Why in the world would any American politician think they can help figure out the financial crisis overwhelming Greece and the European Union? After all, many of the problems in Greece echo those in America. And yet, President Obama inserted himself into the bailout talks. What kind of solutions could he really offer? Stu broke down the parallels between Greece and America on TV last night, and warned America to wake up before we end up in the same place as Greece
STU: Glenn has been going on and on about Greece for at least as long as I can remember. It’s one of his most passionate topics, I’d say. Finally, these morons are reaping what they sowed. Could these people be any dumber? I mean, beyond their own resources they’ve been spending, borrowing money, they had no earthly way of paying back, and increasing government handouts even after it became clear that they were crippling the country.
Greece owes various creditors about $271 billion, with Germany being the largest. So, how did they get into this mess? There are a few culprits, many of which are cited in the book Boomerang by Michael Lewis. They pay government officials almost three times as much as the average private-sector job.
An example of this overspending can be found in the national railroad. It pulls down about €100 million a year. It seems like a pretty good business, but they have to pay out about 400 million in payroll, plus another 300 million in other expenses. The average salary for a railroad employee, €65,000 a year about, 71,000 bucks. As one businessman pointed out, it would actually be cheaper for the government to scrap the railroad altogether and just pay for every Greek citizen to take cabs.
Public schools, Greece’s are among the lowest ranked in all of Europe, yet they have four times as many teachers per pupil than the rest of the best schools, which, by the way, the number one is Finland, and they’re four times as much. The school system is so bad that Greeks typically pay for tutors so that their kids actually get some learning done.
Greece is plagued with phony job creation programs such as 270 people that were paid to digitize the photographs of Greek public lands—sounds wonderful. The problem is they didn’t hire anyone with any digital photography experience at all, nobody.
The retirement age in Greece is insanely young, 55 for men and 50 for women. Wow, I thought Europe was so progressive. What is up with all that sexism there? This is at the heart of Greece’s struggles. This early retirement goes not just for police officers and firefighters, but anyone with an “arduous job,” that is including hairdressers and radio announcers. Maybe Glenn should move to Greece. He is approaching 55. Musicians even, everybody basically. So many people are retiring young and living longer, the austerity payouts are ballooning.
Government healthcare is wildly inefficient in Greece. Before the crisis, it was really just a mess. Citizens had to give medical staff cash gifts in order to make sure they’d get good treatment. While all this was going on, while everyone dipped their grimy fingers into the government pot, no one was counting how much was going in, nor how much was going out. By the time someone decided to take a breather from the spending orgy, the damage was irreparable. The debt to GDP ratio had expanded to a devastating 177%.
Greece’s unfunded liabilities are 875% of GDP. Federal spending in Greece is close to 50% of GDP. Even with all this information, people still went to the polls and voted against cuts in spending. Liberal outlets applauded the vote, referring to austerity cuts as harsh. People in Greece, of course, rejoiced at the news of the vote. I think it was 61-38 or something like that. They were happy to get another far left government to keep higher taxes, spending, and handouts in place.
What’s going to be harsh is when the day of economic reckoning arrives and they realize they really couldn’t afford any of this. This is how you destroy a country, not save it.
Here’s the best part about Greece, Pres. Barack Obama has inserted himself into the bailout talks. I can’t wait for this. Barack Obama is trying to give Greece financial advice. Pot, meet kettle. Kettle, meet pot.
Let’s go back through that list of things that helped destroy Greece again. This is going to be fun. Federal workers in Greece earn more than private citizens. Well, US federal workers earn 37% more than private-sector employees. Greece has an unprofitable state rail system. Amtrak loses over $1.4 billion every year. The biggest waste is being in the 15 little-traveled routes that cost $600 million to keep operational for no freaking reason at all.
Greece overspends on education despite failing schools. Well, the US Department of Education is $77.4 billion and increasing every single year, despite the fact that we rank 17th in the world in education. Greece has all those phony job programs. Could I remind you of the stimulus? That cost American taxpayers at least $278,000 per job with some estimates having that well over $1 million per job.
Greece’s retirement age is far too young, 55. America’s is 65. That’s a little better, but it hasn’t been changed since Social Security was invented. Even the life expectancies have dramatically improved. Greece’s government healthcare is crippling the nation. ObamaCare—I don’t think I need to go any further than that, but as you know, it’s already a mess. It’s costing us a fortune. It couldn’t even get the freaking website right to sign up to pay for it.
Greece’s debt is 177% of GDP. We’re at 101%, so we’re close. It’s worse though than France and Spain, and Spain is dealing with a 25% unemployment rate. Unfunded liabilities in Greece, 875% of GDP. In the US, it’s $90 trillion or about 500% of our GDP—not quite as bad as Greece but still terrible.
Federal spending in Greece, about 50% of GDP. America, it’s only 20.5, so we’re doing great there, and when factoring in state and local governments, of course, it’s more like 35 and is projected to rapidly rise. The economic disaster playing out in Greece is the American story in the short-term future. Our situation is not as bad as Greece’s, but we’re on the same trajectory. We will eventually get there if we keep making the same fatal mistakes as viewing austerity as harsh.
It may be harsh at times. There’s tough choices to come, but it’s necessary, and if someone in the room doesn’t have the courage to step away from the spending orgy and count the debits and credits, we’re all screwed.