Will Greece Go Broke And Take The U.S. With It?

[No DUplicitous DUpe]

Will Greece Go Broke And Take The U.S. With It?
posted with permission from http://sane-ramblings.blogspot.com/2010/04/will-greece-go-bankrupt-and-if-so-why.html

This piece's purpose is to alert you because what is happening in Greece could easily panic the market for government securities and cause interest rates to skyrocket.

To end the Greek financial crisis, the 16 member Euro Zone finance ministers told investors Greece can borrow up to 30 billion euros ($40 billion) from them, and at just 5% interest on a 3 year loan. The International Monetary Fund {IMF} may loan up to 15 billion euros more. As a result many financiers viewed the Greek crisis as over.

But market panic has set in again and the interest rates on Greek debt are rising sharply. Greece is now appealing to the Euro Zone and the IMF for a bailout.

We predicted this. In the next stage, Greece's debts will overwhelm the Euro Zone and the IMF commitments, for Greece is broke, meaning it will eventually default on its debts.

As for the bailouts, loaning them more money will only add to the debts they are already unable to pay. And that's assuming the Euro Zone and IMF will actually loan Greece the money.

Greece must confront its deep financial problems by slashing its expenses and raising its taxes. But even the idea has sent thousands of Greek protesters into the streets, and if implemented, it could cause riots and bring down the government.

As for a Euro Zone bailout, in addition to Greece there are four other Euro Zone members Portugal, Ireland, Italy and Spain, also in serious financial trouble. If need be, will they too be bailed out?

Please make no mistake, this is not just a European problem but a global one for it could easily set off a panic in government debt markets, sending interest rates all over the world, through the ceiling.

If you are American, Greece is a preview of events to come. For the U.S. is by far the world's biggest debtor nation and without loans from global investors, it could not pay its bills NOW. One of those investors, China, has been selling U.S. government debt for the last four months. For several months, so has Newport Beach, CA based PIMCO, one of the world's biggest market makers in U.S. government debt.

As America's bills mount, a day of reckoning is coming.

If this is hard to believe, think of the financial crisis that began so abruptly in 2008. Everything was going great, until suddenly it wasn't and the world was on the brink of financial collapse. The "experts" never saw it coming and they don't see it now. How bad is the U.S.'s spending? Please see: www.usdebtclock.org/

But we Americans, working together, can learn from Greece's crisis. We must rein in our government's wild spending before we sink into a financial abyss so deep that it will swallow our nation and take the world with it. The good news is if we make a concerted effort, we are capable of doing that and we can avoid this Greek tragedy.

-----------------------------------------------
http://online.wsj.com/article/BT-CO-20100427-715947.html?mod=rss_Global_Stocks
US Stocks Sink After Greece Cut To Junk Status
Wall Street Journal - April 27th - ‎23 minutes ago‎
NEW YORK (Dow Jones)--US stocks plunged Tuesday after Standard & Poor's downgraded Greece's ratings to junk status as concerns intensified over the euro ...

[ZeitgeistObserver]

1. Greece is now junk status, Portugal is next,

while Iceland, Italy and Ireland are right behind them.

Plus Japan is on the verge of bankruptcy.

Think of it as a tsunami heading this way.

[femrap]

7. Also Spain....

China has won. Of course they own a bunch of US Treasuries which will be worthless. So they lose, too.

I guess Globalism isn't such a good idea after all.

Next we'll have WW3 to keep everyone busy and encourage population control. Yippee!

WASF...glad I'm old.

[ZeitgeistObserver]

8. Yeah, Spain too.

However, China has been on a spending spree, so they don't have a problem.

[femrap]

24. Unless no one has

money to buy what they're selling.

But I would say that China has become #1...whatever that's worth.

[phasma ex machina]

56. Financial media uses Portugal, Ireland, Greece, & Spain as shiny objects

to distract the masses from infinitely larger defaults looming in California, New York, & Illinois. Back in the day California ranked as the fourth largest economy in the world. Since then it probably got pushed to fifth by China.

[ZeitgeistObserver]

64. States aren't as important as countries.

[femrap]

73. You're right....

I used to live in CA before it got robbed. I lived in the Bay Area which is gorgeous, but I guess only the wealthy can afford it now. The very wealthy, that is.

