America Not Far From a Greek Tragedy
- 10 May 2010 by Author 0 Comments
U.S. Not Far From A Greek Tragedy
By Richard Larsen
Published – Idaho State Journal, 05/09/10
Tens of thousands of protestors looting, pillaging, wantonly destroying property, chanting anti-government slogans, and cursing the president. The images are not pretty, as even the mainstream media are finally covering the monumental story. With obvious regret that it isn’t the Tea Partiers being covered, international media are reporting the meltdown of a socialistic economic system.
The president of Greece has warned that his country stands on the “brink of the abyss” as anti-government mobs protest government efforts to reduce government spending, entitlements, and wealth redistribution. The mob is comprised of employees of the government they’re protesting. Civil servants and public employee unions have mobilized in opposition to governmental efforts at curtailing spending.
Even though Greece is relatively small on the global economic scale, it figures prominently as the portent of eventual European Union dissolution. The nation has only 11.3 million people, and its GDP is estimated at roughly $333 billion. Thanks to EU and U.S. taxpayers, Greece is in the process of being bailed out. First indicated at $60 billion, then $100 billion, then $120 billion, and finally $150 billion is now being promised by the U.S. funded International Monetary Fund and EU member nations to bail out the nation.
It’s impossible to know where this will all end. Portugal, Spain, and Italy are in nearly as bad of shape, as their appetite for spending has also far exceeded their ability to generate the revenue to finance it all.
Some states in the U.S. are in just about as serious of financial disorder. California, New Jersey, and New York are not in much better shape than Greece, and will undoubtedly be beating a path to Capital Hill to panhandle Congress on behalf of their debt-laden state coffers. Taxpayers will be hit up yet again to bail out those who have no logical grasp of reality or comprehension of simple laws of economics who have sought to create dependency on the government at the expense of those who really produce.
One of the most pathetic aspects of this mess is the fact that even the United State of America is rapidly approaching that same break-point. The Social Democrats in the European countries most in trouble have not only spent their nations to the brink of bankruptcy, but their promises for entitlements and continued wealth redistribution ensure financial instability and sovereign insolvency at some point in the future.
Our Social Democrats in Washington have proven as adept at illogical financial excess and fuzzy math as their European counterparts. Not surprisingly, since they took control of Congress in 2006, the nation has lurched into a left wing nose-dive. If not corrected by a more reasoned and logical congress in November, the U.S. will be facing the same prospects as Greece, yet with much more catastrophic consequences. A report issued in March by the Congressional Budget Office indicates that Obama’s 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected!
Over a third of Greeks work for their government, a figure not that far out of the realm of possibility for the U.S. The “stimulus” from last year has proven to be stimulative only to government growth. And like their Greek counterparts, American civil servants are the most represented segment of the workforce organized into unions. And as economic historian John Steele Gordon points out, “Federal workers now earn, in wages and benefits, about twice what their private-sector equivalents get paid. Government workers often have Cadillac health plans and retirement benefits far above the private sector average: 80 percent of public-sector workers have pension benefits, only 50 percent in the private sector. Many can retire at age 50.” While private employers were shedding jobs during the recession, state and local governments hired 110,000 new workers.
Mona Charen, in a Wall Street Journal column noted last week, “And in a corrupt feedback loop that may not be so very different after all from the Greek practice, public employee unions give generously to Democratic candidates, both in cash contributions and by manning phone banks, getting out the vote, and so on. It’s no coincidence that the states with the most powerful public sector unions — New Jersey, California, and New York — are facing the most severe budget crises.”
The nations’ politicians have got to get a grasp of reality, shake off the imprudent and fallacious Keynesian notion of a nation spending itself out of a recession. And unlike the anti-government demonstrators in Greece, who are employees of the state and are fighting for continued excess, American Tea Party demonstrators are speaking out in opposition to the kind of spending that is giving new meaning to “Greek ruins,” in hopes of staving off the same fate in our country. The Social Democrats in our Congress, of both parties, must be removed from office and replaced with people who know how to balance a checkbook.
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board.