Harsh Austerity Measures...


By LAO   Follow   Wed, 5 May 2010, 4:24pm   1,623 views   17 comments
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Could what's happening in Greece come to American soil?  I'd be curious to know how the DAY TO DAY life of Greek citizens has been affected by these "harsh austerity measures" that would cause hundreds of thousands to take to the streets and torch a bank and kill 3 people.

Seeing all the fist fights and egg throwing in foreign congress/parliaments on television and now bloody riots.  What would have to happen in the U.S. for the general population to revolt?  And how close were we when the market was crashing in March 2008?

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  1. mikey


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    1   8:25pm Wed 5 May 2010   Share   Quote   Permalink   Like (1)   Dislike  

    Possible but less likely here in Federation Territory.
    America seems to have endless credit.
    We are deflating and the Fed is keeping inflation in check. Many areas of the US have stable real estate prices and secure jobs.
    Loose monetary policy does take time to take effect. Hopefully the reins will tighten before more disastrous bubbles develop.
    I don't want the dollar store to become the five dollar store.

  2. Kevin


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    2   9:20pm Wed 5 May 2010   Share   Quote   Permalink   Like   Dislike (1)  

    May 1970.
    April 1992.

    Yes, people can and will riot when they have sufficient reason to.

  3. ZippyDDoodah


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    3   10:15am Thu 6 May 2010   Share   Quote   Permalink   Like (1)   Dislike  

    State/Federal/Local govt. pension plans are a massive problem which, if not slashed, could push us into Greek-like economic troubles. Given the deficit spending trends, it's a mistake to assume that the US is 'too big to fail'. We have a situation of govt employees retiring at age 50 or 55 with pensions that payout 50% - 90% of their highest earning years (often they artificially inflate the last earning year with overtime + sick pay) with insurance benefits on top of that. It's recently come to light the number of govt pensions exceeding $100,000/year + benefits, including some law enforcement officers in CA (as I recall) making over $500,000/year.

    It's a situation which, if left unchecked, will result in average Joes toiling at work at age 67 in order to subsidize the Caribbean vacations of 52 year old govt retirees. Let the states and local govts go bankrupt so that their lavish pension plans can fight it out in bankruptcy court like any other creditor.

  4. kentm


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    4   10:46pm Wed 12 May 2010   Share   Quote   Permalink   Like (2)   Dislike  

    Whats happening in Greece is that the public are being asked to pay for the failures of the speculations of the rich and very rightly are rejecting it.

    So yeah, whats happening in Greece has already happened in the USA, and was met with a collective yawn.

  5. Ptipking222


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    5   8:58am Thu 13 May 2010   Share   Quote   Permalink   Like   Dislike (1)  

    kentm says

    Whats happening in Greece is that the public are being asked to pay for the failures of the speculations of the rich and very rightly are rejecting it.
    So yeah, whats happening in Greece has already happened in the USA, and was met with a collective yawn.

    Actually, no, that's not the case at all.

    What you have in Greece are massive pension plans and overpaid government workers, who get bonuses just for showing up on time.

    Added to that is massive tax evasion by pretty much everyone in Greece.

    Greece has been in default half of the time for the past few hundred years. Letting it into the Euro was just dumb. Countries like that need to be on their own currency and allowed to devolve into default/inflation every now and then to pay for their largesse.

  6. Ptipking222


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    6   8:59am Thu 13 May 2010   Share   Quote   Permalink   Like (1)   Dislike  

    Stats are already enacting 'austerity measures' in some sense. California's furloughs, cutting of services, etc. are similar.

  7. kentm


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    7   12:04pm Thu 13 May 2010   Share   Quote   Permalink   Like   Dislike (2)  

    Ptipking222 says

    Actually, no, that’s not the case at all.

    Actually, yeah, it is.

    http://www.citywire.co.uk/personal/-/blogs/money-blog/content.aspx?ID=398084

    The BBC reports that as part of the IMF/ EU bailout Greek leaders are proposing the following measures:
    * Public sector pay to be frozen till 2014;
    * Public sector salary bonuses – equivalent to two months’ extra pay – to be scrapped or capped;
    * Public sector allowances to be cut by 20%;
    * State pensions to be frozen or cut, with the contribution period up from 37 to 40 years;
    * The average retirement age raised from 61 to 63, and early retirement restricted;
    * VAT to be increased from 19% to 23%;
    * Taxes on fuel, alcohol and tobacco raised to 10%;
    * A new one-off tax on profits to be introduced, plus new gambling, property and green taxes.

    Regardless of your personal feelings on the pension plans and speculation on the state of tax evasion in Greece, those are the measures being requested of the people in Greece.

    Why should they have to pay for the failed speculation of the banks?

    ...just like why should we have to pay for the same thing here?

  8. Ptipking222


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    8   2:32pm Thu 13 May 2010   Share   Quote   Permalink   Like (1)   Dislike  

    Because it's not the speculation of the banks that caused their problem. The Greek problem is very simple: the country pays out way more in wages/pensions than it takes in taxes.

    The austerity measures are aimed at reducing government payments and increasing taxes.

    Banks have nothing to do with that end of the problem.

