Greek Austerity Riots

I already talked about the Greek debt crisis, but let's talk about why people are rioting. From their point of view, the debt crisis is not their fault. Economic prosperity and socialism has finally given them the standard of living that one normally expects in a European country. But suddenly, their government is telling them that debt has reached emergency levels and austerity measures must be implemented. This sounds dishonest and mean-hearted to the average Greek. They have worked, paid taxes, and seen their country grow - and now they are being told that they must pay the billions in debt that their politicians racked up. Why did their leaders not pursue a more sustainable growth strategy? Why did they expect that they could simply keep borrowing until a crisis set in? They knowingly drove their own country into the ground and they are now being made to pay the price in form of their reputations and careers. If they had started small austerity measures several years ago to reduce Greece's sovereign debt, some grumbling might have been heard, but riots would have been unlikely. But to immediately tax a populace and reduce their benefits is like grabbing a bull by the horns - you are going to get hurt.

Benny's Words of Woe

Ben Bernanke, the chairman of the Federal Reserve, is puzzling. He is the first chairman to hold a press conference, but it is anyone's guess as to why he does it. The public is skeptical of central bankers - and rightfully so. Ben has been indirectly taxing the American populace over the last several years by printing and distributing money. He has authorized trillions of dollars in bail-out loans to various firms, and he also intiated enormous treasury-buying programs that cost hundreds of billions. After all of this, he still seems to think that telling the American public that the economy is recovering "slower than expected" is a good idea. Granted, the public is skeptical of bankers in general after the financial crisis, and some transparency is appreciated by many. But how does he expect that telling people his plan is not working will encourage them to go out and spend? The greatest obstacle that the Treasury Department and Federal Reserve face today is a lack of investor and consumer confidence. Despite rock-bottom interest rates, investors don't want to invest; the economic climate is too uncertain. Similarly, despite the fact that money is losing value by sitting in the bank, consumers do not want to go out and spend. It's a psychological recession right now more than an economic one.

A Shortage of Reporting Makes For a Shortage of Truth

That's right! The Federal Communications Commission reports that there is a shortage of local reporting in our country. The FCC notes that "staffing levels at daily newspapers have fallen by more than 25 percent since 2001." This is due in large part to a decrease in demand for newspapers precipitated by the flood of new media channels in recent years. Why subscribe to a newspaper when one can just as easily check Twitter (make sure to follow us, by the way!) on their smartphone or computer or turn on the TV? Unfortunately, newspaper journalism tends to be more investigative than most news sources. This is due to the pressure on a newspaper's editors to actually fill the pages with interesting and relevant stories every day, rather than opinion articles and the often-seen "what household item will kill you?" stories on TV.

As a result of this loss of investigative reporting, there is less of a "watchdog effect" on local governments and businesses. Scandals may go unseen, waste may continue, and health dangers may not be remedied. As the report indicates, this severely weakens the role that the media is meant to play in American society; it is meant to keep an eye on government and local corruption, and to keep the populace aware of current events. Such a hole in the information industry paves the way for white-collar crime and other abuses of corporate power. Today we live in the information age, and it is increasingly more vital that the people hold the pen rather than those who would seek to do some selective publishing. For this reason, I believe that one of the more ominous obstacles that our society faces now and in the future is the monopolization of information. Any infringements on the First Amendment must be adamantly opposed, as they represent a major affront to mental freedoms for each and every one of us.

My Big Fat Greek Debt Crisis

Greece is suffering from the worst debt crisis in its history. Its two-year bonds yield 23.26%, signifying a total lack of investor confidence in the Mediterranean country's ability to pay its debts. This collapse was brought about by an irresponsible, spendthrift Greek government and a lack of warning from international institutions. Greece industrialized itself based on loans and a bloated public sector made to provide jobs. The corruption in its corporate government, which neutered itself by becoming part of the Eurozone, has resulted in austerity measures being implemented to appease the bankers at the IMF. Unfortunately, these measures ultimately hurt the Greek populace. With an unemployment rate of 15.9% and inflation at 3.9%, many Greeks are out of work while prices continue to rise.

