Really? Because Greece does have idiot protestors and that country has more than it's share of wealthy people and is in far worse shape than the US.
That's not entirely true. Germany has a much higher Debt-to-GDP ratio than the US, for example - similar to France, and higher than the UK as well. They borrowed plenty of money, but they were more efficient at using it for productive purposes than Greece and other EU countries. As a result, they are the strongest economy in the Eurozone.
Germany did raise it's retirement age several years ago, and it's higher than Greece's. Greece also wastes a lot money because of the massive corruption in their society that Germany doesn't have. I would also bet that lots of Greeks hold worthless government jobs, while Germans have productive jobs.
Yes, the US has a somewhat similar problem. At this point we can pay for it, but if we keep it up, we won't be. Krugman has said we definitely need to save more after the crisis is over.
German civilians are much more frugal minded and their economy is export driven. I think there were calls by their government during the worst of the recession to spend more to prop up demand. Their banks and government isn't in the best financial shape, but I think the German people have a right to feel angry.
IMO they are responsible for the corruption, for the tax evasion in the higher bracket, and for the current crisis. Clearly, there is a disconnect between the people and the government, and this disconnect was silenced through overspending in a "hush money" kind of way. If the kids are spoiled, most likely it's mom and dad's fault. That's why they're whining right now. Because no one told them they are living beyond their means - instead, they were told that Greece is such a super-duper country and loves its people so much, that it can spend at this level forever. Btw, I wasn't supporting WHAT the protestors were saying as much as the fact that they ARE saying it. They've hit reality now, and they don't want the higher taxes without some kind of guarantee that the middle class won't carry all the burden as they have been doing. A country can live beyond its means in many many different ways, I agree.
What burden has the middle class in Greece been carrying? The average person is involved in much of the corruption in Greece. When they pay taxes, instead of paying the whole amount, they give the tax collector a part of what they owe, pay the government part, and keep the rest. The average middle class person also has a cushy, benefit laden government job that is highly unproductive.
First of all, this happens quite often with the upper class, and less often as the income level goes down. Secondly, what if the tax collector said "no"? There will always be people who are willing to try to bribe the tax collector. Imagine that the tax collector in your country gets paid a lot less than the one in Greece, but the one in Greece is the one taking bribes like nobody's business. Do you think me and you both know about this going on and no one in the Greek government has any idea that it is going on? Do you think there would be massive rallies and protests because the tac collector started collecting all the tax instead of part? I understand what you're saying. But every example in the history of mankind has shown that the government's willingness to engage in corruption guides the country in a certain direction, and the government's unwillingness to do so guides the country in a good direction. There's no difference between people of this country or people of that country. We're all human, we all largely act the same way as a group given the same set of circumstances, background, etc. There's nothing genetic or specific saying Greek people are lazy, frivelous, corrupt, evil, etc etc. The government of the people gotpower and money hungry and deceived its own people. At that point, the government ceased to represent the people and they have lived in a perpetuating state of disconnectedness ever since. IMO, Greek people DO need to tighten their belts. But I don't blame them for being pissed - they were fooled by their own representatives and were led to believe they were living a sutainable life. Anyways, they'll be back on their feet hopefully and put in place better representation in the future.
No one is arguing that Greeks are genetically different. Yes, we are all human, but some humans make stupid choices. The Greeks got the government they wanted. They were quite happy with their government jobs, the debt they were accumulated at low interest rates, the benefits of the euro, their early retirement dates, etc. Of course the government knew what was going on, and so did the people. It isn't about blaming one or the other, they were both stupid. If there is a reason for them to be angry, it's that they got suckered into being part of the Euro. Without control of monetary policy, they can't devalue their currency, which would be a better option than austerity measures.
I actually had a 1-day business trip to Greece earlier this week. From what I've been told the greek protestors are pissed b/c 1) their government (with the aid of Goldman Sachs) had been cooking their books for 2 years, lying to the public about the financial situation while the elite were able to transfer assets out of the country prior to this collapse 2) those working in the government do not really have the cushy jobs which many would expect. the salaries in greece are not typical of those in america. you have civil servants and teachers earning 700-800 euros a month for instance. so this is not a protest calling for a continuation of lavish lifestyle - they are worried about how they will eat In any case, I expect to Greece to eventually default even with the bailout. They should have just defaulted now. But the German and French banks who own most of their debt obviously want to get paid back. The German and French governments want to keep the Euro on lifesupport for as long as possible. And the always eager IMF wants to get their 'programs' instituted there. So the average Greek is going to get squeeeezed for now.
