Tag: Financial crises

Beware Greeks Breaking Bonds

Just recently, I read Michael Lewis’s Boomerang, which includes a long essay on the economic problems of Greece. It’s difficult to describe Greece’s economy without the words “holy fucking shit, dude, are you serious?” but I’ll try.

For years, the Greek budgets were a fraud. The EU rules required them to keep their deficits below 3% of GDP. But massive amounts of the Greek economy are underground. Their system encourage abuse and fraud so that very few people pay taxes and no one thinks they should pay taxes. Government spending figures were made up so that they could comply with EU budget requirements. Their government is large and pays salaries much higher than any other country. And they can retire at age 50 and draw huge pensions. They also have a fertility rate of 1.3, so it’s not like a baby boom is going to sustain this massive wave of retirees.

When you know the details, you realize just how necessary the recent austerity was. Greece was in so much debt and their budget was so out of control, they had to make drastic changes. This wasn’t some evil imposition by imperialistic Germans; this was math.

Well, the Greeks voted today for an anti-austerity party:

Exit polls suggest a historic victory for the anti-austerity Syriza party in Greece’s general election.

The polls indicate that Syriza took between 36% and 38% of the total vote, with the ruling New Democracy party a distant second with 26%-28%.

It is unclear whether Syriza has enough votes to govern the country alone.

Syriza’s Alexis Tsipras has pledged to renegotiate Greece’s debt arrangement with international creditors.

He has also vowed to reverse many of the austerity measures adopted by Greece since a series of bailouts began in 2010.

The result is being closely watched outside Greece, where it is believed a Syriza victory could encourage radical leftist parties across Europe.

The exit polls suggested Syriza had won between 148 and 154 parliamentary seats. They need 151 seats for an outright majority.

(Aside: there are a lot of liberals who think we should have a parliamentary system in this country, mainly because they don’t like Obama being opposed on legislation. This election is a good demonstration of why I don’t like parliamentary systems. Syriza is going to take over Greece based on a third of the vote. The parliamentary system encourages radical minorities to take the wheel of government and spin it madly. I’ll take our gridlock, thank you.)

Fuck Greece. They’ve gotten tens of billions of dollars in help and their response is to whine and cry because they can no longer live high on the hog on a fraudulent system paid for by other countries. Don’t let them leave the Euro; kick them the hell out. Let inflation and default ruin their economy. Maybe then they’ll figure out that you can’t run a country on bullshit.

Maybe other people will too.