A New Idea: Don’t Bailout Greece, or Anyone Else for That Matter.
by Veronique de RugyGreece is in big troubles. Its economy is in bad shape, its debt is massive and its future is quite bleak. Interestingly, other European nations do not seem very eager to come to its rescue. The 27-country EU block, led by Germany and France, have promised some support package for the country but it comes with strings attached and a lecture on how Greece must get its act together by slashing public sector wages and other spending.
Yet, instead of being grateful, Greece’s prime minister, George Papandreou, is mad as hell. First, he refuses to be treated like a lab animal (hey, I am watching to see what a country’s collapse looks like). Second, it’s not its fault. According to him, it’s the fault of the European Commission “for failing to crack down on the previous conservative government’s “criminal record” in falsifying statistics.”
Remind me, where have I heard that the previous administration is exclusively to blame for the sad fiscal outlook of a country?
What would happen if the EU failed to extend a bailout package to Greece and if the country went bankrupt? There isn’t any doubt that, if Greece defaults it be painful and it would have very ugly consequences for the people who invested in that country. Not to mention the consequences this fall would have on Spain, Portugal and Italy.
However, I agree with Cato Institute’s Dan Michell when he argues that no matter what the cost of defaults would be, there would be even more painful long-term consequences for bailing Greece out. He gives four good arguments:
1. Bailing out Greece will reward over-spending politicians and make future fiscal crises more likely.
2. Bailing out Greece will reward greedy and short-sighted interest groups, particularly overpaid government workers.
3. Bailing out Greece will encourage profligacy in Spain, Italy, and other nations.
4. Bailing out Greece is not necessary to save the euro.
Read the whole analysis here.
For these reasons, I am also against bailouts for state governments, the automotive or the financial industries and other interest groups that Washington is always on route to bail out.
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60 Comments
Reward failure and you will get more failure.
It's a simple concept, but hard for many to grasp.
I wish we would not have bailed out anything
Yes it would have hurt but we are still going to feel the pain
Only with a whole lot more DEBT
Bailout Greece?
I thought Greece was too big to fail?
We are next.
I consider myself a Patriotic American, but I wonder just how long China is going to buy our junk bonds and worthless Treasury instruments. I wouldn't buy them, even on a discounted bet.
Indeed so. It's not rocket science.
But, as they say, "there are none so blind as those that will not see."
Failure – having to take responsibility for it, is the ultimate oversight function.
Notice there need be no government action to facilitate this.
This is the test case for california. Whatever the collapse portends for Greece will ultimately gauge the prospects for 'saving' California. I for one am not willing to have the Communist Regime of Obama reach into my pocket for those petulant Progressives that have destroyed one of the largest economies on the planet.
I actually am referring to California……sorry for the confusion.
Greece really isn't at the same level as most of the rest of Europe. We do owe Greece a lot in terms of historical significance but certainly not enough to start bailing them out of their own big fat mess. (Especially when we all know, if we do, it's going to go right back to being a big fat mess in short order.)
The Euro was a bad idea from the start and one that should be gotten rid of as soon as possible. Of the many perils of the Euro one that has hit my family is due to the exchange rate between the dollar. Exported goods are now more costly and that has hit them very hard. (While parts of Europe like to bash Americans consistently, the sad fact is we need Americans to buy things.)
So, who's going to bailout the taxpayers…?
China will keep buying our Junk bonds so long as they can continue printing junk Chinese currency now used to inflate their assett bubble. China has cities full of empty buildings and appx. 25M new workers who need jobs year after year. Most of them can't find wives because of the 1-child policy where parents abort daughters.
What do you do with a lot of 20something males who can't find work? – It's not going to be pretty.
What's happening now is NOT American Crack-up, It's a coming American CRACK DOWN on stupid – global warming stupid – OUT, No drilling stupid – OUT, Public employees feeding at the public trough stupid – OUT – Just like the Jacksonians in the Early 1800's, the Tea Partiers of 2010's are going to fix what's wrong –
It will be messy, but it will get done – we're taking the mop from Obama & the progressives and we're going to fix the problem – where apprpriate will sharpen theh end of the broom and place where progressives have the most 'feeling' for the teabaggers
Obammy and his Mammy.
