What you are seeing in Greece you will see repeated often in the next few years. Other Eurozone countries who did not control their borrowing will also experience the same problems as Greece, Portugal, and Ireland. These were mainly Socialist governments that bought elections by promising what could not be delivered. Spain could be next, and Italy, then soon in France. The bigger countries will each have a larger impact on the world economy. Other Eurozone countries will be weakened significantly by the attempts to prop up the failing countries and then in the dissolution of the Eurozone. They will also be weakened by the decline of international trade, as countries cannot afford to buy internationally. We could see tariffs spring up again, as in the mid-1920s. If these countries default, you will see large bankruptcies in other countries and economic dislocations, that will be a recession and, perhaps, depression. Although US banks have made few loans directly to Greek banks or the government, they have insured many of the European loans. A default will touch us, hard. And we aren’t out of our own recession.
Notice that the endless rounds of intense discussion and bargaining, with actions that, if rationally based, would result in significant improvement in the situation, only that a few months later the same events occur again. And notice, no one is really surprised. In the blogs you find people just calling these intense efforts, “kicking the can down the road”. That is, everyone seems to know that these actions will not produce any legitimate results and that the future only holds more of the same, until bankruptcy or default occurs. These events, with the seriousness, intensity, pretend efficacy, and intellectual bankruptcy, are right out of Atlas Shrugged, complete with consistent failure.
In the next few years, as Europe spirals downward, we will see a similar failure occur in Japan, and ultimately in the U.S. The big difference for us will be that there won’t be anyone to pretend to bail us out. The IMF and other rich countries will have used up all of their resources by then (but then, most of the IMF resources came from us).
I always knew that these countries would suffer major economic disasters. I knew that they could not keep their welfare systems functioning in the long term. I was wrong, however, in the mechanism. I thought that the problem would be the aging of the population. The Ponzi scheme of taxing to pay current welfare state benefits would hit population problems (an application of Maltus that he didn’t foresee!). Okay. So I was wrong. It is the debt! Debt. We have seen several debt crises over the last decades. What is coming will make the earlier problems appear as minor ripples. Obama has really brought it all to a head for us. Our chance.
For those who are focusing solely on health care, what do you suppose it is like in Greece, or will be over the next few years, or will be when Greece defaults on its debt and has no money in the government till, or leaves the Eurozone and has to depend upon its own resources and inflates its currency? That will be our fate in a few years. Which will happen first, ObamaCare or our own depression? Even if you save us from ObamaCare, you will lose to the depression.
I did look at the Greek protesters as complete idiots, protesting the end of their gravy train paid for by others. But I have reconsidered. One commentator I read explained the reaction of the protesters by saying that the prospects offered by the government were very bad, and that default wasn’t significantly different, by comparison. They are protesting the dead-end view of the Greek economy. Unemployment was skyrocketing, production down, and government debt – what all the fuss is about – was way up. In fact, every account I have read of what is expected in the future for Greece, including those who are very critical of the Greek protesters, say that without the government spending, the economy will continue to spiral downward. No one that I have read expects the Greek economy (or the Irish or the Portuguese) to improve. Every commenter, even “conservative” ones, regard the government as a prime mover. Its reduced presence means continuously lower production and growth, they say. Now this is patent nonsense. Yet, it is also the case that these economies will die, not because the government is the prime mover, but because these countries have removed the prime mover from the economy by law and ideology. That is, the individual is forbidden to seek his own way and make his own decisions. Self-interest is not allowed to flourish. Laws restrict initiative, hiring, firing, and generally doing things – producing. By law and ideology, they have forced the atlas to shrug.
We can see the same thing happening today in our country. Businessmen continually say that in the current climate of uncertainty and forthcoming, vague regulations, they are not willing to hire or make plans. The decision makers are frozen. Major corporations are sitting on hoards of cash, but don’t know what to do. They are stopped in place by Obama and his willingness to arbitrarily assert control over men. Greece is an advanced example of our same system.
I am an admirer of Greece, Ancient Greece. One cannot forget, however, that the present inhabitants of Greece bear little resemblance physically and intellectually to the ancients. The ancient Greeks were heroic both physically and intellectually. The present Greeks are not. The ancient Greeks laid the foundation for Western Civilization, and all that it could be. The present Greeks have no knowledge or desire to know what the ancients learned. The ancient Greeks made possible the United States of America. Unfortunately, Greece is our future, but not like Greece was our past. Unless, of course, the descendants of the ancients stand forth and don’t let their world go.
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