Anyway, Greece announced its $145 billion rescue plan from the EU and IMF, which is supposed to stave off bankruptcy and stop investors from further panic with other European nations on the edge of disaster: Spain, Portugal, Italy, and Ireland. In return for the $145 billion bailout (as Hot Air notes, this is 1/6 of Obama's Porkulus package), the Greeks are being severely hobbled:
The agreement is a financial lifeline for a country staggered by repeated budget deficits and economic malaise. In exchange for the loan, Greek government officials have promised to continue an array of reform measures that, among other things, already have cut pensions and raised taxes.These aren't just little hardships:
The proposed cuts in Greece include a new round of reductions in salaries for state workers, more flexibility to fire them, an increase in the value-added tax from 21 percent to 23 percent, and higher taxes on fuel, tobacco and alcohol. More state-run industries are expected to be privatized, and military spending will be slashed.There are two questions: 1) will the Greek people stand for their financial disciplining? & 2) will it turn things around even if they can stand it? Read the Hot Air and Washington Post links to learn more. Hot Air's summarizing paragraph makes an interesting point:
American voters might be interested to see the scope of this bailout. It’s about a sixth the size of Porkulus, the Obama administration’s efforts to stimulate our economy, and just a little over a tenth the size of our annual budget deficit — and yet the EU and IMF have just about exhausted themselves to provide it. If we don’t fix our own problem, no one will be coming to our rescue.
This whole event is a near-perfect microcosm of where the whole world is headed.
ReplyDeleteOn the point of no one coming to America's rescue, here is a great article posted in comments on the previous post. http://www.americanthinker.com/2010/05/americas_growing_vulnerability_1.html
It is amazing that the unions will not agree to cuts and they are protesting the EU and the IMF, the very hands that are feeding them. This shows how dangerous it is to get people dependent on the government: they don't want to give up that dependency or benefits. This is just as addictive as any hard drug. This shows the dangers of allowing oneself to become dependent on the government: you will fight tooth and nail to maintain this flow of free money and benefits.
Note how these dependent people are reacting, and note the fact that the vast majority of Americas are quickly becoming dependent on our government. Either you believe in the cause which is the Cloward and Pivens strategy or not, it or the same effect/stragedy minus the cause is happening: "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.'"
Is it possible that this Greek thing could be a good thing? I know they are raising taxes to make up for it but they are slashing government payroll. If they become more fiscally conservative and it works out then maybe this microcosm will stand as a good example.
ReplyDeleteYes, it will be a good thing if they can do it. It will speak well for the EU and IMF if the plan they worked assists and guides the Greeks out of their mess. Like I've said before, the restructuring will happen one way or the other. The only question is whether it will happen in an orderly, civil way with people realizing they need to make sacrifices and then carrying through with them before everything falls to pieces, or if it will happen because the whole system becomes unstustainable and falls apart. It is/was about to do that in Greece.
ReplyDeleteI'm not entirely sold on Jeff's Cloward-Piven strategy. I think the gradual enlargement of government and corresponding dependency and sloth of the people is not necessarily an intentional thing: certainly there are people with that intent, but the great number of people in government and the populace are not trying to do that. It's better explained with the concept of 'paths of least resistance', doing what is expedient/easy/lazy man's answer, and getting someone else to pay for what you want.
I think in the short term the bailout of Greece by the EU and the IMF will be a good thing--although the global markets today did not think so down some 2.6%. I believe that this bailout will prevent any real change in the overall direction that the EU is headed in and that it is the EU is building a weaker economic foundation. Remember that Greece is not the only country facing problems. The others are the PIIGS. And I think that Greece should have been allowed to fail. Of course the EU wanted to maintain its image and its overall self ahead of any sound economic decision.
ReplyDeleteOn the CP strategy, like I said the cause is really not that important. The fact is that the system is being overloaded by too many demands and this is hastening the downfall of capitalism. Of course the vast majority of people in governments are not involved in some grand scheme. Most probably believe in what they are doing or they simply want to stay in power. I do believe that the governments do take advantage of the "sloth of people" or human nature to enlarge themselves, and the people that these ideals came from knew what the end result would be. This is why the founders knew enough about human nature and natural law to create a Constitution that restrained human nature and prevented it form being used or allowed to create a tyrannical government. Of course this involves tracing things back to their primary---Aristotle stuff. Human nature is part of the cause of what is happening, but it is also used and twisted to fulfill government's goal of looking out after their own Self Interest of enlarging themselves. Who is behind the protest in Greece? Unions and a lot of socialist or communist organizations. You should check out the basic thesis of the book _The Coming Insurrection_. How will or how can the left create their utopia without first getting rid of the existing system? I think that human nature is the primary cause of the problem, but that it is used by governments to enlarge themselves. Read the article in my 1st comment and you will see that as a result of this overspending by governments, that there is no backstop to deal with any sudden crises and this will be a prime opportunity for organizations to take advantage of the situation and carry out their goals. One must understand the cause in order to solve the problem. And this is exactly why the problem will not be solved: people don't know the primary causes of it.