California Is America's Big, Fat Greek Tragedy

Greece is the insolvent, bankrupt country that threatens to bring down the entire EU (European Union) with its exploding and toxic national debt. But it’s just one of the PIGS- Portugal, Italy, Greece and Spain. The EU is damned if they do, damned if they don’t. If they choose to bail out Greece in order to save the union, soon they’ll have much bigger bankrupt nations to deal with (Portugal and Spain are next in a long Conga line). There isn’t enough money in all the world to bail out all of them. The EU is in big trouble.

But the real problem is that Greece isn’t the worst Greek tragedy on the horizon. Greece is only “the canary in the coal mine.” The United States is one big fat Greek tragedy. We are Greece- SQUARED. All the same problems that plague Greece, plague this country- huge national deficits and debt; high unemployment; gigantic entitlement programs; too many government employees; not enough tax revenues coming in; endless bailouts and stimulus; and pension and healthcare systems (Social Security, Medicare, Medicaid) that threaten to eat every dollar of the budget. Just the interest on our national debt is enough to destroy our economy. It’s all a Greek tragedy.

America is Greece- except on a much grander scale. Our economic collapse is still a year or two down the road. Obama is laughing, celebrating, dancing and handing out gifts (stimulus, bailouts, entitlements, corporate welfare) at a big fat Greek wedding…oblivious to the the coming economic Armageddon…oblivious to the madness of his plan- to triple down on spending to save us from insolvency.

But it didn’t take Greece to warn America of the impending doom. California is our Greece. I warned long ago that Obama’s stimulus plan was a disaster. That handing out $120 billion dollars to state and local governments so that they could prevent layoffs of government employees; hire more teachers and government employees; and actually protect raises for government employees…was pure madness. I pointed out at the time that state and local governments across the USA were bankrupt and insolvent. The only possible solution was massive cuts in government spending and layoffs of government employees (just like the private sector). I pointed out that once the stimulus ran out in 2 years, we’d have the same exact problem…except with more government employee salaries, pensions and health care to pay for. All we did was kick the can down the road a bit. We delayed the inevitable economic disaster- just as Greece has done for decades, just as California has done for years. But the day of reckoning is fast approaching.

California is still insolvent and bankrupt…so are most state and local governments…now we have more government employee mouths to feed…more pensions to pay…how will we pay the even larger bill once the stimulus runs out? Where is the next stimulus coming from? How do we pay back the $2 trillion that the Fed has printed? Where are the tax revenues when everyone is a government employee?

All the king’s men…all the countries of the world…all the bankers and Goldman Sachs partners…cannot pay the bills that are coming due for America. The national debt has zoomed past $100 trillion. As a sign of things to come, our December deficit doubled in the past year. Obama’s budget pressed the pedal towards Armageddon- by spending more than all the budgets of all the Presidents that came before him, combined.

The old saying goes, “A trillion here and a trillion there…pretty soon we’re talking about real money.” Well let’s give you some perspective of the trouble we are in. Greece owes $300 billion to the banks. That amount…from a tiny country…threatens to bankrupt banks across Europe and bring down the entire EU. Yet Obama spent $800 billion in one stimulus bill last year. That stimulus by the way, created zero jobs. ZERO. He wanted to spend a trillion more on his expansion of government-run healthcare. If $300 billion can bring down the entire EU…and make big European banks insolvent…who can possibly bailout America’s $100 trillion tab? Just one state- California- is in similar shape and facing the same kind of economic collapse as Greece.

The lesson we must learn is that government cannot spend taxpayers’ money endlessly; that not everyone can work for government; that not everyone can depend on government for survival; that government cannot give raises and bonuses to government employees in a depression; that big pensions and universal healthcare bankrupt nations; that unions are poisonous to the survival of an economy; that “spreading the wealth around” is a failure whenever and wherever it’s been tried- Argentina, Greece, California. The socialist experiment is a disaster.

Now we wait…as the clock ticks…to see if we can avoid becoming the next Greek tragedy that pushes the world towards a second Great Depression.

Wayne Allyn Root

February 18, 2010