Every American should be following what’s going on in Greece today because the biggest difference between Greece and us is that it’s a decade or two farther down the same road we’re on as a nation. Greece is all about big government and socialism; there are extremely generous pensions and retirement plans and sky high taxes. Greece is spending far more than it can pay and those “evil rich” people in the private sector have been beaten into the ground.
Behind the scenes the race is on for a decision on whether or not Greece will receive any more debt forgiveness, ahead of a meeting with European finance ministers on Oct. 23 in Brussels.
International banks have already agreed to a reduction of 21 percent. But participants in the discussions say there will be a greater “haircut” on the debt — somewhere between 30 percent and 50 percent, although the banking industry is fighting it tooth and nail.
The social cohesion of the country is being tested to its limits as it comes to grips with a debt crisis that means government workers are facing pay cuts and job losses, and the private sector is facing huge tax increases.
Greece now owes more than 360 billion euros, or half a trillion U.S. dollars. They are unable to borrow on the international markets, and are at the mercy of the European Union and the International Monetary Fund for quarterly cash injections so that, at a minimum, the government can keep meeting payroll.
…Greece could be forgiven 100 percent of its debts and it would still have to make wrenching changes to its government and its society. It still doesn’t have a balanced budget and needs to borrow in order to keep functioning.
Eventually, the government must create an economy that can grow in order to generate enough tax revenue to pay the nation’s bills.
Oh, there’s one other big difference between the United States and Greece. It’s a tiny nation, while we have the world’s biggest economy. Once we get into the same spot Greece is in, there won’t be enough money in the world to save us from our own folly.
That’s where we’re headed. So, what are we going to do about it?