GayPatriot

The Internet home for American gay conservatives.

Greek drama update

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Greece’s Syriza-led government has basically folded, for now, in its debt negotiations with the rest of Europe.

A “complete political surrender to the world of reality” was how [one European bank analyst] put it. [Other analysts] labeled it a “u-turn” by Tsipras, who won election Jan. 25 promising an end to budget cutting.
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At last week’s meeting, Greece signed up to all the conditions of its current package and to continued international oversight, ditching plans to win back control of its purse strings so it could raise wages and pensions.

You can find GayPatriot’s backgrounder here. And some details on the new agreement, here.

Needless to say, many Syriza supporters are outraged. For example, one Syriza veteran of WW2 said, “…[Syriza’s] promises have not turned into practice…On my part, I APOLOGIZE to the Greek people because I have contributed to this illusion.”

My feelings are mixed. Pleasure at seeing a gang of socialists having to learn math, combined with dismay/sympathy for the Greek people – who probably shouldn’t cave in; they probably would be better off, in the long run, if they defaulted on their debt and left the Eurozone.

I don’t think this drama is over. I think it ends with either Greece or Germany leaving the Euro currency (later this year or perhaps in 2016), as the Eurozone simply isn’t big enough for both of them. But, as the saying goes, “we’ll see.”

Get out the popcorn: Greece is bringin’ the drama

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As AP reports, Greece has just gone (further) to the left by voting in their “Syriza” party. With 60% of the vote counted, Syriza leads with 36%, a blowout by Greece’s fragmented / multi-party standard.

Flounder of Delta House was reached for comment and said, “Oh boy, is this great!” Why would he? Because Syriza is a delightful mixture of the sane and the insane.

First, their key campaign plank has been to provoke a new crisis over Greece’s debt to the rest of Europe, including no small chance that Greece would default and/or leave the Euro currency. And that’s the sane part.

It’s sane, because Greece had entered the Euro under false pretenses and then borrowed far more than Greece can ever repay. Syriza is right that Greece’s debt problem is serious, and right that Greece’s solution may well be to default honestly and return to its former currency (the drachma), so that (after devaluation) Greece can be competitive in world markets. (Correction: Officially, Syriza wants to remain in the Euro. It’s just that no one else believes they can, if they’re serious about getting a haircut on Greece’s debt.)

The insane part is that Syriza calls their plans “an end to austerity”, “leaving austerity behind”, and so forth. The implication would be that, these last few years, Greece has buckled down and made painful, deep cuts to its public-sector spending. Yeah, except they haven’t.

When I last checked in 2013, Greece had still not made significant cuts to government spending after years of crisis and supposed austerity. (Update: tradingeconomics.com figures say that Greece did cut spending in 2010-2012 and has already started to reverse the cuts. In 2014, Greece’s spending was near its all-time high from 2009.)

As I’ve explained before, “austerity” is just the Left’s code word to mean “We aren’t being allowed to spend wildly enough!” If government stays as big as ever – if government has merely a small pause or slowing of its growth – the Left screams about the horrible austerity.

Likewise, “ending austerity” is the Left’s code to mean they get to grow government again and basically have it consume the rest of the economy (whatever it doesn’t own already). That is what the Greeks just voted in. A party that (wisely) wants to provoke a crisis over Greece’s debt; so that it can (stupidly) have even moar of the high-spending, Big Government policies that bankrupted Greece in the first place.

Something tells me the Greeks are about to find out what austerity really is.

Obama, not fixing his Debt Bomb

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Last week, President Obama released his new budget proposal, which in February he said would be the end of austerity. First let’s ask, what is meant by “austerity”? As a policy, was it ever tried?

As discussed by myself and others, “austerity” means tax hikes (not spending cuts) in practice. Lefties hurl the word “austerity” to demonize the idea of spending cuts. But few of the countries which left-liberals accused of cruel austerity in the last few years cut their overall government spending levels; the majority continued to increase spending. So spending cuts can’t explain those countries’ poor economic results. What can? Well, most of them raised taxes.

Clearly, we should end (or reverse) the tax hikes. That would be a great “end of austerity”. But Obama’s meaning is that we should undertake spending increases; which, for reasons touched on below, probably mean deficit increases.

Before going into Obama’s proposal, let’s review the current state of the U.S. budget. [Read more…]