Greece has a message for the US

February 14th, 2012 by Ken

OK – I’ll admit it. I don’t know much about Greece. I saw the movies “My Big Fat Greek Wedding” and the “300 Spartans”, and I know that Greece set the framework for democracy (I suspect that democracy is of Greek origin) but other than that, I don’t know much about Greece.

But, I do know that what happened in Greece recently has a significant impact on the United States and sets the stage for what could happen here.

Greece is part of the European Union and uses the Euro as its currency. Greece has been in financial problems for a decade or more and has borrowed money to survive. It was in danger of defaulting on its loans and that would impact the international banking community and all of the countries in which those banks operate.

So, the European Union bailed them out to the tune of $170 billion dollars, on top of the $145 billion dollars it had borrowed previously just to pay its bills.

All the Greeks had to do to get the money is adopt an austerity program that would cut down on the cost of government and government spending.

OK – they were draconian (also a Greek word, I think) which means tough. A 20 percent deduction in government workers and a 40 percent cut in pay and benefits. That’s where the rioting comes in.

Greek government workers and those depending on government handouts were doing the rioting. They just couldn’t conceive that the government’s purse had run dry.

For several decades, since the advent of democracy and the overturn of military rule, Greece had been living on borrowed money. The government employs a significant number of people with great benefits like very early retirement. The running joke was if you wanted to find a Greek government worker, just go to the local coffee shop and take your pick.

The Greeks were also notorious for not paying their taxes. The government turned its head as Greek after Greek ducked taxes and participated in the underground economy.

So, in order to remain popular and give the people what they wanted, it borrowed money to pay for the social welfare programs.

Now the tab has come due.

You can’t continue to expand government; you can’t continue to ignore people who don’t pay their taxes; you can’t continue to borrow money to pay for government welfare programs.

Does any of this sound familiar? Can we learn any lessons from Greece?

Only if we pay attention.

Posted in Government, History, Informational, The Real News

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