And this time it WON'T be a socialist mop!!!! FOR SURE!!!!!
China is backing off-
"China's US bond holding decline was also its biggest drop since August 2000 and allowed Japan to regain its position as top holder of American government debt after a 15-month hiatus.
Japan's holding increased to 768.8 billion dollars in December from 757.3 billion dollars the previous month, Treasury data showed."
But you must understand that what has been DONE to CA has already been DONE to the US! Remember those behind CA's demise Pelosi, Boxer, Waxman, Waters, Feinstein etc are doing the same to the US!
I'm going with Dan Mitchell on this one. And while he is at it the White House ought to sit down with him.
I like the way he thinks…
Greece is too extravagant for it's revenues. Fire public workers and lower their pay. America do the same.
(hey, I am watching to see what a country’s collapse looks like)
When one stops to think about how truly sickening it all is the reluctance to watch is offset by the fact that it is not my mess. I didn't cause. Hell. I wasn't even born when these sinister jokers were getting their heads shaped.
So I'm with you. We are watching history. We don't have to read about it in the future and wonder what really happened. I know god darn well what happened. What is going to happen next is all that matters right now.
If you are not digging in and deep to figure out how to get on the other end safely NOW- or with fresh new net liquid – then this next downdraft may leave you with few options and fewer good options. Allow me to use a word how it is defined by Webster and not by POTUS' writers.
UNPRECEDENTED!
Spain and California. They make Greece look like a bag of rubble. Let the games begin? No. Let them end.
How's this for poetic irony: Americas economic situation under the democrats and Hussein has become so unsustainable, mainly due to spending deficits, that we wouldn't be allowed entry into the EU. That's right, we're essentially on par with basket case nations.
The democrats have ruined this economy and in the chaos siphoned off taxpayer dollars to their union supporters and cronies. Someone explain to me why democrat politicians should not be executed.
They could always liquidate and sell off the assets…
I'm sure there's plenty of Greek art and objects that could come up for sale…I'd like to see after some stuff from Troy, myself, for the right price…stuff the Athenian junk, though…
Though it might be fun to own Olympus…me, Zeus…you, peasants…get to work…!!
If they are going to have a Greek yard sale, I'd take a jar of olives and a purty gal.
If I remember correctly Greece just needs a little windex sprayed on it (From My Big Fat Greek Wedding)
Gentle Readers,
It was be bad for bondholders holding Greek paper to lose money, but one good effect would be that people would start holding Bond Rating firms and underwriters who misrepresent the quality of these securities responsible for their misconduct.
This would help prevent future defaults. Rating firms should insist on good accounting and transparancy from governments and financial firms. Creative accounting, opaque financial practices and compliant Bond Rating firms are a big part of the reason we're all in this mess!
Kindest Regards to all,
I am,
John Lepant
Brighton
Colorado
I have been preaching this for over a year.
Finally, someone with some credability is preaching it also:
http://www.ft.com/cms/s/0/c918b8dc-1b37-11df-953f...
There is more than Greece going to collapse. WE will, if we do not get our house in order.
Dear Republicans:
I want to send a thanks out to the 34 senate republicans and 91 house republicans who voted for TARP, and finally Bush for signing it into law. You guys are awesome.
Yours Truly,
Knoxs
I notice you didn't thank the Democrat Majority controlled Congress – the entity in charge of spending taxpayer dollars.
Gee why would that be?
U.S.S.R. circa 1989
It's coming….
Katie bar the door. The U.S. economy will collapse, government can default or inflate and will choose to inflate. Below you can view what happens in times of crisis:
national guard confiscating guns in New Orleans POLICE STATE IN ACTION, SOLDIERS FOLLOWING UNCONSTITUTIONAL ORDERS WITHOUT QUESTION
http://www.youtube.com/watch?v=sm5PC7z79-8
Been quite a few preaching it, even before the housing crisis but they received nothing but ridicule on the News stations.
Peter Schiff comes to mind, maybe Gerald Celente….
Peter Schiff was right you tube videos are classic.
Peter Schiff was right! lolololol
Greece recklessly spends itself into insolvency, then gets mad because no one wants to bail it out. Simply amazing.
