Squaring the Culture




"...and I will make justice the plumb line, and righteousness the level;
then hail will sweep away the refuge of lies,
and the waters will overflow the secret place."
Isaiah 28:17

05/10/2010 (4:26 pm)

Why Greece Matters To You

Greece is broke. So is the United Kingdom, which will be hitting up the EU for loans next.

Greece is facing the same sort of problem we’re facing here in the US, but more advanced. The government is paying too much to too many people, promising easy and early retirements, hiring everybody in sight and paying above-market wages… and borrowing money to do it all.

Take a gander:

Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.

“I use a hundred different chemicals every day — dyes, ammonia, you name it,” she said. “You think there’s no risk in that?”

“People should be able to retire at a decent age,” Ms. Veremi added. “We are not made to live 150 years.”

Perhaps not, but it is still difficult to explain to outsiders why the Greek government has identified at least 580 job categories deemed to be hazardous enough to merit retiring early — at age 50 for women and 55 for men.

Greece’s patchwork system of early retirement has contributed to the out-of-control state spending that has led to Europe’s sovereign debt crisis. Its pension promises will grow sharply in coming years, and investors can see the country has not set aside enough to cover those costs, making it harder for Greece to borrow at a reasonable rate.

As a consequence of decades of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees, or 14 percent of its work force, giving it an average retirement age of 61, one of the lowest in Europe.

The law includes dangerous jobs like coal mining and bomb disposal. But it also covers radio and television presenters, who are thought to be at risk from the bacteria on their microphones, and musicians playing wind instruments, who must contend with gastric reflux as they puff and blow.

At the linked article there’s an in-line graphic showing what percentage of each European Union country’s Gross Domestic Product is demanded by government pension promises. In Greece, that number is over 800%.

In the United States, it’s about 460%. That’s just as unsustainable, only it will take longer for the bankruptcy to occur.

Recall a couple of months ago when I posted a remarkable speech by New Jersey’s new governor, Chris Christie? It was remarkable in its candor; Christie outlined in clear terms what the state had to do in order to survive fiscally. Salary cuts down to market-standard wages. Restructuring of pension promises. Cuts in programs.

In short, Christie had to undo decades of Democratic party largess. It’s the same all over Europe: the left has been promising easy retirement, unlimited medical care, higher wages, all of it with absolutely zero understanding of where the money comes from. Leftists assume that the wealth of the nation is a fixed sum that springs up from the ground fully-formed, and need only be apportioned fairly. They buy votes by promising to use that wealth for the “poor,” like Robin Hood (“poor” meaning anybody not earning in the top 5% of incomes). The promises they make are empty, because nobody can afford them. Nobody can. All of Europe is broke. Here in America, every city, every state run by Democrats is likewise broke.

Socialism is bankrupt. Progressivism is too expensive for everybody, including God.

We saw it when the Democrats took office in 2009. Within a month, the annual deficit for the national government rose a trillion dollars. One trillion dollars. That’s per year, on into the future, no end in sight. That trillion dollars is almost entirely new spending on social programs that Democrats consider “human rights” — college scholarships, business bailouts, unemployment benefits, health care subsidies, targeted energy tax cuts, federal aid to local school districts, free Internet access, smart electrical grids, and on and on.

Democrats dream dreams of what they would do if they were God, and then they do it, because they actually believe they are God. And then, they wonder why the nation can’t sustain the spending. “Just raise taxes. That will cover it.” Sure thing. And they wonder why the economy goes sour. It must be because of criminal Republicans not doing their share, or robbing the public through profit motive. Punish them. Oh, gee, why is gross domestic product dropping? We meant so well, we’re doing so much…

AthensViolenceGreece has announced austerity programs as a condition of receiving loans from other EU nations. The public is rioting in response; the public employee unions are leading the demonstrations.

The violence in Greece is following a pattern that has begun here in the US. In Arizona, a violent demonstration broke out in opposition to the state enforcing federal immigration standards. In Berkeley, CA, this February, protests against tuition hikes and budget cuts erupted into violence.

These outbreaks of violence have a couple of things in common. They arise from complaints by people who expect something for nothing from the government, and they’re fomented by hard leftists, folks we used to call “communists.” Hard leftists use violence as a strategy, hoping to produce revolutionary overthrow of non-Marxist governments. In terms of actual violence, most of what we’re seeing this year comes from the left, and it’s coming on the heels of governments cutting back their giveaways.

