The horizon is not so far as we can see, but as far as we can imagine

Shock Therapy in Greece

Whatever the problem, the solutions are always the same:

This austerity plan aims at saving some € 4.8 billion at the expense of the Greek population, for the purpose of repaying creditors. The money saved will also be used to pay the fees of Goldman Sachs, a bank which we now know helped the government conceal part of its debt. Among the measures to be taken:

- a freeze on recruitment and reduction of civil servants’ salaries (heavily reduced 13th and 14th months, reduced bonuses, coming after a 10 % decrease in salaries decided in January);
- a freeze on retirement pensions;
- VAT increase from 19% to 21%, despite the fact that this is an unfair tax that hits poorer people harder;
- dramatic cuts in social budgets, including the Social Security budget.

Somehow progressive tax increases never seem to occur.  Somehow a pan-European Tobin tax never happens.

The interesting question though is this: how many European governments played the exact same games Greece did?  How many are concealing their true fiscal picture, which is much worse than people think?

The answer, dear friends, is most of them.  Including the Germans, who have been acting very high and mighty.

The only people in the world even stupider about financial engineering than the US were the Europeans, who bought toxic waste by the boatload.

They forgot what Americans forgot.  There’s no free lunch.



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  1. John

    “They forgot what Americans forgot. There’s no free lunch.


    It seems that the people of Iceland, who were kinda grifted into picking up the tab for their recent very luxurious lunch with a wink and a nod that it would essentially be free, now seem to want to dispute the bill with the waiter and maybe even management.

    The saga continues, will Iceland bolt on the lunch bill, will they be consigned to eating fish and reindeer forever, banished from the mall, persona non grata in the marble halls of capitalism? Will the police be called? Or will they be left alone to stew in their hot springs and occasionally leading adventure pony treks for
    some foreign exchange?

    The big question: will their example lead others to dispute the bill? Perhaps, even the Greeks?

  2. senecal

    And why not the US? Are not the Greek austerity measures a mirror of what is already happening in the US, in California e.g.? Some state employees’ work week reduced to four days (pay reduced by 20%); state pension funds broke; health clinics closing; public university fees dramatically increased.

  3. jumpjet

    They should all refuse the bill. The Greeks should riot, the Icelanders should riot, the British should riot, the Americans should riot. Don’t just refuse the bill, rip it up and fling your leftover wine at the manager for good measure.

  4. Lex

    Somewhere, someone is cackling about how their diabolical plan is coming together perfectly.

  5. anonymous

    It’s especially galling in a place like California, which is just filthy with rich people who don’t pay that much in taxes. There’s plenty of money to pay for all these problems. And the people and classes *with* the money are usually the ones who got to eat most of that lunch.

  6. They seem to have figured out that Wall Street can’t be trusted. Of course, you could put that decision down to blaming foreigners for their problems, but at least they found some worthy foreigners to blame.

  7. Formerly T-Bear

    @ Cujo359

    That has got to hurt:

    Europe bars Wall Street banks from government bond sales
    • Leading US banks blamed for triggering financial crisis
    • Policymakers propose a rival European monetary fund

    “Governments do not have the confidence that the excessive risk-taking culture of the big Wall Street banks has changed and they still cannot be trusted to put the stability of the financial system before profit,” said Arlene McCarthy, vice chair of the European parliament’s economic and monetary affairs committee. “It is no surprise therefore that governments are reluctant to do business with banks that have failed to learn the lesson of the crisis. The banks need to acknowledge the mistakes that were made and behave in an ethical way to regain the trust and confidence of governments.”

    Trust is such an ephemeral value.

  8. Celsius 233

    Well, when you’ve bought the company program hook, line, and sinker; don’t get upset when the bastards are in your britches. Iceland seems to get it, maybe.

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