May 13, 2012
The financial crisis in Greece is reaching an explosive tipping point, with the youth unemployment rate now exceeding a startling 50 percent and the government itself announcing it will be forced to stop paying salaries and pensions by June:
“We will be in wild bankruptcy, out-of-control bankruptcy,” said Theodoros Pangalos, the deputy prime minister of Greece. “The state will not be able to pay salaries and pensions. We have got until June before we run out of money.” (http://www.telegraph.co.uk/finance/financialcrisis/9262068/Greece-wil…)
The prime minister is further concerned his country could collapse into fascism. “You know how it happened in Germany — it started with the Jews, then the Communists, then everybody — it could happen here.”
The problem is that, like most of the western world, Greece has been living on borrowed capital for decades. The left-leaning social programs, government handouts, bloated salaries of outrageously corrupt government officials and failed economic policies have thrust Greece into economic despair. And unlike the USA, Greece cannot simply print its way out of its debt crisis. So it is headed into an era of what can only be called a financial implosion that may ultimately lead to mass rioting, social unrest and potentially even revolution.
California follows in the footsteps of Greece
Back in the USA, the state of California is accelerating toward much the same outcome. Suffocated by the terminal financial burden of leftist social programs, welfare handouts, runaway social services and health care costs for its millions of undocumented residents, California is also headed for its own financial implosion.
“We are now facing a $16 billion hole, not the $9 billion we thought in January,” said Gov. Jerry Brown in a recent New York Times article. “This means we will have to go much further and make cuts far greater than I asked for at the beginning of the year.” (http://www.nytimes.com/2012/05/13/us/huge-new-shortfall-predicted-in-…)
It also means that under the lackluster leadership of Gov. Brown, California’s dire financial situation has only grown far worse.
His proposed solution is proof that Gov. Brown earns an “F” in economics 101. He wishes to impose an “income tax surcharge” on so-called “wealthy Californians,” which sooner or later will come to mean just about anyone working for a living. This foolish taxation policy will, of course, only have the unintended effect of causing wealthy business owners to flee California and take all the decent-paying jobs with them. This, in turn, will leave California saddled with a rising population of unemployed workers and a shrinking population of wealthy business innovators who account for 90 percent of the real job creation in California.
The result of all this, not surprisingly, will be a downward spiral of compounding debt and the eventual fall of California’s infrastructure into third-world status. Many of the roads in Los Angeles have already achieved this level of disrepair, by the way.
Such is the devastation of socialist economic policies. By worshipping Big Government and the false hope of a perpetual free lunch, the people of both California and Greece have put themselves on an irreversible course into the painful brick wall of financial wipeout.
Greece will fall first, of course, but California’s financial collapse won’t be far behind. No state or nation that abandons the principles of economic freedom, small business innovation and private sector job creation has any real economic future, after all. Government-directed socialist economic policies always fail sooner or later. For a nation, any divergence from the path of liberty, economic freedom and small government inevitably and predictably leads to collapse.
Comments from readers in the New York Times:
Chris from Huntington Beach, California
“That is what happens when years of high taxation and regulation drive all the business from California to Nevada, Arizona, Utah and Texas. And the solution from Sacramento is always higher taxes and more regulations.”
Judah from Amarillo, Texas
“California has no where to go but down. It is the great liberal social and economic experiment gone bad, and it should be a warning to all other states. Furthermore, this model is the vision of President Obama, and his continued popularity demonstrates the abysmal understanding by voters that government cannot babysit them through life.”
S Kelly in Folsom, California
“No big Surprise that CA has a huge budget deficit. Only those in denial could miss that. And no surprise that CA government will pretend they didn’t see this coming. Now, in faux shock, they will try to cut EVERYTHING but their own salaries. I live in CA and know the Assembly would rather see the patient dead than take a personal cut in their own benefits or any gov’t paid pensions.”
F Wank in California
“Time to pay the piper. Sooooooo glad California extortionists (politicians) are arriving at a crossroads. Private business was the base upon which California politicians extracted their punitive taxes. Now that private business tax base is going away. The parasite got too big! Hahahahaha, socialistic policies will always fail. Glad to see it finally happening to California. This state needs to fail, needs to go into bankruptcy… and I will sing with joy! Why? Because this is proof positive liberalism will fail every time!”
This article was posted: Sunday, May 13, 2012 at 4:58 am