News outlets responsive to the overtures of the Obama administration have been attempting to paint the Tea Party demonstrations, which have been proceeding peacefully for a full year, as a potential source of violence. This is bunk, and has little basis in fact. The major sources of domestic violence in the US over the past 40 years have been animal rights and environmental rights groups, hard-left anarchist groups, Puerto Rican separatists, and fringe religious-racial superiority groups, with the largest number of such incidents by far coming from the eco-terrorists. A recent study on domestic terrorism by the Council on Foreign Relations notes that virtually all the domestic terror attacks between 2002 – 2005 were carried out by environmental extremists; the claim in that report that right-wing terrorists are potentially more dangerous appears to be the opinion of the Southern Poverty Law Center, a organization of leftist ideologues that raises a great deal of money by perpetuating the myth of violent racial bigotry in the United States. Their bias against the right is suspect.

There may be some threat of violence if the leftist-controlled government of the United States under President Obama appears to threaten individual liberty in a way that political activism can no longer address; I certainly hope that citizens resist a leftist coup here, if one such occurs. A much more likely scenario for violence, though, appears to be that the political activism of conservatives succeeds in the next year or two, and Congress begins to roll back socialist policies from which large groups of citizens have benefited. I have little doubt that the rolling back of favorite New Deal programs by the right will be met by violence from the left, leftists carrying out the acts they have projected onto Tea Party protesters. The left in the US appears to be much more amenable to violent protest than does the right.

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9 Comments »

May 10, 2010 @ 5:42 pm #

The Welfare State’s Death Spiral

What we’re seeing in Greece is the death spiral of the welfare state. This isn’t Greece’s problem alone, and that’s why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven’t fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.

Reality will not be fooled.

May 10, 2010 @ 7:18 pm #

John Cooper wrote:

The Welfare State’s Death Spiral

Doggone, look at that. I could do worse than echo the thoughts of Robert Samuelson…

May 10, 2010 @ 9:22 pm #

I’ve recently been thinking that some of the tea party movement should branch off and become the Tin Cup movement. Their theme song, which be sung at rallies, while brandishing tin cups, would be the Johnny Cash song “I’m busted !! ”
they could also sing outside of one of Obama’s multitudinous trips in the 43K/hr
airplane to tout the healthcare plan

May 10, 2010 @ 10:36 pm #

You wrote: “We saw it when the Democrats took office in 2009. Within a month, the annual deficit for the national government rose a trillion dollars. One trillion dollars. That’s per year, on into the future, no end in sight. That trillion dollars is almost entirely new spending on social programs…”

That’s simply not true. According to the CBO, the baseline 2009 deficit the Bush administration bequeathed to the the country when it left office was about $1.2 trillion. Add another 200 billion for the AMT patch and the Iraq and Afghanistan supplementals, which a republican most surely would have continued, and you end up pretty close to the number we got. That’s hardly a trillion dollars in new social spending programs.

May 11, 2010 @ 6:29 am #

Jackson –

Please produce for me the document claiming that the baseline for the deficit was $1.2 trillion when Bush left office. From what I recall, his worst year was around $450 billion (which is still unacceptable.)

I think perhaps what you’re talking about is the TARP bailout. I agree that this was badly spent, and initially had nothing to do with Obama, but that was supposed to be a one-time expenditure (or rather, a one-time temporary fund), not an ongoing program. It should not have been affecting the deficit going forward, and in fact they only spent, what, $200 billion (only $200 billion. Heh.) out of that money in the first year. So even with TARP, the ongoing deficit produced exclusively by the Obama administration is over a trillion dollars. For the details of that trillion, look up the stimulus spending package.

Plus, as I have to point out every time anybody starts talking about deficits, Congress holds the purse strings, and Congress, from 2006, was controlled by Democrats. Not that GWB did all that much to stop them from spending, mind you, but still, the President only proposes the budget, it’s Congress that passes it.

I’m the last to defend GWB as a fiscal conservative, but the D’s have made him look frugal.

May 11, 2010 @ 8:17 am #

It’s a totally futile gesture on my part, but I just sent this to my two senators and congressman:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” So reads Article I, Section 9 of the U.S. Constitution. But the U.S. government just agreed to send, via the International Monetary Fund, $114 billion to bail out Greece. There was no Congressional debate on this, let alone a vote. Don’t We the People have some say in this matter at all? Apparently not.