I wouldn't mind living up in Mendocino or Humboldt counties away from the crowds.

[defendandprotect]

2. If we continue captialism's concept of judging eveything by yardstick of a dollar bill...

we are all broke if we are dumb enough to continue to look at things that way!!

This is a sovereign nation -- a landmass -- filled with human beings - intelligence --

the collapse is in paper money -- an artificial entity!!

Let's go back to seashells, they have a lot of them!

[ZeitgeistObserver]

3. It's the only mechanism we have.

[defendandprotect]

9. You mean, it's the only mechanism they gave you -- think for yourself . . .

Every time we go out with our little credit cards and ATM cards we are working

to enrich corporations/corporatism/fascim.

The dollar bill isn't delivered to you by nature -- and economies are very natural

things when left alone. When controlled and manipulated by capitalists and those

seeking to exploit nature and human beings, it's a handy tool to destroy democracy.

We need to move to Democratic socialism -- true economic democracy.

[ZeitgeistObserver]

15. It's the only mechanism we currently have.

If you want to try and overthrow world-wide capitalism, be my guest.

[laughingliberal]

25. No need. Looks as if it may overthrow itself before it's over

Or eat itself, more specifically.

[ZeitgeistObserver]

26. All our systems will, because none of them

are sustainable.

[defendandprotect]

33. Look at all of the businesses/corps which have been bought out or

knocked out by bigger corps over the decades!

Capitalism isn't about competition, it's about killing the competition --

Would imagine many smaller companies right now would be willing to move away

from capitalism . . . if we do not quickly restore re-regulation on capitalism!

Including Glass-Steagall . . . which is absolutely necessary!

[defendandprotect]

27. I don't think I'm trying alone . . . you don't have to judge everything by the

yardstick of a dollar bill -- or think that way at all.

Most of the world has already awakened to the predatory nature of capitalism --

It's a ridiculous King-of-the-Hill system intended to move the wealth and natural

resources of a nation from the many to the few.

Unregulated capitalism is merely organized crime.

Further, the dollar bill is being succeeded by the plastic credit card -- and we're

all working for the banks/credit card companies on the other end of them.

Wherever you shop, charges are assessed on the business -- even if you pay your bill

at the end of the month and don't require extended credit.

[ZeitgeistObserver]

38. Philosophy aside, Greece is in deep shit.

[defendandprotect]

46. Capitalistic philosophy, military spending puts us all in "deep shit"!!

[ZeitgeistObserver]

47. Spending beyond your means,

whether capitalist, socialist or communist means deep shit.

[defendandprotect]

50. Voters have no control over MIC therefore we are certainly NOT "spending

beyond our means."

Nor do we have sufficient control over labor issues -- unions --

it's takes socialism to have that happen --

As George Orwell told us -- capitalism/communism . . . "a pox on both their houses!"

Both based on exploitation which certainly means "living beyond your means" --

pounding down natural resoruces -- exploitation of nature, animal-life and even human

beings according to various myths of inferiority!



Old Russian joke --

"Question: What's the difference between Captalism and Communism?

Answer: Under Capitalism, man exploits man --

Under Communism it's just the reverse."

[ZeitgeistObserver]

51. Socialist countries can go broke too.

[defendandprotect]

52. What socialist countries have gone broke?

And who bails them out?

[ZeitgeistObserver]

54. Why do you think socialist countries

do any better job than capitalist ones?

Overspending beyond what you can afford is still overspending.

[defendandprotect]

58. What socialist countries have gone broke?

[ZeitgeistObserver]

59. Depends on who you call socialist.

The entire USSR went for a chop, so has North Korea and Zimbabwe.

Most countries are now Third Way...a blend of socialism and capitalism.

One system isn't any better than another if you overspend.

[defendandprotect]

63. Wouldn't count USSR -- like Hitler, they merely stole the name . . .

to cover what they were really doing --

NAZI party was originally a truly social organization -- for women/abortion/labor unions,

health care --

Co-opted by Hitler.


Agree -- most countries have been smart enough to move socialism into their economies --

so far America hasn't!



North Korea? We've done everything we could to destroy Korea's economy -- splitting the

nation in half!

