Tuesday, September 13, 2011

National Debt - Greece & The United States

The odds are now better than 50/50 that Greece will default on its National Debt.   The opposition party in Germany is now calling for an "orderly" default.   What that means is that primarily Germany, France and Britain will need to bail out their banks, rather than continue funding Greece's outrageous entitlement programs.   Thankfully US banks have minimal exposure to Greek debt, so if Greece goes down, US banks are sufficiently capitalized to take the hit. Germany, France and Britain will soon come to realize that bailing out their banks is the preferable option, since the Greek government cannot eliminate many of the cradle to grave nanny state benefits that have been in place for years without causing riots in the street. 

Even so, in an effort to keep German money coming in the door in the next few weeks, presumably to avoid default, the Socialist government in Greece just enacted a new property tax that will be administered as part of monthly electric bills.   Seems odd, except for the fact that many Greeks are notorious tax cheats, which is the reason the Greek government is making this tax a part of electric bills.   However, since the Greek government is Socialist, this new property tax will not just be based on property valuation, which is normal; but rather also family size and ability to pay in the name of "social justice".  Sound familiar.  Of course, the unions that work at the state owned electric companies have already said that they will not allow the electric company to be the government tax enforcement agency.   So we can expect to see more riots in the streets and union strikes in the next few weeks, which is what ultimately will cause the Germans to say enough. 

Ironically, two world wars were fought to prevent the Germans from controlling Europe.   Yet since he who has the gold makes the rules, the Germans whether they like it or not own Europe lock, stock and barrel.  If there ever is a United States of Europe, it will really be a United States of Germany.  Usually ownership is a good thing if an asset is worth owning; but in this case, it is a major liability.  The question is how long will German tax payers want to support Greece, Spain, Italy, Portugal, Ireland and perhaps other Socialist countries in Europe that maintain welfare systems that are unsustainable.  These countries are all bankrupt by any standard.   In the next few weeks, Greece will simply run out of money to pay all its people on the dole.  If Greece defaults, which is likely, it will become very difficult for the other countries listed to sell bonds to fund their operating expenses.   Keep in mind, government treasury bonds were supposed to be used to build schools, bridges, roads etc. not to fund entitlements as is happening both in Europe and the United States. 

As goes Greece, goes the United States.   As of now the US has a $15 trillion National Debt, that is 15,000 billion dollars.   Our National Debt is slated to grow to $16.7 trillion in the next few years under the deal just approved by Congress with no end in sight.  This does not include another $100 trillion or more (no one knows for sure) of unfunded liability for Social Security, Medicare, Medicaid and federal pensions.    Since beginning in 1965, politicians of both political parties stole the Social Security contributions going to the government to pay for normal annual operating expenses, that money is not sitting in the Social Security Trust fund to pay for Baby Boomer pensions.   As such, if reform doesn't happen and soon, Social Security and Medicare face bankruptcy in the next 10 - 15 years. 

Yet President Obama and his Socialist pals in Congress, like many politicians and people in Europe don't get any of this.   They go on spending money they don't have business as usual.  The Irish Prime Minister recently rejected a suggestion from a German member of the European Central Bank that Ireland needs to cut their entitlements and civil service pay further to deal with their National Debt problem.   Clearly, the US needs to get serious about dealing with our deficit spending and entitlement programs NOW to prevent what is happening in Europe.   This Blogger has called for a hiring freeze to  eliminate of 500,000 US federal civilian jobs in the next five years, out of the 2.65 million, through normal attrition, not lay off's.   In doing so, it will lead to badly needed elimination and/or consolidation of programs, departments, agencies, and commissions etc.   In addition, federal compensation and benefits must be brought in line with what is common in the private sector to bring down costs 20 - 40% to reflect the real world.  This common sense approach to cutting expenses should be adopted immediately.   Why aren't members of Congress advocating this logical approach?

And, it is time to deal with entitlements.   Medicare should be means tested for everyone right now.   As it is now, the monthly contribution for life time Medicare only covers about 50% of the cost because people are living so much longer.   Clearly, those with assets that can afford to pay higher premiums, including this Blogger, should be asked to pay higher premiums.  This is already happening to some degree; but it needs to go further.  The retirement age for full benefits for those under 55 should be raised to 68 years old.   And, Social Security should be made actuarially sound.   If someone dies, it should end, not be paid to the spouse, or other beneficiaries.  

In addition, the Social Security system should not be used to fund Disability benefits as is apparently happening now.  More than a million people who have run out of unemployment benefits recently applied for permanent Disability benefits even though they certainly are capable of working.   The definition of Disability is much too broad.   Someone with arthuritis, high blood pressure, or Diabetes, which is a significant portion of the population, is not disabled.   They certainly can work with these diseases as many who are honest now do.   As we get older, we all have ackes and pains, so what. 

We have to get our fiscal house in order to avoid what is happening in Greece.   Greece has lost its national sovereignty.   The Germans are calling the shots in Greece.  Foreign countries, including the Chinese in particular, own about 50% of our National Debt.   When the day comes, as surely it will if we don't change our current course, it will be these countries telling the US what to do to avoid default.   When that day comes, we will lose our national sovereignty.   We can't let that happen.  

Unfortunately, President Obama and his Socialists pals in government at all levels are focused on their PEEP's, those that pay no income taxes at all, those on the dole, illegal aliens, public employee unions and companies that benefit from crony capitalism that contribute to Socialist campaigns.   Socialist are only concerned about staying in power.   They cannot win elections without the support of their PEEP's, which is the reason they cannot represent the interest of the United States, or all the American people.  The class warfare that they argue says it all.  Socialists only care about their PEEP's, to stay in office, even if it means the demise of our country. 

To prevent what is happening in Greece, we must sweep these Socialists, including President Obama out of office in 2012 and 2014.  Our nation is at stake.  It is just that simple.   We must take back our country in 2012 and 2014 to get our fiscal house in order.   We must elect rock solid Conservatives that get it and support free market capitalism, limited government, lower taxes and less regulation, a balance budget, term limits, real education, energy, health care and entitlement reform, a strong national defense, including securing our border and fighting Terrorism, the right to bear arms, the sanctity of life and family values that are the foundation of our nation.   This is the platform supported by the majority of the American people and the only way to restore economic growth and job creation again in our country. 

As goes Greece, goes the United States.   We can't let that happen.  Educate your friends, relatives and neighbors so that they recognize too that we must take back our country in 2012 and 2014, by sweeping these Socialists out of office to prevent riots on our streets, economic chaos and collapse.   We can do it.   We must do it to preserve our freedom, our nation and way of life for the sake of our children and grandchildren.  

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