Observers may have overlooked the recent visits of Greek Prime Minister Alexis Tsipras to Russia where some positive bailout support might be forthcoming. The low price of oil coupled with international sanctions have prompted the Kremlin to bailout their own banks before considering foreign financial assistance. Without outside help, PM Tsipras has placed his nation’s rescue in the hands of EU leaders in Brussels.
The EU Commission is requiring stringent measures of austerity including collecting billions of dollars of delinquent taxes. Greek citizens and their leaders have sought and received constantly growing pay, entitlements and work rules that don’t fit into a workable national model of economic growth and reliability. What is disturbing is why pension benefits are the highest in the EU; some workers retire at age 50 and 1/4th of the people are pensioners.
From an economic standpoint regarding the USA, Greek exports, imports and imbalance amounted to less than 1/2% (.04%) of our international trade in 2014. The Greek economy accounts for 2% of Eurozone commercial activity and about 2% of the EU population. Here are some facts about our finances in the USA. The national debt is $18.3 trillion; GDP (Gross Domestic Product annualized) is $17.82 trillion. Current fiscal year federal budget deficit amounts to $496.7 billion. Local (municipal) debt is $1.90 trillion while revenue is just $1.15 trillion. The shortfall of unfunded liabilities presently stands at $5.5 trillion (SS, Medicare A, B & D, federal employee and veteran’s benefits).
Our workforce numbers about 149 million or 46% of current 321 million citizens. Workforce 15 years ago numbered 153 million participants with a population of 281 million people. Currently there are 93 million people neither working nor looking for work. There are 27.7 million government employees (8.6% of the population). Half of our citizens (160 million) are receiving some kind of government benefits.
Without notice or forewarning we have become a culture of liberal socialist serfs at the behest of federal government. In the US, a growing problem is under-funded reserves for both public and private pensions. Nationwide pension shortfall liability is between $2 and $4 trillion; Illinois alone is $111 billion. Reasons are low interest rates, longer lives and bad math by ignorant politicians.
Common ground between public workers in Greece and the USA is union representation. In Greece ADEDY is the umbrella bargaining power while in the US there is a plethora of unions that represent all levels of workers and professional management, public and private. The important elements of union policy are restrictive rules constraining efficiency among workers. Union officials have no interest in a relationship between productivity and profitability. The paramount interest of union policy is to enroll dues-paying members so that funds can be distributed to political friends. Greek per capita GDP is 60% of Germany’s and 63% of Britain’s; debt is 177% of national GDP.
Benefits in the US and other nations like Greece have become a pyramid/Ponzi scheme meaning that Social Security and other systems require contributions by new entrants to compensate those who are receiving benefits but no longer paying into the system. The immutable rules for perpetual economic sustainability are these; Rule #1 “Every worker; government, private or non-profit must produce more economic value than is received in compensation and benefits by the individual.” Rule #2 “A worker cannot obey the directions of two supervisors or render equal loyalty to two managers.” Unions have become a wedge between workers and management that sustains inefficiency, tenure and high costs. Both rules are common sense and incidentally also Biblical from Mark 6:24.
Another $93 billion has been promised by the EU Commission knowing that $80 billion in loans and aid from the European Commission, The European Central Bank and the IMF (International Monetary Fund) has been squandered. Without collection of delinquent taxes, controlled spending, increased productivity, elimination of corruption and stabilizing wages and benefits, Greece is a failed state.
The United States and other nations drowning in debt accompanied by out-of-control spending and led by unscrupulous politicians will contribute to a coming world economy that will make the 2008 financial crisis seem like a mistaken bank overdraft or an overdue parking ticket.
Dick Baynton
