Use access key #2 to skip to page content.

Shameful Greek Tragedy

Recs

12

May 05, 2010 – Comments (9)

I put the Greek Tragedy on this week's Weekly Walk of Shame. And what horrifying footage to wake up to this morning, when I turned on the TV. Awful. Of course, this walk of shame is also that we shouldn't ignore the similarities in terms of the core problem, as it's arguably right here at home too. Our own government's out-of-control spending was shameful and unsustainable several years ago and it has only continued as folks like Krugman pooh-poohed "deficit hysteria" not so long ago, if I recall correctly. I still feel there's something (a lot of things) to be pretty hysterical about in this regard. (Not to mention we may be stunting private industry with some of the recent government actions, and still hinging misguided hopes that consumers will take on more debt to spend again when they never really dug themselves out of the original debt hole to begin with...)

And I know there are others out there who are pointing out the dangerous correlations right now, with so many overly indebted countries in precarious situations. I've been catching cautionary outlooks in lots of well-known experts' comments on the situation in Greece and the Eurozone. And I've enjoyed binve's posts on the topic too right here in the CAPS community. But it did move me to also write a piece on this, that this isn't just "over there."

One thing's for sure, we live in "interesting times."

 

9 Comments – Post Your Own

#1) On May 05, 2010 at 7:30 PM, rd80 (98.18) wrote:

US federal debt as an analogy to Greece isn't entirely accurate.  We have the option of printing currency that Greece doesn't - not that debasing the currency is any better a solution.

A much better analogy to Greece are the heavily indebted state governments.  The key questions there are whether the the fed gov will bail them out and what concessions the other states demand. 

I don't see a scenario like Greece playing out across the US in the near term, but riots in states with heavy debt burdens as they need to cut back gov't employee numbers, pay and pension plans may be closer than most care to think about.

Report this comment
#2) On May 05, 2010 at 9:56 PM, TMFLomax (45.96) wrote:

rd80

Thanks for the thoughts here. Yeah, I'm not too fond of the debasing the currency route, whew. 

And good point about the heavily indebted state governments. That is another worrisome element here and you're right that that's a good analogy since a lot of those state governments have to make some serious cuts (and I know some have already started, I've seen news articles here and there, cutting back on police forces, education, etc.).

Report this comment
#3) On May 05, 2010 at 10:24 PM, goalie37 (92.58) wrote:

I don't condone huge deficits, but at least they're not confusing.  The idea of rioting in the streets in favor of it baffles me.

Report this comment
#4) On May 05, 2010 at 10:53 PM, TDRH (99.68) wrote:

"(Not to mention we may be stunting private industry with some of the recent government actions, and still hinging misguided hopes that consumers will take on more debt to spend again when they never really dug themselves out of the original debt hole to begin with...) "

Not to sound like Alstry, but what happens when the music "stimulus stops".

Again not to sound like Alstry, but California (state) would appear to be going through a similar situation.   Nevada and Florida do not appear to be hurting at least publicly, but they experienced a similar run in housing.

Hope my Brazilian friends will forgive me, but they have a saying, "So mudou o endereco", only change the zip code.  The problems there (in Greece) are the same as we will/are experience/experiencing.   Short term there may be a flight to treasuries, but what comes later?     The US makes next to nothing.   The workforce is not well educated.   There is an established infrastructure-but simple maintenance cannot be maintained.

 The US, I would argue, is  headed towards a relatively severe  correction in standard of living.   The question is how will the nation respond/adapt.   Inflation is comiing, matter of time and interest rates will follow.   I am sure GS is hedged for it.

Report this comment
#5) On May 05, 2010 at 10:56 PM, MikeBobulinski (< 20) wrote:

The rioting will only start when the austerity measures become demands by the government.  Think about it.  How many families in Europe or anywhere else in the world for that matter spend in the same manner that Americans spend?  We would rather have two cars that guzzle gas than force Detroit to come up with something more economical by only buying one or going without.  We would rather spend $20 on the latest DVD that spend $5 to support our school's PTAs or similar educational support groups. We would rather eat out at a cost of about $12 a head rather than cook a meal at home for a cost of about $3 a head.  People in our great nation often wonder why we have deficits and spending of the magnitude discussed in the news.  Look around, it's our way of life.  Take that away from folks by demanding more austere steps and lifestyles, and you will see folks revolting in the streets.

Look overseas, folks ride bikes, walk, take mass transit.  They eat at home often with food grown locally or in their backyard.  They do a great many things "backward" to our way of thinking, but in the end...while not completely analogous to our governmental spending or situation, their efforts to Westernize may be leading to many of their problems.

Don't get me wrong, I am not condemning the American way of life.  I am simply saying that alot of what we have as problems in our economy are driven by the belief of most folks that it is a God given right to spend money like they have it...and thus we get the credit crisis and those who have spent way beyond their means.

Sorry...got long winded, when I didn't fully intend to.  But we may have to start looking a lot closer to home for the blame for our economic and credit issues.  It might be a hard pill to swallow for a great many, but it's the truth.

Now where'd I put the plastic, time to order a pizza and watch Avatar on blue ray.

Fool on.... 

Report this comment
#6) On May 05, 2010 at 11:11 PM, TMFLomax (45.96) wrote:

goalie37

Yeah, I'm pretty baffled too. It obviously just can't go on like it's going... so it seems like an extreme reality disconnect.

 TDRH

I agree with those concerns (and that yeah, inflation is coming, I've been worried about that for a long time), and yeah a correction in the standard of living indeed since so much has been arguably artificial and fired up by debt and yeah, stimulus. And I do wonder if people here are going to be able to cope with a major change. I hope that folks won't go absolutely sideways but... yeah there may be a similar reality disconnect, an inability to really get what's going on and why it doesn't fit the reality they have come to expect and almost take for granted that that's just the way it is. (And yeah, sigh, I would imagine GS is hedged for it.) 

I mean, last year in the wake of the financial crisis mode of late 2008 I think a lot of us were kind of feeling this way, but it's like the problems just kept getting pushed further down the road and then this nutty rally has made people feel like things are "fixed"... I don't think they are. Whew.

Report this comment
#7) On May 05, 2010 at 11:21 PM, TMFLomax (45.96) wrote:

MikeBobulinski

Right, a heck of a lot of American consumers definitely don't know much about belt tightening these days. I think i remember reading a WSJ article early in the recession quoting people who felt very put out giving up their second cars or not being able to eat out every night or having to forego manicures or something even though they'd been unemployed for quite a long while -- kind of the same thing though, "but you don't have income!" Reality disconnect. Yeah, people have come to expect a heck of a lot here and we are pretty spoiled. Which again, doesn't exactly bode well if the standard of living must change. It is a scary thought.

But... I do have to say, Avatar was a very fun movie, good escapist enjoyment, so do enjoy that after all this distressing talk. :)

Report this comment
#8) On May 06, 2010 at 2:33 AM, SnapDave (61.42) wrote:

Alyce,

'Greek Tragedy'?  Surely that's a cliche by now!  I like 'PIIGS getting slaughtered' a little more.  It hasn't been overused yet. 

Report this comment
#9) On May 06, 2010 at 8:46 AM, TMFLomax (45.96) wrote:

SnapDave

Yeah, I'm a little embarrassed that I couldn't come up with something more original but it still seemed so fitting. It's a little like "green shoots" from last year... overused.

Report this comment

Featured Broker Partners


Advertisement