Nick Anderson for July 07, 2015

Just like what will happen in the us if you live beyond your means and borrow without a proper plan to payback you’ll suffer for it. Other EU nations sacked it up and lived with austerity so should the Grecians.

Spending more than what you produce. Sounds familiar……….The Congressional Budget Office gave us a glimpse on Tuesday.The non-partisan government agency released its annual “Long-Term Budget Outlook,” crunching the numbers to figure out what current government spending will cost us 25 years down the road. Its findings are, in a word, terrifying.The CBO estimates that the federal government will continue to spend significantly more money than it brings in through taxes — hundreds of billions every year, to be precise.As a result, America’s national debt, already at more than $18 trillion, is going to grow faster and faster.Over the next 10 years, the CBO projects that Washington’s wasteful spending will add an additional $7.4 trillion to the debt.By 2040, America’s national debt could rise to well over $54 trillion — more than triple what it is today.What does this mean for the rest of us? In short: slower economic growth, higher taxes, lower incomes and a government that can’t afford to fulfill its most basic responsibilities.http://news.investors.com/ibd-editorials-on-the-right/061915-758144-federal-debt-growing-faster-beyond-18-trillion.htm#ixzz3fBXT0g6h

No one forced the Greeks to borrow all that money. Why bail them out again if they spit in your face every time ?

@Darsan54 – I read that article and it’s a mixed bag at best. I’m willing to entertain the elimination of R&D tax credits (which don’t exist right now – They haven’t been reapproved). But retirement fund bank fees? (So the bankers that manage your retirement fees should do it for free?). Overpriced medications? (You expect the drug companies to give away their new products?) How would they pay their workers?And if the taxing system were fair you wouldn’t find so many people trying to offshore their savings out of the reach of government.

We can fix all of the government side of the $6000 by switching to a deductionless and all encompassing sales tax.

But I would not support any of the private side modifications that this article encourages.

Atlas is Shrugging people. Those of us who pay upward of 20% of our income in Federal tax (Not SSI and Medicare that’s on top) are getting sick and tired of carrying a bunch of takers who piss and moan that they aren’t getting enough cost of living increase in their government handouts.

I’m not anti tax. I understand that the Government needs funds to provide services but those funds are being squandered on handouts rather then being used to make America more competitive. Dollars spent on Welfare are dollars that don’t get spent on Roads, Telecommunications, Schools, Parks, Ports, Airports, Rail Depots, tearing down foreign powers trade barriers etc.

What Austerity really means is that the poor and needy in Greek will have to do with less. This is the result of undisciplined and uncontrolled spending.

@Ted – You and I are in complete agreement on the Military. I think we should cut it by a quarter and use ALL of the savings to improve infrastructure at home.

And money is fungible – Anyone with a computer and a little bit of time can set up methods to keep their money out of the sight of the Government (Think here – Bitcoin).

The days of the government being able to tax Wealth are over. I know the liberals love to play Robin Hood but that only works for the slow and stupid rich (a rare breed indeed).

It’s high time we do away with the Income tax and switch to a transactional tax like VAT or Sales. Increasing the perceived fairness of the system would go a long ways towards convincing people that they should be paying their taxes. When 48% of the population get to turn out their pockets and say they are too poor to support their government, the other 52% get to feeling fleeced not patriotic.

This makes no sense. Austerity IS the status quo.

@Cerabooge – Hardly. Greece was given a road map to getting their fiscal house in order including: Reducing Pension costs and increasing taxes. They chose to thumb their nose at Europe and the IMF assuming (much like the Lehman brothers) that someone would bail them out so they wouldn’t have to face the consequences of their foolishness. They whined and sniveled about how hard the IMF was being on them but they really didn’t make substantive reforms.

Now they are paying the price. The very people that Greece claimed it was trying to protect: The poor, the needy, the umemployed; will now be the hardest hit by the Greek banking collapse.

There is a moral hazard to rescuing the foolish from their own folly too many times. You teach the foolish that their really are no consequences to bad acts. I want Greece to serve as a morality play for Americans who are acting just as foolishly but have a bigger bank roll to deplete before they fall into the same problem.

Detroit was a good example, Illinois is right behind them and the USA will be next if we don’t get our fiscal house in order. I’m willing to accept higher taxes as long as I know that they will go to benefit everyone (Roads, Telecommunictions, Infrastructure in general). I’m not willing to pay higher taxes only to see them used to pay Welfare to the poor and corporations.

Mephistopheles: from Wiki; “9 February 2010 – The First austerity package is passed by the Greek parliament. Measures include: a freeze in the salaries of all government employees, a 10% cut in bonuses, and cuts in overtime workers.” IMO, 5 years is enough for austerity to become the status quo.

