Why America Should Be Afraid Of Becoming Greece Or Spain

You've no doubt heard a parade of endless right wingers like crazy uncle Ron Paul and supposed moderates like Lindsey Graham warning their viewers to be very frightened that America is fast becoming Greece. "What is calamitous is the path

You've no doubt heard a parade of endless right wingers like crazy uncle Ron Paul and supposed moderates like Lindsey Graham warning their viewers to be very frightened that America is fast becoming Greece.

"What is calamitous is the path we’re on as a nation,” he said. “We’re becoming Greece.”

So they propose the same crap that the EU is demanding from their counterparts ie: 'Austerity, bitches.' Make sure the people suffer terribly is the only way.

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Thousands of angry Greek and Spanish voters outraged by more looming austerity measures took to the streets of Athens and Madrid on Wednesday, demanding their governments slow down budget cuts aimed at avoiding bankruptcy.In Athens, what started as peaceful protests by tens of thousands of strikers ended up with demonstrators throwing gas bombs and bottles at police officers."People were just protesting against the new austerity measures, and it suddenly started raining flash-bang grenades and Molotov cocktails, so we had to leave the square," said Maria Vasiliandi, 41, a public-sector worker who was taking part in the march.

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Spain has undergone two days of violent protests because of cuts to public benefits and jobs due to be announced in Madrid on Thursday for the 2013 budget. The cuts are an attempt to meet austerity targets demanded by the eurozone, the 17 nations that use the euro as currency, in return for financial assistance.

To date all countries involved in horrendous austerity cuts that are supposed to cure all their economic ailments is a major fail, but as usual all those that are forcing people to experience these hardships never have to feel their wrath. A recent NY Times editorial states this:

Demonstrators have been filling the streets of southern Europe’s capitals in numbers too large for politicians to safely ignore, protesting the latest economic austerity measures. Hundreds of thousands have turned out in Lisbon, Madrid and Athens, and more such protests are likely in coming days. The public’s patience is running out on austerity policies demanded by the German government and European Union leaders, which have conspicuously failed in their stated goal of reducing debt burdens and paving the way for economic revival. Instead, it’s clear that these measures will accelerate depression-levels of unemployment and damage social safety net programs when they are most needed.

Obviously comparing America to Spain or Greece is a ridiculous comparison to make. Paul Krugman says:

For the past two years, the Greek story has, as one recent paper on economic policy put it, been "interpreted as a parable of the risks of fiscal profligacy." Not a day goes by without some politician or pundit intoning, with the air of a man conveying great wisdom, that we must slash government spending right away or find ourselves turning into Greece, Greece I tell you.Just to take one recent example, when Mitch Daniels, the governor of Indiana, delivered the Republican reply to the State of the Union address, he insisted that "we're only a short distance behind Greece, Spain and other European countries now facing economic catastrophe."

By the way, apparently nobody told him that Spain had low government debt and a budget surplus on the eve of the crisis; it's in trouble thanks to private-sector, not public-sector, excess. But what Greek experience actually shows is that while running deficits in good times can get you in trouble -- which is indeed the story for Greece, although not for Spain -- trying to eliminate deficits once you're already in trouble is a recipe for depression.These days, austerity-induced depressions are visible all around Europe's periphery. Greece is the worst case, with unemployment soaring to 20 percent even as public services, including health care, collapse. But Ireland, which has done everything the austerity crowd wanted, is in terrible shape too, with unemployment near 15 percent and real GDP down by double digits. Portugal and Spain are in similarly dire straits.

So if their is a case to be made to America, it's this. Austerity sucks in times of recession. Don't believe me? Just look at the facts. And ask yourself this. Where is the proof that austerity has worked since the financial crisis hit? You can't find any except through empty words coming out of Germany or conservative hacks like Prime Minister Cameron.

Cameron indicated that Britain's programme of spending cuts, initially planned to take five years, could last until 2020."This is a period for all countries, not just in Europe, but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can't see any time soon when ... the pressure will be off,"
When the Conservative/Liberal Democratic coalition took power in 2010, it introduced an austerity programme of increased spending cuts and tax increases that was intended to finish by 2015.The programme was extended to 2017 late last year, however, and is expected to save the government about 110 billion pounds in total.

His solution is an endless austerity which attacks the people he's supposed to be trying to help. And by the way, it's really not austerity itself that is extending Europe's problems, it's those that prescribe it as a remedy that are killing the economy.

Krugman finishes with this:

So it is time to stop invoking Greece as a cautionary tale about the dangers of deficits; from an American point of view, Greece should instead be seen as a cautionary tale about the dangers of trying to reduce deficits too quickly, while the economy is still deeply depressed. (And yes, despite some better news lately, our economy is still deeply depressed.)

The truth is that if you want to know who is really trying to turn the United States into Greece, it's not those urging more stimulus for our still-depressed economy; it's the people demanding that we emulate Greek-style austerity even though we don't face Greek-style borrowing constraints, and thereby plunge ourselves into a Greek-style depression.

Amen.

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