By Richard Billies of www.AllThingsPoliticalToday.com
Today, before our very eyes, we are witnessing the destruction of a modern industrial state. That state is Greece, the birthplace of democracy. Greece is starting to show all of the signs of a failed state. The forced austerity measures of the Euro-zone powers are destroying the Greeks will to recover from an ever more rapid death spiral of unemployment, lower tax collections and an overburdened government support system.
The Euro-zone powers, Germany and France in particular, have forced the Greek government to cut spending and raise taxes in the middle of what is the most severe downturn to hit Europe in decades. With the spending cuts have come layoffs and a hiring freeze of government workers. In the public health sector there has been acute shortages of everything from bandages to syringes. Operating rooms have been mothballed due to lack of qualified personnel.
The safety net of government assistance has been slashed, along with pensions, jobs and services. With the loss of public confidence, consumer spending, the biggest driver of the economy, has plunged. This has caused cascading losses in private industry, causing even more job losses.
The president of the Federation of Greek Hospitals said that doctors in this country no longer believe that it is just a financial crisis but it is a humanitarian crisis. Rates of homelessness, suicide, crime and HIV cases from intravenous drug use have jumped with the increasing financial problems.
Meanwhile, the Euro-zone leaders continue to pressure the Greek government into quicker budget reforms and a deal with bondholders to restructure their debt voluntarily. In a Jekyll and Hyde performance they also agree that there is a need for steps to combat the slowing economies of Greece, Italy, Spain and Ireland.
They appear to be falling into the same trap as the Obama administration has led the United States into, that government is the answer to all problems. All that they need to do is look across the Atlantic and see where a massive economic stimulus has gotten America. If they’re looking to increase their national debt then that’s the way to go.
Yes, we know that the Greeks are to blame with runaway borrowing for wildly extravagant social programs but this medicine just may kill the patient. What if the Greek workers explode in violent revolution? Will Germany send in troops? Shades of 1941! Will it spread to the other patients in the Euro-zone medical ward?
You can push people only so far before they will react. The expression “Rome wasn’t built in a day” has been around for so long because it’s true. Greece’s problems cannot be corrected in a year. This could take years or no time at all if the Greek state dissolves into chaos, anarchy and default. Accord to the Greek prime minister default could come as early as March while hedge fund managers believe that it is inevitable.
This on-going Greek Tragedy should be a lesson for our up-til-now myopic politicians who continue to kick the debt and deficit can down the road while they search for the magic bullet. There are no lotteries for countries, only for people.
- Aerial viewing of Greece (antiworldnews.wordpress.com)
- Will Greek Haircuts Stop at 50%? (ritholtz.com)
- The Coercive Greek Restructuring Is Now Imminent: UBS Explains What It Means For Europe (Hint: Nothing Good) (zerohedge.com)
- Greece warns it may have to abandon euro (macleans.ca)
- Greek Bailout Threatened as Bondholder Agreement Lags (news.firedoglake.com)