This political resistance to allow corporations and countries to fail is a primary source of the world's economic problems. Nothing should be "too big to fail". Budgetary constraint should be re-introduced into the global dictionary, especially in the US.
How is it that cities,counties,states,countries and Unions(EU,USA…) can spend more than they receive, but when you or I do it, we are fined??Just more of "do as I say, not as I do."
Could I bid on some columns for my garden?
I want to find Soros bank accounts & confiscate them
The American taxpayer is the slave of the world? Time to stop that.
The administrator for the Madhoff bankruptcy was exercising an option I hadn't heard of previously called
'claw-back'. He was going back to reclaim money from people who Madhoff had paid large amounts, unbe-
knownst to them, fraudulently. The monies were owed them, but because the whole scheme was a fraud
their legally earned monies were subject to pooling with the whole bankruptcy. Sorry, too long. The point,
let's go after the money, it hasn't been burned, it's just somewhere else, we can find it & get it back. Start
with the Andy Stern, Soros, etc. all bozos' friends. CLAWBACK
Not on the 15th and 30th in any larger Township
Breaking News Popandrous or whatever spotted rubbing Barry's shoulders in a dark DC alley. Both complaining about tthe previous guy. The one we are beginning to really miss. Cry babies get tough or get out especially you Barry. What we have here in this country is easy to fix, but not if you want to own the country. Here is an idea Barry resign and get the hell out of every solid Americans way. Yeah. take the msm with you. we have nof further use for the a—-holes.
Grasp the full import of what you just said. The California economy dwarfs that of Greece……….
In Illiberal/Regressive world, those with the deepest pockets are most likely to become political pawns.
It might take a collapse just to get the house in order. These idiots won't listen until the checks start to bounce.
Then we will find out for sure who is essential and who is non-essential.
Leave the Greek pantheon alone and stick with the Norse would you? You are Thor's Hammer, not Zeus' Hammer!
If you want to get less of something, tax it.
If you want more of something, subsidize it.
We have been subsidizing failure.
I remember that Athenian tradition of suspending your right to vote if you are unable to pay your taxes……
Substitute California for Greece. The only thing that saves us here is 66% required in State senate to raise taxes. Democrats are calling for a California Constitutional Convention to rewrite constitution. They give a variety of reasons, but what they really want to do is make it easier to raise taxes, especially on realestate.
Who is having a cow over the Grecian predicament? The government employees unions and the central EU bankers. Why? Because they have a vested interest in keeping central planning, monetary policy, and institutionalized sloth at situation STATUS QUO…
China is not buying our junk and others are losing their appetite for our debt. CNBC's Rick Santelli gave the latest treasury auction a grade of F.
This is what a country collapse looks like:
http://ferfal.blogspot.com/2009/03/argentinas-eco...
[...] Update 2: More reasons to oppose bailouts. [...]
the printing press.
Let Greece go under. Any aid package would be fodder for the resentment of the far-left. It will show the world the debt party is over.
When firms fail others rise up to take their place. It's a way to thin the herd of the weak and inefficient
I was talking to a fellow from Ireland about how his country is getting screwed by the Euro, and how the cost of basic goods and foodstuffs is much higher than before.
One thing I'm curious about, is if the rest of Europe finds itself in a massive debt crunch, are individual European states able to print more Euros and inflate the currency in order to pay down their debt? If they aren't, then I think it's a good thing. Inflating the currency only postpones the fall, and means it'll be much more painful once hyperinflation sets in.
Everyone who keeps talking up China as being the next economic superpower is missing the inherent structural flaws in the Chinese economy. They are facing a demographic crisis of major proportions.
What's sad is that the cradle of Western Civilization is now reduced to this. Let them fail, and once the Greeks get a cold dose of reality, let them get back on their own two feet. They've got potential. They're still the world's larges commercial shipping nation, with a fleet of over five thousand cargo vessels.
Never let a milieu get in the way of a bargain…!
The 2004 Olympics played a MAJOR role in Greece's downfall. i'm real glad Chi-town didn't get it. Between Obummers shady land owner friends who stood to rape billions more from the tax payer,and the financial risk of hosting these games…America needs to put her house in order long before we ever considering hosting another Olympics…and besides….does anyone really bother watching them at all anymore too start with??
Gee, Socialism fails again……….who woulda thunk it!
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