    The banks are exposed because they lent Greece's government money (you deposit money in the bank, they lent it to the government). Not just Greece's banks, Germany and Ireland and others too lent to Greece's government.

    Greece's government was financially incompetent. So this is an issue of Greece's government screwing over the banks (though, I don't shred a tear for the banks, they just shouldn't have bought Greek government bonds).

    Either way, Greece needs to default or they need to do austerity measures. I favor default, since they're going to do it anyways, so why waste everyone's time. Either way, the citizens are screwed, and deservedly so, since you shouldn't count on your government for cradle to the grave welfare.

    If there wasn't austerity measures and Greece was on the drachma, they would have had hyperinflation and 20% unemployment, which is typical for these Club Med countries pre-Euro.

    You can argue that Germans and Irish and other Europeans (and even Americans to a much lesser degree) shouldn't have to bail out Greece and the other PIGS. Other countries citizens end up subsidizing these bailouts because their banks are exposed to Greek debt. That I would agree with you. If anyone deserves to be rioting, it should be in Berlin, not Athens.

    But screw the Greek people themselves, you can't have massive pensions/welfare and not pay for it and expect it to continue indefinitely.
    kentm says

    Ptipking222 says

    Actually, no, that’s not the case at all.

    Actually, yeah, it is.
    http://www.citywire.co.uk/personal/-/blogs/money-blog/content.aspx?ID=398084
    The BBC reports that as part of the IMF/ EU bailout Greek leaders are proposing the following measures:

    * Public sector pay to be frozen till 2014;

    * Public sector salary bonuses – equivalent to two months’ extra pay – to be scrapped or capped;

    * Public sector allowances to be cut by 20%;

    * State pensions to be frozen or cut, with the contribution period up from 37 to 40 years;

    * The average retirement age raised from 61 to 63, and early retirement restricted;

    * VAT to be increased from 19% to 23%;

    * Taxes on fuel, alcohol and tobacco raised to 10%;

    * A new one-off tax on profits to be introduced, plus new gambling, property and green taxes.
    Regardless of your personal feelings on the pension plans and speculation on the state of tax evasion in Greece, those are the measures being requested of the people in Greece.
    Why should they have to pay for the failed speculation of the banks?
    …just like why should we have to pay for the same thing here?

  9. zzyzzx


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    9   7:56am Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    kentm says

    * The average retirement age raised from 61 to 63, and early retirement restricted;

    That's weak. They should have raised it to 75. No wonder their austerity isn't working yet. It's way too limp wristed.

  10. PockyClipsNow


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    10   12:04pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike  

    I read in greece you can inherit a pension. But only for unmarried duaghters. So I suppose right after they passed that 'law' the marriage rate dropped in half. hah.

    I read about a small city in the US that was banrupt recently they also made it so children and grand children could INHERIT THE PENSIONS of city employees. Talk about cuba!!! we are half way there - rich people are all gov employees in cuba.

  11. bob2356


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    11   12:34pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Ruki says

    Ptipking222 says

    the country pays out way more in wages/pensions than it takes in taxes.

    You talking about Greece?.....or California or Illinois or New York state or the several hundred cities/towns in the US that are insolvent because of their pension liabilities, if not outright bankrupt because of them?

    Obey The Tripods

    Several hundred? You are off by an order of magnitude. Probably closer to 40-50% of states, counties, cities, towns, independent authoraties, etc. cannot meet their future pension/health care obligations no matter how much taxes are raised. What has happened so far is the tip of the iceburg, the next 10-15 years is going to be a very rocky ride.

  12. zzyzzx


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    12   12:44pm Mon 4 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  
  13. lisalisa


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    13   8:21am Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Hmmm... makes me wonder if Pensions and Social Security and welfare seem like a packaged government Ponzi scheme.

    Wait... we have that now... DOH! :^{

  14. Leopold B Scotch


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    14   8:28am Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    mikey says

    I don't want the dollar store to become the five dollar store.

    Don't hold your breath. It used to be called the Five-and-Dime.

    (The $ 0.05 and $ 0.10 store, if you will.)

  15. zzyzzx


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    15   9:00am Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    mikey says

    I don't want the dollar store to become the five dollar store.

    We already have them around here:

  16. Zakrajshek


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    16   9:06am Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike (1)  

    80 come on. There's some people (slave drivers) who never want to see others released from the yoke. They think that's why we were all born... to work... for them. Let this failed AIG dork work until he's a 100. There are many though, who don't know what to do with themselves without a job (someone telling them what to do)

    There is no reason the retirement age shouldn't be going lower. Due to increased productivity, one person working today produces 4 times what a worker in 1950 produced. Wall street and corporations have gamed the system so they get almost all of these gains.

    Thoreau wrote in the 1840s that he was able to produce all he needed for the year by working six weeks in his garden. The balance of his time, he said, was his. Save your money, live reasonably, and retire when you decide, not the government.

  17. zzyzzx


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    17   9:24am Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    Zakrajshek says

    Thoreau wrote in the 1840s that he was able to produce all he needed for the year by working six weeks in his garden. The balance of his time, he said, was his. Save your money, live reasonably, and retire when you decide, not the government.

    I agree. But to those too stupid to save, their retirement age should be 80. Remember when Social Security was first introduced the average lifespan was something like less than a year after you began to receive benefits.

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