Are you paying attention to the European debt crisis with the riots and protests?
I use the news about Greece, Italy, Spain, Portugal, Ireland, France and Germany as a teaching aid for our granddaughter. The historical events we are witnessing in Greece will undoubtedly affect us here. It’s important that she understand what’s happening there is the possible beginning of a global financial meltdown.
If a contagion of economic collapse comes as a result of Euro debt, many think the trigger could be with Greece. That’s the view of our current leaders, the International Monetary Fund, International Banks, the Federal Reserve and other nations’ leaders. Why else would they continue to compound the problem with another $170,000,000,000 “loan” (debt), forced forgiveness of another $100 billion debt owed to private bondholders (sucks to be them), and dictatorial demands to Greece in providing the additional Euros?
Should — or when —Greece actually default with real bankruptcy and be forced to balance their budget, what happens to the rest of Europe and USA? Does the Euro (their dollar) and our dollar tank? What happens to the other nations listed above? If those with enormous debt also collapse as a result, how quick will the contagion spread and a global meltdown of all debt-ridden nations hit?
With what I call political trickery, our federal legislators voted during the “August default showdown” to allow President Obama’s budget through 2012. Did you know that? What a joke right? Did you know that they okayed somewhere around $17 trillion-plus debt by the end of this year and they don’t need to do anything else to allow this spending? Our Gross Domestic Product (GDP) or everything we produce in one year is around $15 trillion.
Here’s the sad news that every single American citizen needs to hear: Our debt to GDP is well over 110 percent and rising. When did Greece’s problems start: After their debt to GDP exceeded 100 percent.
Here’s a simple prediction for those that are not following the European fiscal crisis, when the bailouts for Greece stop and the necessary collapse begins, one nation after another in Europe will also collapse.
What countries come out the winner?
Debt is bad. Crazy Debt is Crazy Bad! Banks should never loan money when they know it cannot be paid back (unless the collateral’s value exceeds the debt).
This is not the first time in history a nation outspent its ability to pay it back. History and time is not on our side. For our elected leaders to allow unlimited spending when they know full well there’s no way to pay it back without causing global bankruptcy, that’s shameful if not plain evil.
Here’s a valid question to our leaders: “What collateral is being used by the USA to get the loans we need for unbudgeted spending (U.S. Senate now more than 1,000 days without passing a budget), unfunded liabilities (Social Security, Medicare, Obamacare) and  the piles of money we loan or give to other nations — and who gets that collateral in the end?”