[ZeitgeistObserver]

65. Well they did, so they can fail.

The US has socialism as well, it just doesn't announce it's Third Way.

This isn't about ideologies, this is about overspending.

[defendandprotect]

68. Again, who are the socialist countries which have failed?

Socialism is about citizen control -- not state control --


Under capitalism/corporatism citizens have no control over spending --

expecially re MIC/intelligence complex --

Rid ourselves of that -- and corporate theft -- and we have no overspending.


Sorry -- I've run out of time to debate your circular thinking --

Bye --

[ZeitgeistObserver]

70. Why do you keep running commercials on here?

I'm not looking to buy an economic system, so you're wasting your time trying to sell me one.

I told you what countries have failed, and i've told you overspending is overspending no matter what system you're on.

[No DUplicitous DUpe]

4. Regardless of how you judge things, Greece has a big problem...

And it is affecting external governments.

[defendandprotect]

10. They have a problem created by predatory capitalism . . .

and it is affecting all governments --

We need to sink this system of capitalism and move on to democratic socialism --

unregulated capitalism is merely organized crime.

[Statistical]

34. BS. Even if Greece has 0% interest rate they would be in trouble.

Greece has continually spent more than it pulled in in revenue.

EXPENSES > REVENUE = INSOLVENCY

Do it long enough and INSOLVENCY becomes BANKRUPTCY.

It is a fairly simple (yet hard to accept for govt debt spenders) to accept.

If you spend more than you make for long enough even at 0% interest you will reach a point where you can no longer afford principle payments.
If a city does it same thing.
If a country does it same thing.

Long term REVENUE >= EXPENSES.

Only reason US is not it the same boat as Greece (yet)
a) our credit rating is better - we have better track record of making on time payments
b) our debt isn't as high as % of GDP
c) our GDP (was) growing at sustainable pace
d) we can inflate our way (somewhat) to reduce the extent of the problem

[dixiegrrrrl]

5. Greece doesn't have to help, we can go down all by ouselves.

The same junk bond/junk banking game has been done here, too.
Greece just happened to expose it.
And our debt cannot continue.

[ZeitgeistObserver]

6. We've dodged a couple of bullets, partially at least,

with Iceland and Dubai, but the dominoes are really starting to topple now.

[defendandprotect]

11. As long as we continue on with capitalism, the bullets will keep coming . . . .

at least, let's reregulate it --

unregulated capitalism is merely organized crime!

[NewJeffCT]

13. Most of Europe has worse percentages of debt

in terms of debt to GDP, as do countries like Japan & Singapore.

[NewJeffCT]

12. While the US has the most debt in total dollars

It's far less as a percent of GDP when compared to many 1st world nations.

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

[Cleita]

14. From what Thom Hartmann said this morning the IMF's bail out has

strings attached that they institute Freidman economics to get the money. That means ending social programs like their health care, pension plans and throwing everything on the free market. It seems raising taxes is the only way out for them. They have a hot tourism and yachting industry. It's time to tax the tourists billionaire yachters maybe.

[ZeitgeistObserver]

16. There are conditions to any loan.

It means major cutbacks until Greece can live within it's means.

[Cleita]

18. So you apparently believe Friedman economics are okay although it

has failed everywhere it has been tried, including here?

[ZeitgeistObserver]

21. Greece is not a victim here.

They've been living way beyond their means. The public sector is 40% of their economy.

[defendandprotect]

40. Greece has been spending on military buildup beyond their means . . ..

Turkey can now play an important role in mitigating the factors that led to the economic recession in Greece. Most analysts believe the primary reason behind Greece's severe economic crisis was its heavy military spending to contain the threat posed by Turkey. Turkish Foreign Minister Ahmet Davutoğlu, speaking after a meeting with Greek Alternate Foreign Minister Dimitris Droutsas last week, said there would be no need for arms spending if the two neighbors work to build a "common future."

Greece, the country with the highest military expenditure to gross domestic product (GDP) ratio in Europe, has in a sense become a victim of its arms race with Turkey. In 2000 Turkey devoted $16.4 billion to its military spending, while that figure was $8.7 billion for Greece in the same year. In 2003 Turkey's military spending stood at $13.4 billion, compared to $8.5 million in Greece. Per capita defense spending in Turkey was around $164 on average in the 2000s, while this number never went below $709 in Greece.

