I was wrong in a recent blog I wrote regarding Oprah pitching Universal health care. A guest in this episode of Oprah's show was from Dubai and bragged about how there was no income tax, how everyone had free health care, and showcased her lavish lifestyle.

I did some quick research and assumed from what I had read that Dubai financed it's social programs, and afforded a lack of income tax revenue, through revenue generated from oil production. I was wrong.

Dubai has been depending on capital raised by various government owned business, all managed by Dubai World, an investment company that oversees the government's business and project portfolio.

Dubai World, which is 59 billion in debt, has recently asked for an extension for a 3.5 billion dollar payment that was supposed to be made. European banks may have as much as 40 billion in exposure to Dubai's debt. This news hit European stocks hard over Thanksgiving weekend.

I was recently criticized regarding a critical blog involving NHS. The commenter stated that it didn't matter if NHS went broke because it was a government run program.

When a government spends too much, it can affect the rest of the world. Not only that, the debt the government runs up must be paid back, with interest. This debt affects the government's ability to provide the social programs it has, or even the basic services a government is supposed to provide like infrastructure and military. A government cannot simply borrow and print money with no repercussion.

What is happening in Dubai is an example of what happens when a government goes broke. The government must cut programs or raise taxes to provide even the most basic of services, and may not provide the same level of service it had been in the past. This in turn could drive business away, which affects the government's bottom line even further.

This is why "successful" governments with lots of social programs have high taxes, limited services, or both. As hard as it is to visualize, as it seems some governments have been spending and printing money like debt is an illusion, government must be run like a business or face bankruptcy and lean times.