Euro Debt Crisis? Not Greek To Me
From being the cradle of democracy to leadership in modern security (allowing stray dogs to sleep atop airport x-ray machines - no joke), from novel solutions to reduce speeding (traffic lights are routinely ignored, resulting in a seven miles-per-hour average speed in Athens) to having a good old-fashioned rivalry (hating the Turks), there’s something for everyone in Greece.
Topping it all, the legendary Greek work ethic (clock in, coffee, siesta, set up construction cones, break, coffee, siesta, lunch, siesta, ouzo, siesta, afternoon break, double shot ouzo, siesta, remove construction cones, baklava (with ouzo), siesta, clock out) has resulted in Greece being the catalyst for the coming Dark Age. Far be it for anyone to suggest increasing retirement age to something beyond what seems like 37.
Pay no attention that those asking for commonsense reforms are the ones footing the bill for that lavish lifestyle.
Because of runaway spending and immense entitlements bestowed upon Greek civil service workers, the government had a problem. The Piper finally came, but there was no more money.
So the European Union (EU) braintrust decided to bail out Greece, a combination of increasing the money supply (contributing to inflation) and using OPM (Other People’s Money).
And in return for the sacrifice others made for the “greater good” (such as the request to forgive 50 percent of Greece’s debt), what was asked of that nation? Reforms that would, in theory, get Greece back on solid financial footing, if that is possible for a nation whose debt exceeds an unfathomable 180 percent of its GDP.
The bailout was made, with self-congratulating, albeit clueless, Euro-technocrats preaching that all would be well.
And things were great, at least in Greece, as the message of austerity was received loud and clear, with a wink. Translation: “we’ll just continue with Business As Usual.”
However, as any fifth grader could have deduced, the Greeks ran out of money - again and again and again. Not willing to cut their losses, the EU did exactly what Greece knew it would - open up its coffers, again and again and again.
We are on the sixth installment of the bailout, still predicated on austerity measures that simply aren’t happening.
And are the Greek politicians enacting unpopular but necessary reforms to avoid default?
Uhhh…put it this way. Predicting Kim Kardashian would be divorced after only two months was a better bet than thinking the Greeks would do the right thing.
The latest development, mistakenly called a “bombshell” but an obvious next step to all but the Euro-Geniuses, was the decision to pass the buck by calling for a referendum on austerity measures.
So the Greeks, who have been rioting because they don’t want the party to end, are now being asked to voluntarily turn off the free-money spigot. Sure they will.
To be fair, the vote won’t be unanimous. There are probably 30 Turkish expats who will vote Yes just for spite.
Oh to be Greek!
The European Financial Stability Facility (a great oxymoron) and Central Bank continue their insane polices of bailouts and bond-buying initiatives. Portugal and Ireland have also received bailouts that haven’t worked, so more money will be heading their way.
The big boys of Italy and Spain are next, and their financial needs are exponentially greater than the other nations combined.
The most significant, yet least discussed, issue in this debacle is that no one is offering solutions. Instead, they are merely buying time so that the can is kicked down the road again, praying the implosion occurs on someone else’s watch. Throw more imaginary money at the problem, say the right things to keep sheep-like investors duped, and don’t get caught holding the bag.
That has worked for decades, but too many fundamental economic principles have been violated to keep the Piper at bay much longer. The Ponzi scheme of socialist-leaning Western economies is quickly approaching implosion status, and when it blows, the Great Depression will look like a walk in the park. That’s what happens when socialism and laziness trump free markets and personal initiative.
The referendum is being labeled a high-stakes gamble, with Prime Minister George Papandreou betting the Europeans are in so deep that even if austerity is rejected, bailouts will continue. Default, we are told, is far worse.
But the truth, which no one seems willing to admit, is what transpires in Greece doesn’t matter. Given the complete lack of will in America and Europe (and the absence of an even basic understanding of economic principles), an unprecedented crash and massive social unrest is inevitable.
That is the reality grounded in cold, hard facts.
Ultimately, even Bernie Madoff was forced to confess to a Ponzi scheme. When will reality force our leaders to do the same?