The Greek protestors are full of poop. Yes, they are worried about how they will eat now that they will lose their cushy jobs. But they are cushy. http://www.nytimes.com/2010/02/07/business/global/07greece.html?pagewanted=1&em DIMITRIS DAMIANIDIS is a high school teacher and a strong supporter of Greece’s socialist government. But that won’t deter him from going on strike with hundreds of thousands of other public sector workers next week to fight for the 28,000-euro pension that he expects to receive annually after he turns 60 next year. ... Over the past decade, Greece took full advantage of a strong euro and rock-bottom interest rates to fuel a debt binge by the country’s consumers and its government. Now, if Greece can’t persuade investors to buy 53 billion euros of its government debt this year, it may have to seek a bailout from its European Union brethren or the International Monetary Fund — or, worse, to default ... Like many public-sector workers and civil servants in Greece, Mr. Damianidis has led a comfortable middle-class life over his 34 years working for the state. His house is paid for, he can afford to go away for a two-week vacation every year, and he has a daughter in a private school. His job is protected by the constitution, and the pay of public sector workers has doubled over the last decade. Much of the increase for workers like Mr. Damianidis is from bonuses, which the government wants to cut. In 2009, striking farmers were paid 400 million euros by the government — and this year they are back again, having briefly closed Greece’s border with Bulgaria. Protesting dockworkers extracted big payouts from the government in November. And the country’s tax collectors went on strike on Thursday even though their services are needed more than ever. (Anyways, there's a lot more in there, and it doesn't make the middle class Greeks look like victims by any means. Making this into a class warfare thing is a stretch to say the least. They need to give back all of the cushy benefits they "fought" for.) The only other way out of this is for them to leave the Euro.
Here's the thing, and Krugman made this point in a column...but EVEN IF GREECE'S DEBT WAS COMPLETELY FORGIVEN, THEY CANNOT FUND THEIR CURRENT LIFESTYLE. That is how out of whack their budget is. So, no, it isn't about those evil banks and the IMF squeezing the life out of Greece.
They were both stupid. They are all stupid. This is why a coutnry needs to put a responsible party in place to take care of its interests (government). The government failed to do that. Again, I don't think the people knew what they were getting into. They were happy as long as they were raking in the cash at the upper and upper middleclass levels. Those people have all moved their money out, and everyone else is suffering now. To summarize, the upper class knew what was going on and had plans in place. Everyone else was happy with their mediocre lifestyle, while being put under the impression that it was sustainable. It was not. The government did not come out and say "HELLO, THIS IS RIDICULOUS." They stayed quiet. Also a key factor that I'll repeat once more, the government does not represent the people in this case. The government has acted for itself, and in order to do that, they fooled the people. The notion that "oh the tax collectors are making tons of cash" is important as long as the tax collector is considered a part of government and a part of the people. He is not. He is government, and government is disconnected from people in this case. A tax collector job is like a dream come true in Greece. Almost all of those people know that once they get into that job, they will make tons of money off bribes. That's why these jobs are handed out selectively through favoritism rather than going through a merit-based approach. Sort of an old boys' club. Every Greek student graduating out of school was and is screwed, unless they go the route of corruption. If you start a business, pay all your taxes and try to make an honest living, you're most likely to fail. The cycle repeats. I think it's the government's responsibility to kill corruption in the government. The government and the people consequently made mistakes, but they are all effects of the same root cause - government corruption with no will to stop it. You solve this problem, everything else goes away.
But these protesters aren't protesting their government's corruption. They are protesting the austerity measures - in other words, they are protesting the government's attempt to fix the problem. Mom & dad may have started it, but these people are adults, and they continued to vote in the government that did all this. They continued their parents' practices of corruption, greed, and laziness. So they can't just blame everyone else (the gov't, their parents) for the problems. Fair enough - but I don't think they've hit reality now. I think they want all the good and don't want to accept any of the pain. That's why they are protesting austerity and blaming Germany (and the US, somehow) for their problems and for demanding all the terms of their bailout. In a lot of ways, it's like Iceland. Europe bailed them out when they were on the verge of bankruptcy in 2008 and then a year later, they voted not to pay back the bailout money because they didn't like the terms of the debt. These people are wanting to be bailed out without suffering any consequences.
Also worth noting is that Greece has a history of defaulting on it's debt. It defaults, on average, about once every two years since the 1800's. This wouldn't be a huge problem this time if not for the Euro and the potential for contagion. They would partially default and inflate their currency, some banks would lose money, and the world would move on.
They are protesting more than just the austerity measures. For instance, spray painted all over the place there are the words "IMF GET OUT!!" This doesn't get reported by CNN or the NYTimes, however.
That's the same thing. The IMF and EU are the ones imposing the austerity measures in exchange for the bailout. They are pissed that these external organizations are requiring Greece to fix its financial mess.
