-interest, an individual exists and acts independently of others, and expects others to act independently of them. It’s in the best interest of individuals to barter and trade, but not with the threat of force. Everyone ends up better off.

The second side is the more modern approach: Whatever benefit or promise one can exact from government, the better off one is. It’s self-interest as determined by government fiat. It means having the threat of force to get your way. It treats the world as a zero-sum game where the only way for some to benefit is at the expense of others.

With that distinction in mind, consider modern Greece. The entitlement mentality led to jobs like hairdressing to be considered “hazardous” so that there would be fatter pensions and earlier retirements. Salaries and pensions of government employees took up 51 percent of Greece’s budget.

Meanwhile, the government downplayed its true debt picture in a cunning and innovative ploy that nobody would have ever expected from politicians: They lied!

No wonder wealthy citizens fudged their tax returns, bribed government officials, and even bought camouflage rather than pay taxes on luxuries like swimming pools. When there’s bad behavior at the top, it trickles down.

Even in late 2009, when Greek debt was making headlines for being in danger of default the first time, numerous bankers in the eurozone were lining up to buy Greek bonds.

That’s the real threat, and the real reason why headlines about Greece continue to appear. European bankers just couldn’t say no to their neighborhood deadbeat.

 It’s not really Greece that’s the problem. It’s that European bankers bought bonds from deadbeats that won’t pay out as promised without intervention from the European Central Bank.

A default or even substantial haircut on Greek debt could spur a banking crisis in Europe, the same way a haircut in the tiny tranche of subprime loans triggered a massive credit crunch in the United States in 2008.

Let’s make one thing clear: Greece is the Rhode Island of Europe. Its population and economic prowess pale in comparison to its neighbors in the EU. But even a pipsqueak can still cause plenty of damage, which is what Greece’s bonds threaten to do to the European banking system.

The sad thing is, it didn’t have to be this way. Since modern Greece was founded in the 1820’s, it’s been in a state of default nearly half that time. 

No wonder Greek two-year bonds are currently yielding 25.4 percent. Of course, to get that return, Greece will have to keep paying.

The investment implication is simple: Don’t invest with deadbeats. It just leads to the illusion of prosperity, before hard economic reality sets in. More importantly, it turns entitlement-addicted deadbeats into violent protestors.