RSS Feed MenuThree dead and massive riots now in the streets of Athens. Paralyzing strikes from civil servants, so used to so much largess for doing so little for so long. A $145 billion bailout is in jeopardy with the big dogs of the EU, Germany chief among them, expressing serious concerns that the austerity measures demanded of Greece as a condition to merit the loans will ever come to fruition. Given the revised deficit projections and a public that seems unwilling to admit that their free ride brand of socialism as expressed in a financially unsustainable pension structure is collapsing, who can blame Europe?
Greece is bankrupt. Their debt is 108% of GDP and will climb to almost 150% by 2013 when the bailout loans would come due. 25% of Greek taxes will go to service its debt — to mostly foreign investors. Currently that nation’s government spending amounts to 50% of its GDP.
Consider then that in 2009 US debt was 86% of GDP and climbing. It will go past 100% by 2012. 20% of U.S. federal taxes go to service the interest on the national debt. That number too will rise. Our major social entitlement programs of Social Security, Medicare and Medicaid, are bankrupt. We are waging foreign wars almost entirely on our own—so that Europe doesn’t have to. And now we have just enacted the mother of all entitlements that only the most wishful of thinkers (or a cynical Democratic Congress and White House) would argue is anything but a multi-trillion dollar debt dog pile on top of an already strained budget.
Of course our gargantuan economy is much more vibrant, diverse and robust than Greece’s. But we are already seeing within our borders mini-Greeces popping up at the state level. 41 states currently face budget shortfalls and the effects are already being felt. Here in New Jersey school districts have suffered state aid cuts of 95%. (And in a little taste of the new entitlement mentality, our teachers union insisted on ramming through a contractually obligated pay raise anyway; Trenton’s financial woes be damned. So to make the numbers work, several teachers and other staff got the axe—without rioting.)
What is currently unfolding on the chaotic streets of Athens is an immovable force of a deep-seeded entitlement culture which is unwilling to give up its government goodies standing up to the irresistible force of brutal mathematics. Care to bet on what side will ultimately prevail? As we watch the inevitable fissures in European style socialism breaking wide open for all to see, this is a most propitious time to turn inward and ask ourselves if the model that the Democrats seem so intent on replicating here even works, let alone is best for our nation? The Tea Partiers are but one expression of this necessary dialog — shameful left-wing race-baiting notwithstanding. Ponzi schemes always come to the same dismal end, leaving some poor unfortunates to pay the bill. I would just like to know what makes liberal Democrats think that the inevitable reality of a seriously flawed socio-economic dogma now violently on display in the streets of Athens (and poised to spread throughout Europe) will somehow pass us by if we follow the same path? And if we continue down their road who do they believe will bail us out when the bill comes?
easton // May 6, 2010 at 5:03 pm
And as if on cue, the market has bounced back, gaining much of what was lost, with speculation that automated trading and a P&G listing glitch hurt everything, but considering the recent spate of terrible news, I am surprised the market hasn’t take as much of a hit.
I remember years back there were Leftists who seemed to positively revel in bad news coming out of Iraq so as to confirm their world views. I found them reprehensible, as I find equally reprehensible Rightist who revel in any job loss report or downturn in the market. Scadenfruede is juvenile and just flat out wrong, and coupling it with blatant ignorance “all is well in socialist land” is truly pathetic. I was against the Bush tax cuts but truly hoped they would succeed, I always held in contempt the deranged “Bush is a fascist” crap. Grow up and learn what real socialism or real fascism means.
ottovbvs // May 6, 2010 at 5:23 pm
easton // May 6, 2010 at 2:15 pm
“absolutely exquisite, the residents are snobs”
…….absolutely love the place and since I’m a bit of a snob I fit in very well
ottovbvs // May 6, 2010 at 5:26 pm
Jeffry1 // May 6, 2010 at 2:50 pm
“DJIA trading 9980(-900+ pts). All is well is socialist land. Will probably have a bounce back abouve 10,000.”
…….betting against the market are we Jeffry……so what’s it going down to then if Greece is just the beginning?……back to the mid 6000’s? would you say?
ottovbvs // May 6, 2010 at 5:32 pm
Jeffry1 // May 6, 2010 at 2:50 pm
…….and btw Jeffry if you were a real conservative and not a cardboard one you’d agree with me that the tough Euro medicine (cut public spending and actually collect taxes) is infinitely better in the long run for the Greek economy than a bandaid devaluation that would wipe out a big chunk of Greek middle and upper class savings.
Jeffry1 // May 7, 2010 at 8:08 am
Otto…I am not in the equity market. Commodoties are, believe it or not, much more honest. Equities markets are borderline rigged. But if equities are a measure of the overall health of an economy I would be short. (Wait until cap gains taxes increase next year. I think you will see a sell-off before the end of the year to lock in profits at lower cap gains rates but I could be wrong.)
Jeffry1 // May 7, 2010 at 8:10 am
Waston…the DJIA (as I predicted) bounced back…to only -300. Phew!
Jeffry1 // May 7, 2010 at 8:10 am
Easton not waston….typo.
Jeffry1 // May 7, 2010 at 8:14 am
easton….are you saying that equities worldwide are tied to the Nashville water table and the gulf coast toursim and shrimping industry? Got it.
As for China…demographics is against them…they wil get old before they ever get rich. Don’t look to them to save us.
I am not “happy” or “sad” about markets. Don’t get emotional about markets. They are reflections of economic conditions. Nothing more nothing less. “There is no side or bear side of the market….only the right side.” Old axiom from the 1910s.
Jeffry1 // May 7, 2010 at 8:16 am
Otto…of COURSE I agree with the austerity measures. Why wouldn’t I? The Dow is artificially high right now.
Th equestion is…will you agree with our austerity measures when the time comes? And it IS coming. I have already accepted that y SS money will not be there. But I am wealthy as you can tell so I don’t care. I just considered it the cost of ante to sit at the table that is (or was) the greatest capitalist game in history. I knew years ago that the social security and welfare edifice will eventually come crashing down. How? Because I have a calculator and a calendar.
Jeffry1 // May 7, 2010 at 8:23 am
Phsychology of markets: DJIA -900 then rebounds to settle -300: “Phew! Only down 300.”
DJIA unchanged and drifts to settle – 300: “oh My God! Down 300! Ahhh”
Jeffry1 // May 7, 2010 at 8:52 am
Easton…what DOES make me happy is the fact that 290,000 people found jobs last month. Being unemployed is a tragedy. (I’ve been there. It is demasculating and makes you doubt your won worth.) I am sincerely happy for them.
LFC // May 7, 2010 at 2:06 pm
Th equestion is…will you agree with our austerity measures when the time comes?
The Tea Party sure won’t. They want more tax cuts and minimal spending cuts, and they want them now.