Online news feeds are running frequent reports about the financial situation in Greece, which has now spilled over into the political arena. I’m watching with renewed interest because: (1) we’re taking the family there in three weeks, and; (2) it’s a probable preview of what’s going to happen here if we don’t quickly and decisively put our own house in order. Greece, ancient birthplace of democracy, is now deciding whether people have sovereignty or must literally surrender it to a foreign central bank and financial complex.
As crowds in excess of 100,000 protest before the Vouli ton Ellinon (Hellenic Parliament) in Syntagma Square and the random tear gas canister is tossed around like a hackisack, I’ve started monitoring the State Department website for any official travel advisory. While we’ve saved and planned for this Italy/Greece trip for two years, we also purchased trip insurance with an eye toward the greek situation. The kids are hepped for Santorini and Athens, but wafting tear gas isn’t as appetizing as fresh baklava. The second that we see a travel advisory, that portion of the trip will either be changed or abandoned and we’ll fall back to the trip insurance.
While not as visceral, Greece’s economic predicament also causes real concern since it’s a likely preview of coming attractions in this country. The MSM line is that Greece brought it’s present circumstances on itself with excessively generous – and unsupportable – social benefits. Combine that with tax evasion as a national pastime second only to soccer and there’s a recipe for fiscal disaster. Americans are used to contending with the IRS so there’s no sympathy for people who avoid taxes like a vegetarian avoiding a Big Mac. This combo was the situation when Greece was admitted to the single European currency – the Euro – in 2000 and in turn gave up their own currency, the Drachma.
This move promised benefits, but came at a price. Member European nations had to agree to controlling both their inflation rates and their national debt load as a percentage of their respective GDP. While this wasn’t a problem for the Northern European countries, it was understood that the PIGS in the south (Portugal, Italy, Greece, Spain) would have their work cut out for them. Unfortunately, not only did the Greeks not meet their requirements, but it then became known that they engaged in sophisticated currency manuevers with Goldman Sachs to hide the amount of debt owed. Their national debt was several times higher than had been previously reported, thanks to the GS folks. For a better illustration, picture GS as the guys who worked with a contestant on The Biggest Loser to rig the scale, so that the winner only lost 100 pounds instead of the 225 previously reported. Big eaters that they are, the Germans were truly torqued.
As global business slowed in 2008, the Greeks were caught in a bind. Their spending required more foreign loans but the lenders were in too deep to take any further chances and this subsequently shifted the focus from private foreign bank lenders, who were as holed as their American counterparts, to the European nations and the European Central Bank. The present riots are because the common Greek now sees their personal and sovereign futures as hostage to the whims of the monied minority, the plutocracy. The lenders want to assure repayment and demand a rollback of social benefits and improved tax collection, which the Greeks have readily abused. But the lenders have also shot themselves in the foot by voicing their willingness to extend loans if the Greeks are willing to sell their public assets and infrastructure to the highest foreign bidder, literally leaving the Greeks as tenants in their own lands. Athenians can have a water system, but it’ll be owned by a German bank or the Athens International Airport is sold to a French concern. All of the money will subsequently flee the country and condemn the average Greek to a life of debt servitude. At this moment, the Greek government is actively deciding what properties can be sold to the highest bidder. For a proud, ancient nation, it sticks in the craw to have an historic site named like an NFL stadium…and on the left, you’ll see the Heineken Acropolis, presently closed for Oktoberfest. So the Greeks do what they do well, they hit the streets.
Can that really happen here however? Hell, yes.
- Each nation has difficulties with the national debt, largely as a result of social benefits now viewed as sacred – Medicare, Social Security – and requiring renegotiation on a generational level.
- Each nation needs foreign lenders to provide funds. Technically, the Federal Reserve is now the largest lender to the Treasury, but once the oil producers recognize it, the dollar is going to be toasted (Damn, I shot my mouth off again. Good thing the Saudis aren’t reading this…).
- Each nation has advocates stating that the debt really isn’t an issue since there are plenty of physical assets to be sold. Yes, there have been talking heads on CNBC stating that we can meet our obligations by selling our national assets out from under us. And on our left, the Heineken Lincoln Memorial, closed for Oktoberfest.
- Each nation has a citizenry that has largely left it’s future income streams to government payments. There are plenty of scared 60 year olds in both Athens, Greece and Athens, Georgia who are terrified of losing their old age benefits.
- Each nation has a growing sense that their future is now out of their hands and into the hands of a financial plutocracy, answerable to no real political authority.
While it can happen here, there’s no guarantee that it will. So while the kids and wife are watching the tourist sites, I’ll be watching the crowds to see how things shake out.