By Ron Hart
Like our country, Greeks have long slid down the slippery slope of socialism. They are now gambling their country’s future like Jimmy the Greek. It’s a consequential moment for the Eurozone. Now we see what happens when a country runs out of other people’s money.
Leftist Prime Minister Tsipras convinced the entitlement-minded Greeks to vote “no” on repaying the debts that fund their lazy lifestyle.
The country has run up unsustainable budget deficits with lavish government spending on unions, early retirements for government workers beholden only to the political class, impossible labor laws, regulations, taxing the most productive, subsidizing failing businesses, Madoff-like accounting practices and socialized health care. Sound familiar? It could be Barack Obama’s own “I Have a Dream” speech.
Hypocritically, President Obama called the Greek Prime Minister to discuss the deteriorating situation. The Greek leader responded, “Are we talking ours or yours?” In one of his many “Do as I say, not as I do” moments, Obama lectured that Greece should curtail spending and reduce its debt. Then the Greek leader advised Obama on the best way to make a tourist destination out of the ruins of a once great country.
16% of Greece’s budget goes to fund government pensions. (This is the type of country whose navy has ten ships and 250 admirals.) Pandering populist politicians then raise taxes to pay off unsustainable financial promises. The productive leave the country, along with the businesses they own, and the situation spirals.
Greece’s economy has contracted by 1/3 since its last crisis in 2010, which led it to borrow from the IMF (International Monetary Fund). A payment of only $1.5 billion euros came due June 30th, but Greece could not come up with the money. Obama thought owing only $1.5 billion was cute; hell, he hides that much money as an earmark in an appropriations bill. The U.S. is 17% of the IMF, so we pay. IMF’ed again!
What has happened to Greece is happening in the U.S. under Obama. Businesses are leaving. We have the about the highest corporate tax rate in the industrialized world; as a result, corporations are doing “inversions.” American companies merge with Swiss or Irish companies and move their headquarters there, often cutting their tax rate in half. ACE bought the venerable U.S. company Chubb last week and moved its headquarters to Zurich. Many other companies are doing the same thing, for the simple reason that corporate tax rates are 12.5% in Ireland and 35% in the U.S.A. Business goes where it is treated best. The low tax countries get the revenues — and the jobs.
Most Americans do not understand the long-term economics of this situation. They think the Eurozone is the area of your coworker’s body that HR department films warn you not to touch.
The Greeks created democracy over 2300 years ago, and now they are going broke. The U.S. adopted democracy 240 years ago, and we are going broke trying to impose it on people all over the world through our military.
If Greece goes under and is kicked out of the Euro, it will be fine. You have to have heaven and hell for religion to work. In capitalism, you have to have success or bankruptcy for it to work. The latter is cleansing, and there has to be pain.
Greece is now only 1% of the GDP of the Euro, so its financial meltdown not that important to the world economy. Banks have closed, and Greece is reverting to a third-world mess. The real geopolitical risk is that Putin, the loan shark of the region, will pounce on Greece’s socialist-minded population.
Puerto Rico and Greece are now going broke. California is on its way. What it is about coastal weather that makes people want to sip coffee in cafes all day while complaining that government doesn’t do enough for them?
The Greeks created philosophy. So who would guess that a country full of philosophy majors couldn’t repay its debt to a U.S. government filled with gender studies majors? A country with all those Greek letters in its name looks like a fraternity house, and thus will get nothing from this administration — except maybe a false rape story in Rolling Stone.
You will see Greece coming to Obama for a bailout disguised as “humanitarian help.” Obama will say, “Up yours, Zorba! Come back when you are a U.S. public sector union or a solar energy company political supporter with no chance of making it.”
(Ron Hart, a libertarian syndicated op-ed humorist, award-winning author and TV/radio commentator can be reached at Ron@RonaldHart.com or visit RonaldHart.com)