Turkey's military spending gradually declined and fell to $11.6 billion in 2008, while Greece's military expenditures consistently increased, reaching $9.7 billion in the same year. Speaking about Greece's military spending and its connection to the financial crisis, International Crisis Group (ICG) Turkey analyst Hugh Pope said reports of large German sales of armaments to both Turkey and Greece illustrate a phenomenon -- which he says is most likely just coincidental -- that the German policy of excluding Turkey from the EU has contributed to tensions between Turkey and Greece, from which the German arms industry has then profited.

http://todayszaman.com/tz-web/news-207737-papandreou-erdogan-meeting-key-in-arms-race-reduction.html

[defendandprotect]

30. It means right wing cutting social programs here . . . rather than MIC ...

then everyone is competing in a downward spiral . . . !!

You can't demand that nation's do themselves harm in this manner without turning

around and do the same thing to America.

[defendandprotect]

35. ...and presume you also recommend Friedman economics for our future?

[ZeitgeistObserver]

36. I recommend you live within your means.

All else means disaster.

[defendandprotect]

41. We have little control over the MIC corporate/intelligence budget . . .

if that ever happens, I may agree with you --

Not to mention the oodles of money now going to the Vatican to subsidize their

"faith based" organizations --

and the oodles of money in bail outs for capitalism --

If we could end corporate corruption, rid ourselves of predatory capitalism --

put single payer health care in place -- and combine the military services which would

bring an immediate 28% savings -- we'd be on our way.

MIC is insane -- yet as long as right wing can sell their fear mongering, especially 9/11 MIHOP.

[ZeitgeistObserver]

42. People do the voting.

In Greece as well as in the US.

[defendandprotect]

45. As we all know . . . "What's important is who counts the votes; not who votes" ....

Can't believe anyone would say anything that naive!

:eyes:

[ZeitgeistObserver]

48. Again, ideology rather than economics.

[defendandprotect]

53. You were discussing voting . . .

and to do that you have to feel a reliability of a system --

we don't have that reliability -- we have hackable elections --

and results over decades to prove it!

Both the large computers used by the MSM and the voting computers began coming

in during the mid-late-1960's . . . coincidentally about the time America was

passing the Voting Rights Act!


The large computers gave MSM new powers to PREDICT and CALL elections and ELECTORAL

COLLEGE VOTES and CALL elections for President candidates.

Whereas, prior to the large computers all they could really do was to report actual

vote tallies counted!


The small computers are hackable -- and I'd question every result back to Nixon/

Humphrey where we had a 100,000 vote difference, btw!


Certainly 2000 and 2004 were steals -- though some say that 2008 was a landslide vote

for Obama with 24 more Congressional seats that were assigned to Dems -- hacked.

[ZeitgeistObserver]

55. Yes, vote in people who are tough on finance.

[defendandprotect]

57. Like Republicans?

Who talk about it all the time . . . except when W was president?

Or Dems who have been re-financing the W wars for 4 years?

[ZeitgeistObserver]

60. Are they tough on finance? No.

[defendandprotect]

69. Who are you suggesting we elect, then?

I vote for Democrats --

they've been refinancing Bush wars for 4 years!

[Synicus Maximus]

17. You do realize that most of the tourist that go to Greece are middle

class workers from northern Europe? And there are a lot of places for billionaires to have their yachts built.

[Cleita]

19. Apparently those middle class tourists have disposable income to afford vacations.

Even with additional taxes levied on them Greece would still be a very good deal and I believe having a safe place with a stable and solvent government would be a plus making the extra expense worthwhile rather than vacationing in a country that is simmering with civil unrest.

[defendandprotect]

28. Which is a ridiculous idea because privatization costs more ....

and sick citizens cost more --

Agree -- tax the rich --

[BlooInBloo]

20. Possibly, and no.

[closeupready]

22. No and no.

But it will lead to semi-dissolution of the EU.

[No DUplicitous DUpe]

23. I think both Greece and the U.S. will need to raise taxes...

and the sooner the better.

