Update on Greece: Greece's misreporting of its debt , more strikes, and Greece to seeks to activate aid package.

(This is long. It probably won't be read in its entirety. The Ayn Rand article is a good simple explanation of what is wrong with the world's economy.) This is a great post to follow the previous one about unions and how they have helped to bankrupt states. We can see a more progressed parallel situation happening in Greece and the EU --this provides a look at America's and the world's future, if you care. Greece has under reported its level of debt and there are more strikes,

Civil servants staged a 24-hour strike Thursday against austerity measures and expected job cuts by Greece's crisis-plagued government, and the EU's statistics agency said the country's budget was even worse than previously thought."
The strike disrupted public services, shut down schools and left state hospitals working with emergency staff. Protesters from a Communist-backed trade union blockaded Athens' main port of Piraeus, disrupting ferry services. Eurostat, meanwhile raised Greece's budget deficit in 2009 to 13.6 percent of gross domestic product from its earlier prediction of 12.9 percent, while the ratio of government debt to GDP stood at 115.1 percent, the second highest in the European Union after Italy.
In comments that are sure to rattle markets, the statistics agency also expressed "a reservation on the quality of the data reported by Greece." It also said Greek's 2009 figures could be revised further, to the tune of 0.3 to 0.5 percentage points of GDP for the deficit and 5 to 7 percentage points of GDP for the debt.[...] About 3,000-4,000 protesters marched through central Athens, carrying banners reading 'tax the rich' and 'Don't take the bread from our table.' Scuffles broke out when about 150 demonstrators challenged police lines near the city's central Syntagma Square, and police responded with tear gas.

The strikes are not that big of a deal, but it influencing the politician's will to make the tough budget cuts. There are some reports out there saying that America's level of debt is much higher than stated especially when considering all the unfunded liabilities and, as noted in the previous post, most states' pension funds are underfunded, especially California's, are vastly under funded. "Markets were shocked last fall when the government announced that the previous conservative Greek government had issued misleading financial data for years." How will the world markets respond when the magintude of America's debt is made know or when the harmful effects are manifested?














Greece has now requested to activate the IMF and EU bailout package.

Greece bowed to overwhelming pressure from financial markets on Friday and appealed for emergency eurozone loans in what will be the first rescue of a euro area country. Greece’s socialist government said the prospect of financial collapse had forced it to ask for the activation of a €30bn ($40bn) lifeline that could ultimately be worth €45bn once a contribution from the International Monetary Fund is included. The request marked a defining moment for the European Union, whose ambitions to play a more prominent role in world affairs rest partly on a claim of successful economic integration that the Greek debt crisis has thrown into doubt.

The long term effects on the EU will have to wait to be seen. Will it be broken up or will it be strengthened?

Greece must accept more austerity measures as part of accepting a bailout and this does not sit well with the unions,

The IMF is likely to demand tougher austerity measures than Mr Papandreou adopted in his 2010 budget. Greek trade union leaders warned that they would strike in early May to protest against any new measures that threatened salaries, pensions and employment rights. 'This mechanism adds to the threat that workers’ rights are about to be overturned. We will take the road of social resistance and increased mobilisation,' said Spyros Papaspyros, head of Adedy, the public sector union.

I don't know if these strikes will have a large enough impact to prevent the implementation of the "tougher austerity measures". While it is a good thing that the IMF is demanding tougher austerity measures by Greece, it is yet to be seen if these cuts will be meaningful, at the end of the day the IMF is dictating what a nation must do. What will the world body demand when it has to start bailing out the major economies of the world? Hopefully in line with what the IMF is currently demanding.

The overall structure of the world economy can best be summed up in the last half of this article by Rand. You can listen to it at Ayn Rand dot org, start at min seventeen.

How does this relate to America and your future? Look at how much in debt the States are and the level of debt that our government has with all of its unfunded liabilities and you can see that America is behaving like Greece did. According to what this guy is saying, one can compare what Greece has done financially and compare it to what this guy is pointing out that America is doing and one can see that America will be facing a similar situation that Greece is.

Bill Gross is used to buying bonds in multibillion-dollar batches. But when it comes to U.S. Treasury bills, he's getting nervous. Gross, a founder of the investment giant Pimco, is so concerned about America's national debt that he has started unloading some of his holdings of U.S. government bonds in[...] 'In order to pay the interest and the bill when it comes due, we'll simply have to issue more IOUs. That, to me, is Ponzi-like,' Gross said. "It's a game that can never be finished.'[...]It's a tough task. The short term looks awful, and the long term looks hideous. Under any likely scenario, the federal debt will continue to balloon in the years to come. The Congressional Budget Office expects it to reach $20 trillion over the next decade -- and that assumes no new recessions, no new wars and no new financial crises. In the doomsday scenario, foreign investors get spooked and demand higher interest rates to continue bankrolling American profligacy. As rates shoot up, the United States has to borrow more and more simply to pay the interest on its debt, and soon the economy is in a downward spiral.[...]Of course, at least in theory, this problem can be fixed.[...]But that premise is what has people like Gross worried. In addition to running a budget deficit, Washington for years has had a massive deficit of political will.[...]Whether on taxes, entitlements, military retooling, financial reform, energy policy or climate change, Washington is mired in a political enmity that makes tough decisions nearly impossible.[...]Many careers in Washington have come to an end as casualties of the long battle to restore fiscal balance.[Emphasis mine.]

