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Greek/EU Collapse Foreshadow Future of U.S.

As we follow the communist, Keynesian policies put forth by Obama and the democrats/progressives/liberals of trying to spend our way to prosperity, we are driving ourselves down the road of destruction. What is happening in Greece is a very good illustration of that. As the first article says, “The moral of the Greek drama is this: What can’t go on forever will eventually stop.” The Obama level of spending CAN’T continue. We will be a third world, third rate power sooner rather than later if we do not change course. The crash is going to make the 1929 crash and ensuing depression look absolutely wonderful compared to what is going to happen.


Greek deficit crisis holds lessons for US, others

Financial markets are alarmed by the public spending binge in Greece, causing a slide in the euro. The lesson is basic: Countries with high deficits, including the US, must get their fiscal house in order.

By the Monitor’s Editorial Board / February 12, 2010

A modern Greek tragedy, based on that country’s self-inflicted fiscal woes, holds lessons for other nations with deep deficits – including the United States.

Not to slight the birthplace of Western civilization, but what’s unfolding in Athens right now wouldn’t be getting top global billing were it not for Greece’s connection to the euro currency. Along with 15 of the European Union’s 27 member nations, Greece belongs to the “euro zone,” and therefore its problems can turn into Europe’s problems.

One rule for countries that use the euro is that they’re not allowed to let their budget deficits grow larger than 3 percent of their national economies, as measured by gross domestic product (GDP). Some countries have slipped a little. Some a lot.

Greece is in the latter category, with its deficit more than four times what it’s supposed to be, or 12.7 percent of GDP in 2009 (by comparison, the US deficit is about 10 percent of the economy). Over the past decade, Athens turned government spending into an Olympian sport. It about doubled the wages of public-sector workers, for instance.

The overspending, along with chronic tax evasion and the fudging of federal accounting, have finally alarmed the financial markets. They worry Greece will default on its debt payments. That worry has roiled the bond markets and caused a slide in the value of the euro, which Greece’s fellow zonies are none too happy about.

Yes, a cheaper euro makes their exports less expensive to the rest of the buying world, but a slumping currency also means lower wages and slower economic growth – right when Europe is trying to recover from a severe recession.

This week, the European Union agreed to stand by Greece, but it was vague about how exactly it would help its Mediterranean member. Even as the EU offered support, it emphasized that Greece must take austerity measures. Indeed, Greece has a plan, including a freeze on public-sector wages, tax increases, and a higher retirement age to save its ailing pension system. The plan didn’t sit well with public workers, who recently took to the streets to protest.

The moral of the Greek drama is this: What can’t go on forever will eventually stop. The financial markets will, at some unknown point in time, wake up to nations – or companies – that can’t keep a tidy fiscal house. …

Collapse of the euro is ‘inevitable’: Bailing out the Greek economy futile, says FRENCH banking chief

By Sam Fleming and Tim Shipman
Last updated at 1:07 PM on 13th February 2010
The European single currency is facing an ‘inevitable break-up’ a leading French bank claimed yesterday.

Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide ‘sticking plasters’ to cover the deep- seated flaws in the eurozone bloc.

The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a ‘double-dip’ recession in the embattled zone.

Claims that the euro could be headed for total collapse are particularly striking when they come from one of the oldest and largest banks in France – a core founder-member.

In a note to investors, SocGen strategist Albert Edwards said: ‘My own view is that there is little “help” that can be offered by the other eurozone nations other than temporary, confidence-giving “sticking plasters” before the ultimate denouement: the break-up of the eurozone.’

He added: ‘Any “help” given to Greece merely delays the inevitable break-up of the eurozone.’

The alarming claim came a day after European Union leaders promised ‘determined and co-ordinated’ action to shore up Greece’s tattered public finances, but disappointed traders by failing to provide specifics. …

… He said: ‘The eurozone is facing a fully-fledged crisis. The Greece episode has made it painfully clear how flawed the euro project was from the very beginning.

‘Even if Greece receives a one-off bailout it would not solve the real problem, which is the huge differences in competitiveness between the eurozone’s richest and poorest members. …

… ‘If these differences are to be evened out, the EU would need a single budget and common taxes so it can redistribute resources. (Global governance and redistribution of wealth. This is the communist Utopia that the “progressives” are driving for. Just as it failed in the Soviet Union, it is about to fail in the thinly disguised socialist experiment of the EU.)

‘One thing is clear, Britain made the right choice in staying out.’


One Response

  1. Mr. Geithner is only following form. He did nothing to regulated the banks as the President of the NY FED. He also knows he is finished in the federal government. Next step CEO of a Wall Street firm. He is still a young man and is going to nothing to ruin his future job possibilities. Everyone of Paulson’s Treasury assistants are now making millions working for Wall Street firms or in the case of Lockhart and Kashkari funds that are making millions from the current debacle. The only ones who are paying for the debacle are the middle class with the the baby boomers being clobbered the most..

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