|Playing Sick Games With The Public|
Thinking Things Over
|By Jerry E. Clark|
July 2, 2015 -
It cannot help but be clear to anybody who follows the regular news cycle: The citizens of Greece, the cradle of democracy, are now in nearly total disarray after its government decided to become an international "debt deadbeat," failing to pay the International Monetary Fund a $1.73 billion payment earlier this week.
Everybody saw it coming - but few Greeks really believed the key figures in Europe would insist on key changes to the Greek financial system before any more money would be given to that country.
Now, look at the mess. It was all very predictable, however.
For years, lavish retirement schemes including young retirees, and padded public payrolls complete with benefits far outstretching the government's ability to pay were implemented with the past couple of decades of Greek budgets swollen with debt.
Various prime ministers continued to promise to maintain benefits and all sorts of freebies so that the public would keep them in office. Now, look at the mess that has resulted. Greece owes various creditors a couple hundred BILLION dollars and there's no end in sight. There is simply no way it will be able to pay back its creditors under its current system - yet day after day, the left-wing Syriza party, now in power, has promised the public that if it just votes NO in the referendum set for July 5, it will be able to negotiate a better deal with its creditors. That's a complete fabrication and everybody seems to understand that...except, of course, most Greek citizens.
The upshot is this: the average Greek citizen will soon be subjected to very serious shortages of all kinds, from grocery items to spare parts to the ability to do business abroad - due to a) a big shortage of cash and b) the inability of its government to pay retirees and other public benefits that it has, so far, been paying with billions in borrowed Euros from the likes of the International Money Fund, the European Community Bank and various bondholders. That ballgame is nearly finished.
It wouldn't surprise anybody if a social revolution takes place or if some rival faction like the communist party attempts a takeover like what happened shortly after World War II.
On a more positive note, perhaps a coalition of right-minded, conservative Greeks will take power, negotiate with the IMF and the ECB in good faith and get the country back on a fiscal track that is sustainable. Who knows what will happen.
Now, on to the United States.
* * * * *
In this country, we're approaching the debt limit of a bit more than $18 trillion - trillions more debt than when President Obama took over in 2008. Mr. Obama claimed that much had to be spent to avert an economic crisis, but he's enacted countless new public spending schemes to exacerbate that trend (with even more proposed) that will take the country on an even more debt-ridden track.
A few voices in the economic wilderness have complained about this massive new debt load, but the average American (like the average Greek citizen) so far, does not take the debt issue seriously. That's not good.
If you believe I'm waving the flag of false desperation, think again. Just ask any one of the almost 1400 Chicago teachers who just got fired if debt and public obligations beyond the means of government is serious. Pension obligations, including some in the six-figure range negotiated with teachers and former Chicago politicians, have created a real financial mess.
The great state of Illinois is basically bankrupt. Ditto California. New York is in big trouble and Massachusetts cannot get a handle on its growing public obligations. In short, debt, and the promise of big public payouts to union organizations of all kinds, is a growing menace nationwide.
Add to this the fact that the federal government deficit is monstrous and you get the clear idea that debt is not just a word, but is a word with huge potential consequences.
As the next U. S. election approaches, citizens might wish to consider which candidate is living in reality, which are promising all sorts of new spending and which are concerned that the nation live within its means.
Unless, of course, we want to end up like Greece...