Greece is a drowning man that votes "no" to a life preserver because he doesn't want to admit he can't swim...Razor's Tweet
I had the privilege and good fortune to be stationed at the Air Force base outside Athens, Greece, in the early 1970's. (It's now closed.) Quite frankly, I thought I died and ended up in heaven. The weather was beautiful throughout most of the year. The landscape was breathtaking. The sea was dazzling. The women were gorgeous. And the Greek people were exceedingly kind and friendly. They also loved to "party down." A young guy like me at the time couldn't ask for more.
So I find what is happening in Greece today both sad and disturbing. Nevertheless, even 40 years ago, the writing was already on the wall. The "good life" they were enjoying in the last several decades would eventually come with a price and a cost. Greece is facing an unsustainable debt to the tune of almost 900% of their GDP. And now the creditors are knocking on Greece's door. The Greeks allowed their government to grow too damn big while it's spending was completely out of control. In addition, generous pensions are unsustainable. A whole host of tax evaders as well as corrupt politicians have been playing a dangerous game for years. One glaring example: On the island of Zakynthos, 20% of the population were registered as legally blind. They were entitled to $400/month in disability pensions. But of the almost 700 considered blind, 500 were not. One included a taxi driver (61 of those considered blind were driving their cars) and another a bird hunter. Just as striking, 40,000 pensions were being collected by people who were already dead. (NY Post). The Daily Mail (UK) reported that of 11 million people only 5000 said they earned more than $100,000 a year.
In the face of all of this and more, the Greek people voted "no" to a life-line that was thrown to them. They voted no to more austerity plans that were demanded of them by their creditors in the form of more taxes and cutting generous pensions. In fact, Greece owes about $4B Euros (or $3.5B) that is due by July 20, 2015. As all of this is going on, Greek banks are closed concerned they will run out of money. ATM withdrawals are limited to about $60/day.
It's too early to tell what the final outcome will be for Greece and the global economic market. But one fact is clear. We've also been living beyond our means. When unfunded liabilities (Medicare and Social Security) are thrown into the mix, our real debt is closer to $100T not the $18T now posted. We've also watched as our own government has grown out-of-control along with additional tax mandates. And while our spending is just about 21% of GDP, it is expected to grow significantly in the coming years. Moreover, Greece is yet another example of failed socialist policies. Too much dependency on a government can---like Greece---turn into a tragedy for everyone. Or as Margaret Thatcher famously said---eventually you run out of other people's money.
I had the privilege and good fortune to be stationed at the Air Force base outside Athens, Greece, in the early 1970's. (It's now closed.) Quite frankly, I thought I died and ended up in heaven. The weather was beautiful throughout most of the year. The landscape was breathtaking. The sea was dazzling. The women were gorgeous. And the Greek people were exceedingly kind and friendly. They also loved to "party down." A young guy like me at the time couldn't ask for more.
So I find what is happening in Greece today both sad and disturbing. Nevertheless, even 40 years ago, the writing was already on the wall. The "good life" they were enjoying in the last several decades would eventually come with a price and a cost. Greece is facing an unsustainable debt to the tune of almost 900% of their GDP. And now the creditors are knocking on Greece's door. The Greeks allowed their government to grow too damn big while it's spending was completely out of control. In addition, generous pensions are unsustainable. A whole host of tax evaders as well as corrupt politicians have been playing a dangerous game for years. One glaring example: On the island of Zakynthos, 20% of the population were registered as legally blind. They were entitled to $400/month in disability pensions. But of the almost 700 considered blind, 500 were not. One included a taxi driver (61 of those considered blind were driving their cars) and another a bird hunter. Just as striking, 40,000 pensions were being collected by people who were already dead. (NY Post). The Daily Mail (UK) reported that of 11 million people only 5000 said they earned more than $100,000 a year.
In the face of all of this and more, the Greek people voted "no" to a life-line that was thrown to them. They voted no to more austerity plans that were demanded of them by their creditors in the form of more taxes and cutting generous pensions. In fact, Greece owes about $4B Euros (or $3.5B) that is due by July 20, 2015. As all of this is going on, Greek banks are closed concerned they will run out of money. ATM withdrawals are limited to about $60/day.
It's too early to tell what the final outcome will be for Greece and the global economic market. But one fact is clear. We've also been living beyond our means. When unfunded liabilities (Medicare and Social Security) are thrown into the mix, our real debt is closer to $100T not the $18T now posted. We've also watched as our own government has grown out-of-control along with additional tax mandates. And while our spending is just about 21% of GDP, it is expected to grow significantly in the coming years. Moreover, Greece is yet another example of failed socialist policies. Too much dependency on a government can---like Greece---turn into a tragedy for everyone. Or as Margaret Thatcher famously said---eventually you run out of other people's money.