Unless this political will can be found, in the long run a collapse will be the mechanism to force change. Of course things will get better in the short run, but one must have a long-term perspective to see where all of this is taking us. This whole process started over one hundred years ago, a much longer span of time than any of our lifetimes, and each successive financial upheaval is adding to an end result of economic ruin--nothing new in the history of mankind. If you are over fifty, the usual short-term perspective will hold true in that things will get better and you might not have anything to worry about; but for us younger people, we will be facing a very real economic downturn and upheaval that will greatly impact us and one that will be a mechanism for change in the structure of the world political and economic makeup.

America will face a debt-driven crises unless MAJOR changes are made. This will not happen.

When I spoke to Peter Orszag, the director of the Office of Management and Budget, he expressed optimism that the administration can balance the primary budget -- not including interest payments -- by 2015. The longer-term deficits are his bigger worry. Asked if the political process in Washington is broken, he answered: 'I think it's too soon to know whether the system's broken. The problem is not what happened last year or this year. The real issue is when we move forward in time, something has to give.'[...]'It's becoming immediately apparent that some countries will not do especially well and may not escape the debt trap from the recent financial crisis, Greece and Iceland being the most prominent cases," Gross said. 'But now investors are even looking at the best of the best, including the United States.' That's also the concern of Michael Burry, the investment guru who predicted Wall Street's meltdown and made millions by placing bets against (or "shorting") the financial sector. Burry, one of the protagonists in Michael Lewis's account of the financial crisis, 'The Big Short,' believes the federal government is behaving like the companies that lost billions in mortgage-backed securities. He told me he sees the common mistake of focusing on short-term benefits -- whether quarterly earnings or the next election. The world doesn't want America to go broke, he points out. Americans are the planet's greatest consumers. But if this is a bubble, it will burst with little warning, Burry said. 'Strictly looking at the monthly Treasury statement of receipts and outlays,' Burry said, 'as an 'investor,' you see a company you might want to short.' [Emphasise mine.]

When investors start to loose confidence in America, it will faces the same situation as Greece is.

This is look at America's and the world's future. Well worth the peek at the world's economic future. Are all of these reports overblown? Read some history and learn a little about economics to determine this for yourself. Either way, there will be some economic upheavals coming in our lifetime.

How Public Employees Unions Took Over Government

City Journal has a great article from Steve Malanga titled "Beholden to the State" about how government employees' unions took over the state of California.  He goes way back to WWII to trace the takeover.  A must-read in my opinion. 

Some quotes:

Consider the California Teachers Association. Much of the CTA’s clout derives from the fact that, like all government unions, it can help elect the very politicians who negotiate and approve its members’ salaries and benefits. Soon after Proposition 13 became law, the union launched a coordinated statewide effort to support friendly candidates in school-board races, in which turnout is frequently low and special interests can have a disproportionate influence. In often bitter campaigns, union-backed candidates began sweeping out independent board members. By 1987, even conservative-leaning Orange County saw 83 percent of board seats up for grabs going to union-backed candidates. The resulting change in school-board composition made the boards close allies of the CTA.

and

In the aftermath of World War II, at the height of its influence, organized labor was dominated by private workers; as a result, union members were often culturally conservative and economically pro-growth. But as government workers have come to dominate the movement, it has moved left. By the mid-nineties, the CTA was supporting causes well beyond its purview as a collective bargaining agent for teachers. In 1994, for instance, it opposed an initiative that prohibited illegal immigrants from using state government programs and another that banned the state from recognizing gay marriages performed elsewhere. Some union members began to complain that their dues were helping to advance a political agenda that they disagreed with. “They take our money and spend it as they see fit,” says Larry Sand, founder of the California Teachers Empowerment Network, an organization of teachers and former teachers opposed to the CTA’s noneducational politicking.

