Let Greece Default Already
Greece is a crummy little country with terrible demographics, a mediocre economy, and a massive government that has been spending far more than it has for far too long. Liberals, being liberals, in Greece and across the rest of the world, can’t accept the plain and simple truth: Greece is in trouble because its government is too big, its benefits are too generous, and it’s run out of money.
At this point, Greece is only avoiding default because its betters are pumping money into a country that has no hope of ever paying them back. And yet…
Lucas Papademos, the Greek premier, failed to make party leaders accept harsh terms in return for a second â‚¬130bn bail-out, pushing Athens closer to a disorderly default as early as next month. Greek television reported that Mr Papademos has set a deadline of midday on Monday for the three leaders to let him know whether they agree in principle with the proposed austerity measures, before he meets them again later in the day.
After five hours of discussions, the three leaders of Greece’s national unity government had not accepted demands by international lenders for immediate deep spending cuts and labour market reforms as part of a new medium-term package.
Mr Papademos said the political leaders had agreed on some “basic issues”, including making spending cuts this year of 1.5 percentage points of gross domestic product, or about â‚¬3bn, according to a statement from his office.
George Karatzaferis, the head of the small rightwing Laos (People’s) party said as he left the prime minister’s office, that he expected the talks to continue on Monday. There was no immediate announcement by Mr Papademos.
It was clear however that the talks had reached a dangerous deadlock. “They’re asking for more recession than the country can take,” said Antonis Samaras, leader of the centre-right New Democracy party as he left the meeting.
Meanwhile, we have liberals raving about the foolishness of “austerity.” The fact of the matter is that Greece is not just broke, it’s so broke that it may not even be able to continue to borrow money to pay its bills. That can happen in this country. In fact, it may happen within 5-10 years and since we have the biggest economy in the world, there is no Germany to ride to our rescue. A default by the United States would likely lead to a worldwide Depression and much more importantly, an honest to goodness Great Depression right here at home that we might not recover from for decades.
That’s why I’m rooting for Greece to default with all the misery, disaster, and horror that will go with it. There’s a lot of bad that would come from Greece going down the tubes, but that might also be the event that wakes people up. If they see a complete economic collapse, government checks stopping, and people starving to death in Greece, they might realize that can happen in this country, too — and it can. Greece made its bed. Let Greece lie in it already so its example might spare other countries its fate.