May 11, 2010 @ 8:30 am #

Here’s the hard numbers from the CBO: http://www.cbo.gov/ftpdocs/100xx/doc10014/Chapter1.5.1.shtml
This details all the changes, projected and actual, and where it all comes from. The budget for 2009 which Bush signed at the end of ’08 projected 4.5 billion, but in January ’09, before Obama was inaugurated, the CBO had already projected a deficit of 1.2 trillion for that year.

You’re right, congress holds the purse strings, but look at the charts on where the deficits come from. For a good visual, here’s a link from the CBPP: http://www.cbpp.org/cms/index.cfm?fa=view&id=3036 Granted, the CBPP has a socially liberal agenda, but they are non partisan, fiscally conservative and their statistics are impeccable.

Though the numbers set records, this is not the largest deficit as a percentage of GDP, at around 10%, in 1943 the deficit was over 30% of GDP, and we got out of it. But back then we had a solid manufacturing base that produced everything we needed, and had huge trade surpluses, unlike now. Now we can’t even make a missile without computer chips from China- a repressive communist economic powerhouse with a large nuclear capability that has actually made threats against us.

Anyway, I agree, that regardless of where it comes from, it’s pretty horrific and not sustainable.

May 11, 2010 @ 10:21 am #

Phil–

You’re better than Robert Samuelson. Did you notice in that quote above how he tried to sneak in the idea that it’s the government’s job to care for everybody in their old age? Whatever happened to the idea of each individual providing for his *own* old age?

Ever heard of the “72-Year Rule”? From The Failure of the Unfree Market by Randall Hoven in the American Thinker:

What we have here is the failure of the unfree market. That means the failure of Greece. And the other PIGS (Portugal, Italy, Greece, Spain). And Europe. And it means the U.S., too. It even includes the Great Recession. The modern welfare state is collapsing around us.

If you had believed in the 72-Year Rule, you would have seen this coming. The 72-Year Rule says the lifetime of any social order or governing paradigm is about 72 years. For example, how long was it from the adoption of our original Constitution (1789), which sanctioned slavery, to the Civil War (1861)? Call it 72 years. And from then until the New Deal in 1933? Another 72 years. How about from the Bolshevik Revolution (1917) to the fall of the Berlin Wall (1989)? That would be 72 years again.

Do you know when the first Social Security check was issued? January 31, 1940. If my guess is right, Social Security has maybe two more years left.

Generally, the modern welfare states were born in the 1930s. So the 72-Year Rule says the modern welfare states will collapse and/or turn into something else in the 2002-2012 time frame.

You’ll like Hoven’s conclusion, too.

April 21, 2011 @ 8:37 am #

Jackson wrote:

The budget for 2009 which Bush signed at the end of ’08 projected 4.5 billion, but in January ’09, before Obama was inaugurated, the CBO had already projected a deficit of 1.2 trillion for that year.

But if you’ll recall, Bush never signed a budget at the end of 2008. House Speaker Nancy Pelosi refused to produce a joint budget resolution for him to sign, intending instead to wait for President Obama to be inaugurated so he could sign a more generous spending bill containing the roughly $1 trillion in additional social spending and tax incentives for Democrat pet programs that we’re talking about. So what we operated on in 2009 was not Bush’s final budget, as would be the case if Congress had been run by adults who believed in American Constitutional government. What we operated on in 2009, which produced a deficit of $1.6 trillion or so, was 100% Democratic party fabrication.

Jackson also wrote:

Though the numbers set records, this is not the largest deficit as a percentage of GDP, at around 10%, in 1943 the deficit was over 30% of GDP, and we got out of it

1943 was the high point of WWII. Deficit spending in those days was something done primarily during wartime; budgets during peacetime were generally balanced, so huge wartime debts could be paid off in peacetime. In like fashion, the Bush administration justified its deficits by noting the long-term middle east wars, necessitated by radical Islam worldwide.

The difference between these instances and the current Obama regime, is that Obama seems to regard deficits as a peacetime norm, as did Lyndon Johnson before him, and Franklin Roosevelt before him. Bill Clinton also believed in peacetime deficits, but was forced into frugality by Newt Gingrish, whose Contract With America included promises of balanced budgets, which he kept (sort of. Even the balanced budgets of the Clinton years, against which Clinton himself fought fiercely — he shut down the government twice, remember? — were only balanced by counting the excess of Social Security and Medicare receipts over expenditures as income to the government, a practice that would be illegal if done by any other fund.)

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