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Townhall...
Who’ll Volunteer to
Save the Socialists?
By Rachel Marsden
6/21/2011
As a free-market, limited-government conservative, I find the total
implosion of the Greek economy to be the most stunning example of
everything I’ve ever tried to warn about in regard to socialism.
Despite the rest of Europe and the International Monetary Fund
promising last year to give Greece 110 billion euros over three years,
the country remains in a death spiral, with its budget deficit at about
13.5 percent of gross domestic product. By contrast, the last actual
figure for recession-plagued America was at 8.8 percent.
So how did things get this bad for Greece? As IMF negotiator Poul
Thomsen said of the country last year: “(Greece’s) revenues have
declined significantly, while spending, especially on wages and
entitlements, has risen sharply.” There you have it: the definitive
formula for an economic meltdown.
One might think that would have been a wakeup call for Greece. Not so,
apparently. Prime Minister George Papandreou -- a socialist, not
surprisingly -- faced revolts, resignations and defections from within
his own party last week. What exactly is he supposed to do? Shake out
the couch cushions for spare change? The socialists broke the bank and
there’s nothing left to spend. Meanwhile, the IMF and Europe require
the Greeks to prove they’re making significant moves to get their house
in order before handing over the next bailout installment.
The IMF initially recommended the following measures, which have
already been adopted: cuts to Christmas, Easter and summer bonuses for
workers in the public sector and state-owned enterprise. No raises in
pensions or publicly funded wages for three years. Increased taxes on
luxury items, tobacco and alcohol. And Greeks can no longer retire on a
full pension at an average age of 61, having instead to wait until
they’re 63.
Now, the Greek government is set to increase sales taxes and sell
government assets in an attempt to stay minimally afloat. The result?
Riots in the streets.
The world is witnessing, in real time, the total collapse of a
socialist system to the point that the conservatives are now ahead in
the country’s polls. But it’s now a case of too little, far too late.
As Margaret Thatcher famously said, “Socialist governments ... always
run out of other people’s money.” Greece was spending beyond its means
by injecting cash into a public-sector system that wasn’t producing
anything of real value on which it could turn a substantial profit.
When this system slid into the negative, Greece borrowed on credit
until its credit rating tanked and it couldn’t get loans like a regular
country. So Greece tried a Hail Mary pass to Europe and the IMF, which
are made up of countries borrowing money themselves on credit to manage
their own debts.
Where in all of this is anyone actually producing anything that’s
turning a significant profit? Meanwhile, in China, they have enough
cash floating around to buy up the treasury bills of every other
cash-strapped country, thereby stringing them up by the short and
curlies and ensuring the red-carpet treatment anywhere and everywhere
they might wish to go on a round-the-world tour.
So where do defenders of freedom turn when they see how socialism has
turned them into slaves of communism? To the free market and the
private sector they’ve been up until now taxing into oblivion in the
interest of spreading the wealth. You can’t make this stuff up.
On Friday, French President Nicolas Sarkozy and German Chancellor
Angela Merkel announced at a Berlin press conference that they’d like
to offer the opportunity for the private sector -- via banks, insurers
and investment funds -- to dole out some cash on a “voluntary basis” to
bail out Greece, because those 110 billion euros that Europe is
currently forking over in installments definitely won’t be enough, and
none of the countries who might be expected to pony up this new
injection of funds has any more money to flush down the toilet. Sarkozy
adds that this all needs to happen before September, so the private
sector had better hurry up and jump on this most excellent opportunity
to never see their money again.
Oh boy, let’s all hold our breath for the “Peugeot Parthenon,” the
“Citroen Coliseum” and the “Airbus Acropolis.” Meanwhile, Nigerian scam
e-mail writers are probably taking notes in the event this rip-off
actually achieves liftoff: “Dear Mister CEO, Sir: I have city to sell
in Greece! Please transfer $1,000,000,000 to account below and I will
send keys in mail. Many blessings!” Maybe while they’re at it, they can
also bankrupt all the private health insurance funds in Europe in an
attempt to save Greece.
Dark humor aside, the Greek case should serve as a reminder to Obama,
America and every other country led by someone trying to spend their
way out of economic trouble that it will always lead to things getting
much worse. And, as Sarkozy and Merkel have now effectively
acknowledged, the free market is the best solution to economic
difficulty.
Read it at Townhall
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