Greece: A cautionary tale

As Greece prepares to enter another round of seemingly endless negotiations with its creditors, it’s a good time to consider how the cradle of Western civilization became a bankrupt and broken nation.  

While its adoption of the Euro has clearly damaged Greece’s ability to respond to its various crises, the core problem is that the Greek government ran up hidden, unsustainable debts. It turned to international creditors for a series of bailouts and had to adopt austerity measures such as higher taxes and spending cuts. The fiscal crisis spiraled into an economic, social, and political crisis punctuated by the following:

·         A disastrous rise in long-term unemployment.

·         The closure of banks, causing major economic disruptions.

·         The rise in support for a far-right extremist party, and the assumption of power by a far-left Marxist party.

·         The emigration of 3 percent of the population, mostly young people, between 2010 and 2013.

 

How did Greece reach this point? A 2010 exposé in Vanity Fair describes how the government was shoveling money into the public sector, which had doubled in size over the previous decade. Taxes from private sector workers, who earned on average just one-third the salary of public employees, could not cover the bill, especially since tax evasion and bribery had become a kind of national sport. The writer explains the damaging moral effect this collectivist system had on the Greek people:

 

“No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible. . . . The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself.”      

At a time when the U.S. national debt is approaching $19 trillion, and when the country continues to accumulate tens of trillions more in unfunded liabilities on entitlement programs, Greece offers a cautionary tale showing that government over-spending is not generous or charitable – it’s destructive and it’s selfish, since it imperils a nation’s future generations. Balancing the budget is not just the first step in correcting our own perilous fiscal situation, it is a moral imperative.       

Dangerous times

The killing of four U.S. Marines in Tennessee yesterday is a stark reminder of the severe threats now facing the U.S. homeland. Radicalizing recruits worldwide through social media and using encrypted digital chatrooms to plot attacks, ISIS and other jihadist groups are looking for every possible opportunity to strike at the U.S. homeland. Americans everywhere ought to remain vigilant to these threats and resist demands to handcuff our intelligence community, which is working hard to identify and track foreign terrorists.

Unfortunately, the nuclear agreement that the Obama administration signed with Iran will not diminish these threats and may even intensify them. Iran remains the world’s primary sponsor of international terrorism, and there is nothing in the agreement that will change the regime’s behavior. To the contrary, the deal will relieve both internal and external  pressure on the mullahs, giving them access to new sources of cash to continue spreading turmoil throughout the Middle East and beyond.

I’d like to hear your thoughts as Congress debates and ultimately votes on the Iran agreement. I invite you to read the agreement for yourself here and let me know what you think by emailing me here. 

House acts to ease CA water crisis

Today the U.S. House of Representatives passed its fourth major California water bill in less than four years. Once again, we are moving legislation that will ease the devastating water crisis that is wreaking havoc on the Central Valley economy and pushing useful farmland out of production.

Although the White House and many congressional Democrats resisted all our previous efforts and are already opposing the new bill, we are working to convince them that something has to be done. As thirsty Central Valley farmers and families continue to watch their water get flushed into the ocean due to ever-expanding environmental regulations, it’s long past time that the government stop prioritizing fish over families.

You can read my extended article on the water crisis here and see my comments about the new bill by clicking on the picture below: