Welcome To Debtor’s Hell: Greece Edition
In order to keep the deadbeats in Greece from going down the tubes, defaulting on their debt, and creating a huge new economic tsunami, their fellow Western European nations are going to pony up more than 100 billion Euros.
The scary news? Number one, it may not work over the long haul. Number two, it still requires cuts deep enough to inspire violent rioting in Greece and perhaps worst of all, this probably won’t be the last or the biggest European nation that will need this kind of help over the next few years.
Take a look at some of the gory details:
Debt-ridden Greece yesterday agreed the largest ever financial bailout of a country.
It will receive 110billion euros (:£95billion) from the European Union and IMF in return for deep cuts in government spending to reduce a huge budget deficit.
Announcing the deal yesterday, prime minister George Papandreou told his people to prepare for ‘great sacrifices’ after violent clashes between police and protesters opposing the cuts at the weekend.
He unveiled austerity measures and tax rises worth 30billion euros (:£26billion) including:
ËœAn increase in the retirement age from an average age of 53 to 67;
ËœGovernment workers to lose annual bonuses worth an extra two months’ pay;
ËœTen per cent tax rise on alcohol, cigarettes and petrol;
ËœThree-year wage freeze in the public sector;
ËœEarly retirement will be limited or abolished altogether;
ËœVAT increase from 21 per cent to 23 per cent.
…’These sacrifices will give us breathing space and the time we need to make great changes,’ he said. ‘I want to tell Greeks very honestly that we have a big trial ahead of us.’
The first rescue of a member of the 16-nation eurozone is designed to stem a debt crisis that has shaken financial markets worldwide and spread to other struggling eurozone countries such as Portugal and Spain.
There are also fears the crisis of investor confidence could infect the UK and other countries with large budget deficits.
This is much more likely to be the beginning of a fiscal disaster than the end. Western European governments are ginormous, their social safety nets are immense, and their populations are rapidly aging into retirement. This crisis? It’s painful, but they have the money to stave it off. But, what happens when the next country comes up for a bailout? And then the next one? Then the next one? Then a big economy like Britain? Eventually, they’re going to hit a wall, a nation’s going to default, and things are going to start to go south in a hurry.
Let me also note: an average retirement age of 53? Government workers getting bonuses worth two months pay? There are a lot of people undoubtedly thinking, “Wow, that sounds pretty good.” I’m sure it does — right up until the moment it bankrupts your country.
Yet, what do we have here in the United States? We have liberal Democrats looking at this sort of disaster and going, “Gee, we need to be more like those civilized Western European nations.” Newsflash: Nobody is big enough to bail us out the way Greece was just bailed out. If the United States is about to: go: belly-up like the Greeks — and, : yes, not only could it happen, it WILL eventually happen unless we get our spending under control — we will end up defaulting. Welcome to the Great Depression part 2 if we go down that road.
Time’s getting short and the tide’s getting high. We have real world examples of how bad things can get right in front of us. The unlimited borrowing and spending of Obamanomics will destroy this country’s future and saying, “I told you so,” when it happens won’t be worth the suffering.