Posted on 05/09/2010 9:34:19 PM PDT by george76
What we're seeing in Greece is the death spiral of the welfare state. This isn't Greece's problem alone, and that's why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven't fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.
Americans dislike the term "welfare state" and substitute the bland word "entitlements." The vocabulary doesn't alter the reality. Countries cannot overspend and overborrow forever. By delaying hard decisions about spending and taxes, governments maneuver themselves into a cul de sac. To be sure, Greece's plight is usually described as a European crisis -- especially for the euro, the common money used by 16 countries -- and this is true. But only up to a point.
The welfare state's death spiral is...
Greece illustrates the bind. To gain loans from other European countries and the International Monetary Fund, it embraced budget austerity. Average pension benefits will be cut 11 percent; wages for government workers will be cut 14 percent; the basic rate for the value added tax will rise from 21 percent to 23 percent. These measures will plunge Greece into a deep recession. In 2009, unemployment was about 9 percent; some economists expect it to peak near 19 percent.
If only a few countries faced these problems, the solution would be easy.
(Excerpt) Read more at realclearpolitics.com ...
It wasn’t that the govt taxes too little to cover future obligations..it is a fact that they spent too much of the money that they got on useless projects. If they really had saved and invested the money..well..we wouldn’t have the problem.
So, what does the Welfare State get replaced with? This potentially is not a pretty thought, especially when it collapses on itself, instead of being disassembled by voters.
“If they really had saved and invested the money..well..we wouldn’t have the problem.”
And, if pigs could fly...
Moreover, even if pigs are doing barrel rolls in formation, the welfare state is still theft on a massive scale.
In a show of ‘Good Faith’ California and New York should implement their own currency and they need to do it before they go belly up (which they claim they won’t) we can trade one for one... after that... they can keep their Zimbabwe money, otherwise like a drowning man they will drag us under with them.
TT
A glimpse of our future.
O has created enough new agencies with govt. workers and unions to sink us just n case we survive the other onslaughts.
vaudine
There has also been whispers amongst the politicos that by the time I reach 65 I will have to use all of my money (yeah the savings that I have put away for a lifetime) before I will even be considered for the pension/part pension. There goes my kids inheritance.
I wouldn't mind so much but I have been paying tax for 35 years now and in that time the money that was taken from me did not go in a savings plan to pay for my pension - no it was used to pay a pension for those who came before me and to increase Government coffers.
Cheers (LOL)
Mel
Not useless. Politicians send money their friends way, enabling the politicians and their friends both to fatten their bank accounts :-)
There, fixed it. We need to start pounding the drum and refer to this properly, as the welfare state. It should be quite easy to make the case against this kind of excessive, government spending after the Greek debacle, but RINO's might not be on board with this kind of talk (as usual).
Before it collapses on itself, politicians invite in the dregs of society from third-world countries to try to prop up the system temporarily by taking low-wage jobs off-the-books. This in turn means that when the economic collapse finally does come, its combined with comprehensive cultural, moral and civil collapse and the destruction of civil order. In many cases, foreign powers will try to take advantage of the chaos, and some of those will soon be armed with nucler weapons.
This is what the brilliant "political scientists" have brought us.
As a whole, western societies haven been living on our children’s inheritance. The money that we spent instead of having an extra kid to pay for us in our old age. Call them the ghost generation.
Well put RobbyS - I was hoping to leave my kids something but the way things are going now I might give them the inheritance my parents give to me when they die - they might need it more than me!
And yet the TOTUS-reader gins up the moolah-mil because he knows that Voltaire was right: Once the electorate realizes can vote the treasury for itself, the end is at hand.
BUMP
Thomas Friedman covers the same ground in his column today, however Friedman’s intent is to distract attention away from the welfare state, by confusing the reader about the essential problem.
There wll be no future. It's all being cashed in and spent today.
Exactly!..why is that so hard for everyone to grasp? I wrote here a short while back that Merkel is toast in Germany for agreeing to the bailout and the split second that money is transferred to Greece, IT”S GONE! Well...Merkel’s party just got beaten in a recent election because the Germans know what I know. It doesn’t matter what agreement or pieces of paper the Greeks give anyone. That money is gone.
Nope. Theres a rule of economics that says you can't eat cookies that haven't been baked yet. Government has been living off money borrowed from fools who bought the US Treasury junk bonds, thinking our kids would pay them later, even though it is clearly not possible. Our kids and grandkids will simply refuse to pay. Or the Fed will just print the money to pay them, thereby inflating the money. No default, but they will be "paid back" in monopoly money. I suspect that's more likely than an outright default because it's the easiest thing for the politicians to do.
Government cannot "invest"; only private individuals who OWN their wealth and thus have "skin in the game" can engage in "investment." Everything government does with someone else's money is CONSUMPTION. This is true even if the consumption is presumably a "capital project" such as a road, a bridge, or a power plant.
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