Nothing predicts Americans having to reach into their own pockets better than a Europe trying to save itself. Member states of the EU are coughing up about one trillion dollars of their own money to bail out Greece, Spain, and Portugal. Stock markets rallied on the news, and Europeans congratulated each other on their short-sightedness.
The reality of course is that the euro is on the verge of collapse. The bailout was hardly a help, any more than giving a drug addict $50 will keep him from asking you for more, possibly in a more violent manner, next time.
Yes, the EU members are certainly calling it a bailout, going on and on about how this will build an insurance policy against economic collapse. It can achieve no such thing, of course, because what triggered the Greek crisisand is fueling the Spanish and Portuguese criseshas nothing to do with a shortage of cash. It has everything to do with a negative cash flow.
You were brilliantly warned about this weeks ago. And guess where?
The Czar would like to simplify the problem for you. We admit the situation is much more complex, and this is something of a reductio ad absurdum explanation, but the situation is totally absurd to begin with. A lot of this is left out, but this is the simplest way to put it.
Government workers in Greece get paid better than private sector employees.
Private sector workers pay for government workerss salaries through their taxes.
If private sector employees vastly outnumber government employees, this is not a big deal. A private sector worker only has to pay a portion of a government workers salary; other taxpayers cover the rest.
But in Greece, thanks to rampant liberal and socialized programs, goverment workers outnumber private sector employees. This means for every taxpayer in Greece, there is a full person plus part of another to be compensated. So a private sector employee making $60,000 a year theoretically has to pay about $80,000 a year in taxes to pay for all these employees.
But still not a problem for liberals! Because you can always force the rich to pay millions in taxes to off-set that. Except, thanks to generous pensions and outlandish government benefits, even the wealthy could not keep up with the growth.
So the government went belly up. Now in a smarter country, the solution is quite simple. You scale back government, wipe out the government-sector unions that inflate the costs, eliminate programs, and basically get it back to where you have more private sector employees getting paid better than a handful of government employees, and everyone makes money again.
This was Europes assumption, too. But Greece, spoiled beyond redemption by Communist influence over the last seventy years, refused to give up their ill-gotten booty. Europe threatened them: no financial assistance until you reform your outrageous spending. And Greece told them to go stuff it: give us the money, bitches.
And Europe, in her typically cruel and heartless fashion, simply gave them the money. Here is where it will go: straight into the pockets of the government unions. And in a few years, we will be right back in the same situation, although much worse…because, by that time, Ireland, Portugal, and Spain will be holding their hands out, as well.
Ha, you say: serves them right. Except that our government is already assisting in the bailouts. And the private sector, as exemplified by the powerful performance of the stock market in the last couple of days, is helping by watching stock prices soar in response. This will naturally create the next bubble, which will pop into the next recession right around 2012-2013.
The liberals seem to like socialism because they simply do not grasp basic money concepts.
Божію Поспѣшествующею Милостію Мы, Дима Грозный Императоръ и Самодержецъ Всероссiйскiй, цѣсарь Московскiй. The Czar was born in the steppes of Russia in 1267, and was cheated out of total control of all Russia upon the death of Boris Mikhailovich, who replaced Alexander Yaroslav Nevsky in 1263. However, in 1283, our Czar was passed over due to a clerical error and the rule of all Russia went to his second cousin Daniil (Даниил Александрович), whom Czar still resents. As a half-hearted apology, the Czar was awarded control over Muscovy, inconveniently located 5,000 miles away just outside Chicago. He now spends his time seething about this and writing about other stuff that bothers him.