@Cerabooge – The moves Greece took were a small portion of what was expected of them and then they back slide only a few years later. They outright rejected Austerity last year. They are in their current position because they refused to accept the guidance of the IMF.

@Marten – On Point 1 – you have read me correctly. I do not blame a lender for the trouble a borrower gets into. I won’t shed any tears for a lender that agreed to lend without collateral but I also won’t shed any tears for a borrower (Greece) that can no longer get credit without stupidly high interest rates because it has acted irresponsibly with credit.

On Point 2 – I didn’t assert that Greece didn’t make any concessions – I said they refused to do what was expected of them by the IMF (Though I agree you could imply your assertion from my wording because it was poorly chosen). They made a half hearted attempt to rectify their own issues and then when that failed assumed they could return to their profligate ways. It was a recipe for disaster motivated by the lure of socialism and now they are going to get what they so richly deserve.

On Point 3 – Moral Hazard must always be taken into account when deciding whether to help out the foolish and the stupid. And you are absolutely incorrect to say that it is not supported by psychological and behavioral studies. Drug counselors will tell you that families that keep bailing out their loved ones from the consequences of their self destructive behavior RARELY if ever get them to change their ways. Living on Debt is a self destructive behavior.

It also sends the wrong message to the other countries that are watching this closely: Ireland, Portugal, Spain and Italy are all watching to see if the EU blinks so they can continue live profligately at Germany and France’s expense.

Atlas is Shrugging People – The Thinkers and The earners are tired of supporting the indolent and the takers. Greece will serve as an Excellent Morality play for many nations.

the Greek problem is coming soon to America.From the top down, elected and appointed officials use government power to spend money that does not exist,to keep voters voting for the Liberals.-From the bottom up, the citizens vote for candidates promising the most…..and never complain about the federal debt, the state debt, and local debts.-La La Land.Filled with crooks. In government, and outside government.And “accounting day” is coming.

Martens is fed up: i think when I want to say something, I’ll just link to you; you do a much better job than I could. (Oh, who am I kidding. I’ll insist on throwing in my .2 cents occasionally. ;-] )

Thank you for your excellent comments.

@Martens – So the IMF admitted mistakes; that doesn’t mean you throw out the baby with the bath water. If your financial advisor tells you that you need to save x% and spend y% less and you can’t do that; you don’t then say well I won’t spend any less and I won’t save any more. Giving Greece a pass on their own unwillingness to control their spending and their debt repayment is sheer foolishness.

I don’t value property more then human life but that doesn’t mean I give people a pass when they try to steal property from someone else. Borrowing money that you can’t repay is no different then stealing and that is what Greece has done. Germany loaned Greece money with an expectation that they would use the money to improve their financial situation and put themselves back on a path to solvency. Instead the Greeks squandered the loan by living beyond their means and making little investment in their economy.

Nobody is punishing Greece except Greece. They have made bad choice after bad choice and now know one trusts them when they say “give me more money and I will repay it.” The fact that they will suffer for their own bad choices makes them an excellent morality play. I point to them the same way I would point out an umemployed high school drop out to my kids and say – "Those are the consequences of making bad choices so make sure you make the right choices.

I’m not even sure what to do with your Marathon analogy. Nobody Kneecapped Greece. You keep acting like they were somehow set upon by the other countries. They did this to themselves. They borrowed the money and failed to discipline themselves to use it wisely. Now they can’t borrow any more money. In the process they have dragged down the rest of Europe, several stock markets, and are decidedly unrepentant. They should be kicked out of the EU and forced to issue their own currency for everybody else’s sake. Then lets see how they support all those bloated pensions with a worthless currency.

I’ll say it again – Ireland, Portugal, Spain and Italy are watching this closely and God help us if they see the EU blink and say oh we’ll keep supporting stupid decisions. Then the EU will collapse and everyone will be in the same boat.

I admire your compassion. Believe it or not I feel bad for the people who will suffer through no fault of their own. But anyone who voted against austerity in Greece did this to their fellow countrymen. Not Germany, Not France and Not the IMF. Those who thought they could vote themselves a better standard of living by borrowing from others did this to the country. Those who failed to pay their rightful taxes did this to Greece. Those who were net takers from the Greek Economy did this to Greece.

Before you wrap yourself up in your moral superiority though – Please ask yourself. How much compassion do you have for the other poor people across the EU who will get even less so that Greece can get more. It really is a zero sum game unless you can convince the rich in other countries to voluntarily lower their standard of living so that this debtor nation can continue to arrogantly declare they won’t do the right thing.

@Martens – Yes but hopefully, in dialog, you will see the damage “your way” does to average citizens.