By Michael McCune
Many Americans think their economic condition is worsening but they live with it because, philosophically, how bad can it really get? Look to Greece for an answer.
Yesterday the Greece government finalized a deal with its creditors in order to stave off sovereign bankruptcy. By doing so it put into place some rather severe austerity measures to bring the government’s budget into line with the demanded spending cuts. Greece’s unelected leadership was desperate enough to accept the demands so today, ordinary Greeks everywhere are going to begin paying the price…in some cases literally.
Lucas Papademos, the unelected Prime Minister, former Goldman Sachs employee and general prostitute for the world’s banking concerns, has agreed to such drastic cuts, some retroactive to November, that some government employees like school teachers, police, firefighters and clerks will not only not receive pay this month but could have to PAY in order to keep their work place. (1)
Americans, currently in their national tax filing period, are generally upset when they don’t get as big a refund from the government as they expect but they still hold paying jobs, how would they react to having to “pay the government” in order to keep the job they have? Greeks, with an unofficial unemployment rate well above 33%, have no choice because somebody else will make the concessions just so they will have thepossibility of some income when the austerity measures are finally lifted.
But those people aren’t sure of when that will be. Fitch’s Rating Service, which slashed Greece’s credit rating from junk status CCC into the oblivion of a mere C category (2), figures the default will have to occur well before the planned austerity measures are completed in two decades as suggested by Werner Hoyer, president of the European Investment Bank.
In response, angry Greek unions have called for protest rallies to be conducted Wednesday afternoon outside Parliament. The communist party will hold a similar rally shortly after. Hopefully the two sides won’t join forces or the world would see how quick a country outside the Middle East can return to vigilante law where there are plenty of trees to hang the government hacks.
What particularly galls the Greek unions was the dismissal two weeks ago of 43 ELECTED members of Parliament by Papademos before the vote for austerity. Those members were opposed to the measures, figuring default couldn’t possibly be as bad as agreeing to and actually signing a bill that would destroy the Greek economy for the foreseeable future. In order to assure the vote for austerity, the technocratic Papdemos’ coalition which held 193 of the 300-seat Parliament had to make a choice between gridlock and acceptance of the plan. The political parties making up the coalition majority (Socialists and Conservatives) then evicted members not following the parrty line. (Reminds one of the political hacks with the R’s and D’s after their names in Washington when they routinely throw constiuent concerns under the bus for political gain.)
There is a lesson for America: cuts have to be made to government spending BEFORE the situation gets much worse. President Obama’s plan to triple taxes on dividends (3) without corresponding spending cuts are exactly what led to Greece’s problem. You don’t alleviate problems caused by debt by acquiring more debt to be repaid.
(1)-Atlantic Wire “Some Greeks Might Pay to Work” 2-22-12
(2)-Moneynews “Fitch Downgrades Greece to C” 2-22-12
(3)-Moneynews “Obama’s Triple Tax on Dividends Will Affect Elderly” 2-22-12
