Posts Tagged ‘Greece’

LinkSwarm June 16

Wednesday, June 16th, 2010

A swarm of links for your perusal:

Mark Steyn on The Greek’s Welfare State Tragedy (And Our Own)

Sunday, February 28th, 2010

I’ve talked about the problems facing countries like Greece and Spain before.

The problem with this Mark Steyn piece isn’t what to quote, but rather what not to quote. It’s filled with the usual Steyn pith, vigor, and remorseless demographic logic.

While President Obama was making his latest pitch for a brand new, even more unsustainable entitlement at the health care “summit,” thousands of Greeks took to the streets to riot. An enterprising cable network might have shown the two scenes on a continuous split screen – because they’re part of the same story. It’s just that Greece is a little further along in the plot: They’re at the point where the canoe is about to plunge over the falls. America is further upstream and can still pull for shore, but has decided instead that what it needs to do is catch up with the Greek canoe. Chapter One (the introduction of unsustainable entitlements) leads eventually to Chapter 20 (total societal collapse): The Greeks are at Chapter 17 or 18.

What’s happening in the developed world today isn’t so very hard to understand: The 20th century Bismarckian welfare state has run out of people to stick it to. In America, the feckless insatiable boobs in Washington, Sacramento, Albany and elsewhere are screwing over our kids and grandkids. In Europe, they’ve reached the next stage in social democratic evolution: There are no kids or grandkids to screw over.

Snippage.

So you can’t borrow against the future because, in the most basic sense, you don’t have one. Greeks in the public sector retire at 58, which sounds great. But, when 10 grandparents have four grandchildren, who pays for you to spend the last third of your adult life loafing around?

Snippage.

When seeking to ingratiate himself with conservative audiences, President Ford liked to say: “A government big enough to give you everything you want is big enough to take away everything you have.” Which is true enough. But there’s an intermediate stage: A government big enough to give you everything you want isn’t big enough to get you to give any of it back. That’s the point Greece is at. Its socialist government has been forced into supporting a package of austerity measures. The Greek people’s response is: Nuts to that. Public sector workers have succeeded in redefining time itself: Every year, they receive 14 monthly payments. You do the math. And for about seven months’ work – for many of them the workday ends at 2:30 p.m. When they retire, they get 14 monthly pension payments. In other words: Economic reality is not my problem. I want my benefits. And, if it bankrupts the entire state a generation from now, who cares as long as they keep the checks coming until I croak?

We hard-hearted, small-government guys are often damned as selfish types who care nothing for the general welfare. But, as the Greek protests make plain, nothing makes an individual more selfish than the socially equitable communitarianism of big government. Once a chap’s enjoying the fruits of government health care, government-paid vacation, government-funded early retirement, and all the rest, he couldn’t give a hoot about the general societal interest. He’s got his, and to hell with everyone else. People’s sense of entitlement endures long after the entitlement has ceased to make sense.

Read the whole thing.

Socialism Works Its Usual Magic In Spain

Sunday, February 21st, 2010

You may have heard about how Greece is fuxored thanks to a combination of high taxes, stagnant economy, restrictive job rules, and widespread tax evasion. Indeed, the sins of the Greeks may be enough to bring the Euro crashing down. It may come down to that, or else getting a bailout from an already-resentful Germany.

Somewhat less reported is the fact that the other members of Europe’s PIGS (Portugal, Italy, Greece, Spain) aren’t doing a whole lot better.

In particular, Socialist Prime Minister José Luis Rodríguez Zapatero seems to have worked socialism’s usual magic on Spain’s economy:

Spain now has the highest unemployment rate in the European Union. Nearly 20 percent of working-age Spaniards (or 4.5 million people) were without a job at the beginning of 2010. That compares with an average rate of 10 percent among the 16 countries that use the euro currency.

Spain is also facing an exploding budget deficit. The collapse of the labor market, which has resulted in a steep drop in tax collections, and the Zapatero government’s haphazard (and spendthrift) policy response of increasing unproductive public sector spending skyrocketed the deficit to nearly 12 percent of GDP in 2009 (or five times higher than in 2008).

The combination of negative GDP growth, rising unemployment, and a high deficit has raised concerns about the sustainability of Spain’s finances.

Hmmm: High unemployment, out-of-control spending, a huge budget deficit. Where have I heard that before?

In response to Spain’s economic crises, Zapatero has admitted that his socialist policies were a mistake, and set out a platform for lowering taxes, cutting the budget, an monetary reform.

Ha! Just kidding! He’s ordered Spain’s secret service to hunt for “Anglo-Saxon conspirators” as the cause of Spain’s problems. It’s always easier to scapegoat America than make hard choices, or face the consequences of your own failure.

At this point, I don’t it’s a question of if the Euro will crack, but rather when. Despite Obama’s mismanagement, the basic U.S. economy is still a lot more resilient and flexible than Europe’s. Europe has huge demographic problems combined with an unsustainable welfare state. Combine that with the the anti-democratic elites in Brussels, plus the fact that certain number of nations (the PIGS, certainly, but not limited to them) that are playing fast a loose with the EU’s deficit guidelines, and the chances are good that the Euro will crack sooner rather than later.

And the fallout from that isn’t going to be pretty for the U.S. economy either.