Of course, the bankers in Germany and France would have you believe that the Greek debt crisis was brought about by a spendthrift populace. Such a burden cannot be placed upon the shoulders of a people whose only goal is the pursuit of happiness; it must be placed upon those corrupt leaders who continued to build up sovereign debt without a plan for repayment. It was as if the Greek government had never heard of a rainy day fund - it seemed as though the country's economic expansion would last forever. Unfortunately, that dream was quickly and brutally turned to a nightmare in 2008. The Greek government's foolish policy of consistently holding debt larger than the country's GDP (a problem that America faces imminently) finally turned sour when it was found that corrupt government officials had been hiding Greek's real debt situation by purchasing financial products that could hide the true value of the debt. When this fraud was brought to light, Standard & Poor's, the investment rating company, downgraded Greek bonds to a junk investment.

The fault here lies with the Greek government, the bankers at Goldman Sachs that helped to hide a country's debt problems from its creditors, and the bankers at the IMF that wish to force Greek's government to redeem itself by hurting its citizens. The people must continue to say "NO!" to the government's attempts to shift its financial difficulties onto them after years of lies and embezzlement. If the Europeans truly consider themselves a union, then they will enact job programs for the Greek people and mandate a complete restructuring of the Greek government, including prosecution of the frauds who caused this crisis. Stringent penalties must be imposed for altering financial details in the union, and offending parties should be ostracized as traitors to their countries. It may have taken Greece a few more years to industrialize without debt up to its mountains, but in the end its people would not have borne the burdens created by their incompetent leaders.

What's a ceiling again?

Over the past week, our representatives in congress have feverishly debated the idea of raising the United States government's legal debt ceiling. Let's take a look at what that would mean first. The debt ceiling currently sits at $14.3 trillion. That means that if we hit that number (and we will on August 2nd), then the government has to shut down and stop borrowing money. That would also mean a major loss in non-essential services - federal parks, entitlement checks, many government agencies, et cetera.
   The idea is to raise the ceiling to $16.7 trillion. That would allow the federal government to keep its budget for the rest of this year (Yep, $2.4 trillion in a year - no biggie, right?). Republicans refuse to pass such a law without major spending cuts - house majority leader John Boehner has put forth a letter signed by 150 economists that urges legislators that "any debt limit legislation enacted by Congress include spending cuts and reforms that are greater than the accompanying increase in debt authority being granted to the president." That sounds pretty cut-and-dry to me - stop spending more than we make. Isn't that the first rule of getting a credit card? I know my parents always told me that.
   It's not as if the Republicans are saints, though. Nope, this ain't no conservative apologist blog. They're the ones that got us into this mess. Take a look at this graph:

   A picture really is worth a thousand words, isn't it? In case you didn't bother looking and just skipped to more of my beautiful prose, I'll illustrate for you. The Bush-era tax cuts and the wars in Afghanistan and Iraq account for about 30% of GDP and more than half of the debt piled on what it would be without the recession. Those tax cuts also affect mostly the very wealthy in our country. The logic behind that is rich people don't keep their money under the mattress - they invest it to make more money. And when someone invests a lot of money, they tend to create jobs for other people. The problem is, you don't get a lot of that invested money back in taxes due to something called "capital gains tax." That's supposed to give people more incentive to invest because they get to keep more of the money they make. Makes sense, right? The problem is that Republicans refuse to let these tax cuts expire so that the excess cream at the top of the wealth cake can be put back into the private sector to help out entrepreneurs and innovators who drive competition.
   The national debt is a problem that neither side is truly willing to solve. Both parties dance around the issue, playing with the American taxpayers' money as if they were playing with cards. They are both a symptom in a larger problem, that being the confiscation of democratic rights from the average American to empower a small elite. These politicians spend our money without pause, but we will shoulder the responsibility in the end.