Mother Nature and The Man-Made Global Warming Lie.

http://news.nationalgeographic.com/news/2010/04/photogalleries/100402-iceland-volcano-tourism-pictures/#iceland-volcano-tourism-crowds-bluff_18082_600x450.jpg

Maybe you have been watching the news and are aware of the fact that a volcano in Iceland is spueing massive amounts of volcano ash and an overall dark cloud over some of Europe disrupting air travel. At one point, the volcano was throwing seven hundred and fifty tons of material into the atmosphere per SECOND. I am no scientist, but I believe that this ash has the same effect on the atmosphere that man's greenhouse gas emissions have. I do know in that distance past massive eruptions has changed the climate of the planet by blocking the sun etc. There is no way what man can do in terms of putting pollution or greenhouse gases can compare with what nature can do. I read a news article stating that the already struggling airlines are loosing around two hundred million dollars a day. I also read that this is disrupting world trade to some extent. And according to this article the eruptions could just be starting, "For all the worldwide chaos that Iceland's volcano has already created, it may just be the opening act." How does this matter to you? Well, it puts things into perspective. The world is somewhat on edge due to financial crises and the war on terror just to name a few. All it would take is a push from nature to send the world closer to the edge. This shows how little man really controls what is going on and how that nature is really in control. This also shows that when it comes to pumping pollutions or material into the atmosphere, man can not compare to nature.

This also matters because the Global Warming lie is BACK, and just in time for the a new push by Congress to enact its cap and trade legislation, I mean cap and tax and take over of the private sector.

An environmental coalition publicized a new U.S. draft report on climate change on Monday, one week before the expected unveiling of a compromise U.S. Senate bill that aims to curb greenhouse gas emissions.[...]The report, a draft of the Fifth U.S. Climate Action Report that will be sent to the United Nations, says bluntly: 'Global warming is unequivocal and primarily human-induced ... Global temperature has increased over the past 50 years. This observed increase is due primarily to human-induced emissions of heat-trapping gases.'

AGW has already been discredited by hacked emails of the scientist promoting this lie, see earlier post connected with the labels below. The truth can not get in the way of promoting bigger government. The whole environmentalism movement is about the overthrow of the private sector and is being used by governments of the world to increase their power. This whole belief that man is causing the climate to change is also belied by the recent volcanic eruptions in Iceland that is pumping massive amounts of ash into the atmosphere that is far greater than anything man can do. This shows that these people who believe that man can actually have any major and lasting impact on the environment are arrogant and naive--just look at the dinosaurs and past geological upheavals. Man is still very small and insignificant in the bigger cosmic picture.

A New Hero for Conservatives

Item 1: One of the early indications that the country was losing it's infatuation with President Hope 'n' Change was the November '09 elections where Republicans replaced Democrats as governors in Virginia, and surprisingly, heavily Democratic New Jersey.  We now see that that was a precursor to the earthquake that happened in Massechusetts.  The name of the Republican who won in New Jersey is Chris Christie, who was a US Attorney in the District of New Jersey.

Item 2: A consistent theme of RTP&GG is the intractable and devastating problem of exploding government debt caused by unsustainable entitlements granted to government employee union benefits packages, social security and Medicaid/Medicare recipients, and soon to be compounded with Obamacare.  This is not to mention the problem that has been discussed here quite a bit of the ever-expanding size of American government.

It has been generally acknowledged that current and past government leaders have been unable to make any headway against the government unions exemplified by NEA and SEIU.  Numerous RTP&GG posts explain the reasons for this failure, which I won't go into here. 

We cheered Wisconsin Rep Paul Ryan when he stood up to Obama during Obama's attempt to appear bipartisan at his Health Care Summit.  A clearly intelligent, able debater that wouldn't back down.  That's what we've desperately needed to push our viewpoint in the national media.  But as with Obama himself, and, to a lesser extent Sarah Palin, Paul Ryan still has a thin resume.  I think experience is actually going to count for something in the next election as opposed to solely a candidate's ability to flap his or her lips.

Well, Chris Christie doesn't yet have a lot of executive experience, but he's setting himself up to go get him some real quick or die trying:

New Jersey Gov. Chris Christie refused to back down Tuesday from his demand that teachers take a pay freeze and start contributing to their health care benefits as the state teachers union declined to take action against a local boss who prayed for the governor's death.

And here is the nub of the whole great big problem:

He added that the state's system is unsustainable because teachers who contribute $124,000 during their lifetime for their pensions get $3.3 million in pension payments and $500,000 in health care benefits

That's a taste.  Read the whole thing.  Let's be honest: no worker would be happy to see what he's attempting to force on the teachers of New Jersey. But guess what, in this increasingly bad economy, all the rest of us poor proles have already had it forced on us. And whether they like it or not, government employees are going to have to face the music sometime.  The question is whether the nation and all the local governments man-up and do what needs to be done before Adam Smith's Invisible Hand does it for us.  If Christie can rein in the New Jersey unions, particularly with all that goes along with unions in New Jersey, he will have proven that he is a guy who can Get Things Done, which is exactly what Fiscally Responsible Conservatives need.

