AKA Joining the EU or the Greek Regret
For some time I’ve been collecting links to articles for a large post on the American economy. Sadly, there are simply too many pieces of bad news to write a reasonably sized post. Still don’t know what to do with all those links, but in the meantime a financial crisis in Europe may be an indicator of what will happen to the USA.
Greece’s deficit percentage of their GDP has ballooned to unmanageable proportions and it has caused the money markets to be shaky. For awhile, it looked like Germany would bail them out since that is what people in Europe expect. That is looking highly unlikely and the economically better off EU nations have little sympathy for the Greeks despite the threat insolvency would have on the Euro.
The Greek government shows no signs of taking any real measures to deal with their debt and the Greek people have threatened strikes and riots over austerity plans. Total paralysis of the always unstable government is where they are at. With reform opposed by people on the dole, nothing can be done. This is the sad place turning a nation into a welfare state will take you.
Thing is, they joined the European Union. That means they ceded sovereignty under certain economic conditions according to the Lisbon Treaty. So now the Greeks have been informed that they have to take drastic measures or the EU will do it for them. While I have my doubts about the ability to force the Greeks to comply; it has to be noted that there has been talk of throwing them out of the EU.
I’ll be blunt. I have no sympathy for the Greeks as they are a socialist state that can’t keep a coherent government in place for any extended amount of time. They also foolishly voted away their ability to be an independent nation out of greed, with visions of wealth rolling in from the union.
But this crisis bears watching for it may be a predictor of what will happen in the near future for the United States. We are currently running an insane deficit in a moronic attempt to spend ourselves out of debt. While we aren’t part of an economic union that can step in to take over our finances, we have a problem in how much of our securities are held by China, our number one creditor.
Oh wait, they sold off a huge amount of our bonds in December and Japan is now #1. China is showing signs of getting out of our bonds. But hey, we can find plenty of buyers because of how safe our bonds are, right? Ummmmm….
Yeah, we are in trouble. Just three years out from when the Democrats took over Congress and we are considered riskier than Kazakhstan. At some point the debts are going to be called due, especially if economic woes get worse in China and Asia. Our creditors will be in a place to dictate to us.
Our founding fathers looked to ancient Greece and Rome for inspiration in setting up our government. I posted earlier about Victor Davis Hanson’s argument that we have made the same economic mistakes as the Romans. Now I have to wonder if we are also following the path of the modern Greeks.
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