Here’s Greece’s economic crisis in a nut – the emphasis on nut – shell brought down to everyday terms that most people face when dealing with income and debt and how to handle both and survive, keeping in mind that Greece isn’t in the Digital Age, or even the Analog Age: it’s in the Abacus Age.
You owe the bank $10,000 but can’t pay because you lost your job or had a wage cut, or you’re a pensioner and a United States President who’s now a dead duck as well as a lame duck has cut your benefits 30 percent or more.
The bank, not wanting to lose the $10,000, loans you another $10,000 to pay the original $10,000, so now you owe $20,000, which you can’t pay either. You sign a note that says you will cut your spending on essential services and goods so you can have money to pay back the bank but, alas, it doesn’t work.
So now you go back to the bank and ask for a third loan, this one for $20,000 to pay back the original two loans totaling that amount. The bank doubts you can pay but loans you another $20,000 to pay them back.
But now you owe $40,000 which you can’t pay so the bank makes you sign a memorandum that you’ll sell your car and house, cut your expenditures on food, stop buying oil in the winter for heat and that you take a vow of penury and agree to pay them every single penny you make.
How else to explain why Greece’s international creditors, first the heartless shysters making up the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) would give Greece not one, but two bailouts totaling 240 billion euros ($267.88 billion) which it KNEW couldn’t be repaid would now be loaning another 86 billion euros ($95.99 billion) to a government which is simultaneously asking for a debt cut and said it can’t pay back what it’s asking for – and that the loans won’t work to save Greece?
Greece got its first bailout in 2010 after former Premier and then-New Democracy Capitalist leader Costas “The Invisible Man” Karamanlis’ government lied about the country’s economy, forcing his successor, then-PASOK Anti-Socialist leader George “The Money is There” Papandreou to go begging hat-in-hand to the Troika, the first humiliation for Greece.
Greece, of course, caused its problem itself – please stop blaming the Americans, Jews, Germans, Zionists, Venetians, Franks, Turks and Martians – by going on wild spending binges for decades and hiring every Nick and George in the country to be a civil servant, sit at their desks smoking and drinking coffee and ignoring clients.
Despite the two bailouts of 240 billion euros, despite stiffing investors – including those in the Diaspora – with 74 percent losses to write down the debt by 134 billion euros ($149.57 billion) Greece’s debt has risen.
It’s now – as of this second so check your watches later because it goes up 8,734 euros ($9,478) per second – some 352,567,209,379 euros ($393,526,704,928).
That means in a country with a population of 11.03 million, subtracting the hundreds of thousands of illegal immigrants, that every citizen has a debt of 32,051 euros, or about $39,123.
Since they are the ones paying back the debt at the same time their pay has been cut, taxes raised, pensions slashed and with some 1.3 million out of work, the per capita is far above that.
Then you have to subtract the rich and politicians and privileged who pay little or no taxes, hide their money in secret foreign bank accounts and beat their breasts as phony jingoists imploring everyone else to pay. So what each Greek owes is an amount they can’t – just like their country.
A long line of distinguished economists, such as American Paul Krugman, have pointed out the folly of Greek debt and the myth of repayment as the Troika (now the Quartet with the addition of the European Stability Mechanism) continue the practice of pretend-and-extend.
That is, we will pretend you can pay, extend how long you have to repay knowing you can’t repay and some year down the line we’ll do the same with your children and grandchildren. Greek debt is close to 180 percent of Gross Domestic Product (GDP) a level so unsustainable it would be laughable if it weren’t so tragic.
Now it’s in the hands of Greek Prime Minister Alexis (Liar) Tsipras, who flat out knew he couldn’t keep campaign promises to reverse austerity and took Greeks through a torturous six-month period with the country just starting to recover and brought on him and them the third bailout that wouldn’t have been needed – and which he said he would never seek nor sign.
The rescue packages will fail and the math will keep working against Greece because critical structural reforms won’t be carried out, corruption won’t be curtailed, and the citizenry will have more incompetent governments populated by greedy, self-serving politicians without the acumen to run a hot dog stand outside Yankee Stadium.
You can rationalize all you want, put the numbers on a Cray super-computer and line up the toady acolyte economists who serve governments and not the truth and it will still come out the same for Greece. As the noted philosophers of Looney Tunes reminded us, “It just don’t add up.”