[defendandprotect]

29. ... on the wealthy and corporations -- in fact, let's call it restoring taxes on wealthy . . .

recind Bush and Reagan tax cuts!!

[No DUplicitous DUpe]

71. That is an excellent start...

But I think the problem we are in now, requires massive military spending cuts and tax hikes across the board.
sad but true.

[Prometheus Bound]

32. They could both try reducing military spending. 6.6B Euros for Greece

Greece's serious financial troubles are going to affect their military spending. The highest in the European Union and second in NATO only to the United States, the Greeks spend 2.8% of their GDP on defense, compared to an average 1.7% in the other European NATO countries. Defense personnel account for 2.9% of the active population against an average 1.1% in other NATO member states.

http://www.aviationweek.com/aw/blogs/defense/index.jsp?plckController=Blog&plckScript=blogScript&plckElementId=blogDest&plckBlogPage=BlogViewPost&plckPostId=Blog%3a27ec4a53-dcc8-42d0-bd3a-01329aef79a7Post%3a756cd700-8e3c-48c9-847d-341461f1617b

[ZeitgeistObserver]

37. Yeah, craziness.

Way out of proportion.

[defendandprotect]

43. Somewhat like America's MIC . . . and military privatization which has added so much to

the expense --

[Mike 03]

31. Very Important Post.

We absolutely need to address our debt and deficit, as do the so-called PIIGS.

[pitohui]

39. what wild spending concerns you so? helping sick and old people? or maybe the unemployed???

seriously, why do people re-post crap like this in DU? i can get the rightwing bullshit hysteria EVERYWHERE and ANYWHERE, these folks already own the teevee airwaves

maybe greece will default, maybe europe will default, maybe the usa will default, but since MOST of the "wild spending" was caused by dumya's wars and giveaways to the rich, i'm not interested in hearing about it NOW -- the money is fucking gone and there's fuck all we can do about it other than move ahead

there is no "wild spending" here to "reign in" unless by "reign in" you mean "let's make sure americans get health care never" and "let's take away what little help we have for the poor and the elderly"

sheesh

there was a time to cry for america to stop the wild spending, but it sure as shit isn't NOW when people are hurting

[defendandprotect]

44. It's also a great way to destroy social programs in Europe ... and

reduce everyone to the downward spiral America has been in for so long --

decades!

No universal health care -- huge profits for large "too big to fail" corporations!!

And a steadily growing MIC -- privatized to boot!! Outrageous!

Pretty much all Americans get for their tax dollars now is a constantly increasing military/

MIC -- and the pleasure of subsidizing the Vatican's "faith-based" organizations!!

[ZeitgeistObserver]

49. How did the Vatican get into this?

[defendandprotect]

61. Taxpayer subsidy for their . . .

"faith-based" religions -- W introduced that ...

coincidentally about the time they really needed money to cover their pedophile

law suits!

Obama is increasing the subsidies!


And, about 5 months ago I read that there was an investigation beginning into whether

the RCC here used that money to pay off their pedophile law suits!

[ZeitgeistObserver]

62. No religion pays taxes, not just the Vatican

[defendandprotect]

66. Subsidizing the Vatican "faith based" organizations isn't about tax-exempt

status --

they're two different things --

IMO, only a church and its surrounding property should be tax-exempt --

All their other real estate holdings and tax portfolios should be taxed.


Again, subsidizing Vatican/RCC organizations is something entirely different --

Introduced by W --

[ZeitgeistObserver]

67. All religions get the same.

[No DUplicitous DUpe]

72. Is it "rightwing bullshit hysteria" to want a drastic reduction in military spending...

..a reduction in the building of weapons that destroy property and kill men, woman and children, and an end to wars that should never have been started in the first place?

You said, "there is no "wild spending" here to "reign in"" sorry I've got to call "bullshit" on that comment. Remember, more than half of our treasure goes to these useless endeavors.

If you are not interested in hearing about,"the "wild spending" ... caused by dumya's wars and giveaways to the rich" -Then how the heck are we going to reverse these bad policies?

A strong country that does not spend 400+ billion a year in debt service can help the poor, sick and elderly better than we can, right now.

Peace.

[No DUplicitous DUpe]

74. K&R!