IF he can succeed in his mission in New Jersey, I think in 2012, he could be a top contender.  I think (again, assuming Christie is successful) a Christie/Ryan ticket would be unstoppable.

However, I'm not a blind follower of Messiahs (well, at least not 21st century ones) and I admit that he still has to follow through with what he's not just talked about, but actually begun.  If the goombas in New Jersey stop him cold, then he's just another Republican governor, not Conservatives Great Big Hope.

Go Big Man!

Capital!

This video is simply awesome. Reminds me of an updated Monty Python cartoon skit:

http://www.youtube.com/watch?v=w6AxxMjkA38

My New Idea

Ok guys I have an idea. Hear me out.

Obviously the majority of people in this country(probably the 80 percent that Jeff was referring to) pay a lot of attention to pop culture more then politics. Avatar probably sculps peoples views on the world more then actual events. What if there was a huge blockbuster movie that illustrates the fate of socialism and what Jeff seems to think Obama and his buddies are trying to pursue? What if I started a campaign to create this multi million dollar budget movie and get it out there? Wouldnt that be cool? Start with grass root fundraising around Portland and got someone to create a website. Any amount of money would be accepted and put in to a secure fund. Make the website legitimate and attractive. Guarantee all money donated would be refunded if the idea never amounts to anything. Keep track of all money donated, who donated it, and how to refund it. Once the fund got in to the thousands and a couple hundred people have donated, it would be easier to get rich people and companies to donate. If the fund ever reached a solid amount it could attract a real producer.

I think the movie could be exciting too. Have actual current political leaders played by actors. Have like Obama now scheming his plots behind closed doors and the have his schemes become reality ten years down the road in an almost 1984 type way. The climax could have RTP contributors fast rope in to the oval office with machine guns smokin and bandanas on our heads.

Its really far fetched but this is America. Anyone can do anything. At least that was the idea.

Is this really happening? And the 10-80-10 rule.

(This is a rehash of earlier comments.) I touched on this in the comment section of the Greece post. It seems like everything the government is doing is for the purpose of destroying what is left of our capitalist economy. What they are doing makes no sense if you look at it from the standpoint of promoting economic prosperity. The Cloward-Piven strategy is "The strategy of forcing political change through orchestrated crisis. The 'Cloward-Piven' Strategy seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse." This collapse that their plan would bring about would be 'a profound financial and political crisis' that would unleash 'powerful forces ... for major economic reform at the national level.'" If these two people were just crazy kooks, this would not really mean much. But these people have been influential to some of our leaders and they are connected to our President. The link above is interesting. How will people react to this crises? This can't really be happening.

Is this plan coming to fruition?

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020,[...]That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.[...]The CBO and the administration expect the deficit for fiscal 2010, which ends Sept. 30, to approximate $1.5 trillion and exceed 10 percent of GDP, the first time that threshold will have been reached since World War II.[...]But they generally agree that budget deficits should proceed along a consistent, downward path as the expansion matures. Most economists, therefore, fear the prospect of rising deficits in the latter part of this decade, long after steady economic growth has returned and unemployment has plunged. [...]For the 2016-20 period, CBO estimates that deficits will average more than 5 percent of GDP, even while assuming the economy will be near full employment, with an average jobless rate of 5 percent during that same five-year period.[...]Deficits in the, let's say, 5 percent of GDP range would lead to rising debt-to-GDP ratios in a manner that would ultimately not be sustainable,'

This is only one of several reports. This basically says that there will be a debt-driven crises within the decade unless major changes are made.

I rented out a book from the library called The Survivors Club. (I heard about it from Glenn Beck.) It is interesting because it points out how various people react to crises. Do you have what it takes to survive a crises? How does 10-80-10 fit into this? We are going through a period of great change now and within our lifetime their will be an even greater change that will be more pronounced. How will people react to this? According to the book, during crises such as planes crashing, ships sinking at sea, or any great period of change from the status quo in our daily lives(this is coming our way) 10% of the people do the correct thing, 80% percent just turn into statues and freeze up and are in denial about what is happening, and 10% do the wrong thing. There is great change occurring now and most people are unaware of it or they are in denial. They are lost in the sauce and will be sweep away by the coming tide, all while humming along to the daily beat of life. About this reaction John Leach states, "Denial and inactivity prepare people well for the roles of victim and corpse." Are you the 80% that will be in denial and freeze up? Do you know what kind of change is coming our way? Do you really even care? How will you react to the coming period of great change or crises?

Baseball is here

The season started of strong yesterday with an entertaining game by the Red Sox and Yankees. There was a lot of offense in a game that ended with a red sox victory 10-7.

Mariners are going to be strong this year. With key additions Cliff Lee and Chone Figgins. Look for them to win their division and make a run for the pennant. You heard it here first.