The bit of good we’ll pull out of the coming financial crash (temporarily delayed by European governments stealing from their people to cover the losses of gamblers dressed up as investors):
What we’re seeing in Greece is the death spiral of the welfare state. This isn’t Greece’s problem alone, and that’s why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven’t fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.
Americans dislike the term “welfare state” and substitute the bland word “entitlements.” The vocabulary doesn’t alter the reality. Countries cannot overspend and overborrow forever. By delaying hard decisions about spending and taxes, governments maneuver themselves into a cul de sac…
We’re not as deep in that cul de sac as Greece, but Obama is hustling us down the road as fast as he can. But, also, don’t work yourself up too much blaming him – he’s clueless about economics and is merely carrying out the socialist/Kenyesian instructions of others. It sounds like it should work, and so off Obama goes – keep in mind that a bit of the money being picked from pockets to pay off Greek bond holders is coming out of your pocket…Obama made no objection to IMF funding for Greece, and that means your tax dollars are now at work in Europe.
Fun, huh?
Anyways…
The whole concept of a welfare State was never workable. When it was first proposed, the idea was that if you gave everyone a middle class income it would spur such growth as to pay for itself. Ok, ok – stop laughing. Seriously, that is how it was sold…
Of course, what happened was lower productivity, increased dependence, vastly greater expenses than anticipated, and lower economic growth resultant upon higher taxes on productive enterprise. That didn’t stop it – in fact, it was just expanded more and more. Europe got even further in to it than anywhere else because they could gut their military spending and rely on the United States to pick up the slack.
But now the proverbial poop has hit the fan – there simply isn’t enough money in the entire world to cover all the debt and promises. Something has got to give – and it will have to be either sovereign default followed by financial collapse, or financial collapse followed by sovereign default. There is no easy way out of this – the piper must be paid.
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