Conspiracy Theorist: 7/28

The problem in Greece:

Socialists ran out of other people’s money

By Mark Luedtke

Apologies to Margaret Thatcher for the title.

One of the ironclad laws of economics is if something is unsustainable, it will end. Socialism, a system of theft and violence against the people, is unsustainable, and it’s ending in Greece—as it will end here and everywhere else, with impoverished people throwing Molotov cocktails at a phalanx of government enforcers protecting ultra-rich rulers in parliament. Once again, Greece is leading the so-called civilized world, showing us that as socialism dies, rulers drop the pretense of working on behalf of the people. Without the pretense, we see how ugly socialism really is.

You might have heard Greece and the Eurozone were saved by a last-minute deal. This isn’t true. This deal, if it survives, is only good for the rulers and only temporarily, making the real problems worse. The punitive sales tax hike from 13 to 23 percent targets Greece’s only remaining industry: the tourist industry.

One common claim about this deal is that it bails out the bankers at the expense of the Greek people. David Stockman explains this isn’t true either. “[Since 2009,] the French, German, Dutch and Italian banks and other private lenders, for example, outstandings have been cut from $100 billion in 2009 to barely $15 billion today,” he writes. “Moreover, as The New York Times noted with respect to this massive shift, the most aggressive punters have made a killing. One of them noted quite explicitly that when hedge funds started buying Greek government bonds in 2012:

“‘People made their careers on that trade,’ Mr. Linatsas said.”

Indeed they did.

And now taxpayers around the planet have been stuck with the due bill. Specifically, $250 billion or nearly 80 percent of Greece’s $320 billion of fiscal debt is directly owed to the [European Union] facilities and the [International Monetary Fund]; and upwards of half of the balance is indirectly owed to European taxpayers because $45 billion of Greece’s T-bills and bonds are either owned or funded by the [European Central Bank].”

The bankers already made a killing off Greek debt then offloaded the inevitable losses to taxpayers. Of course, this put governments on the hook. Stockman explains the consequences. “…What the clueless [German Chancellor] Angela Merkel actually accomplished during five years of weekend Gong Shows was to bury her taxpayers under $92 billion of liabilities—nearly all of which are off-budget and unacknowledged,” he continued. “Her desperate and mindless temporizing in order to remain in power thus constitutes a monumental political lie and betrayal. Were this to be exposed by a major write-down of the Greek debt, it would lead to an instant fall of her government.”

But the problem is much bigger. If Europe’s rulers allowed Greece to write down its debt, the rest of the PIIGS—Portugal, Italy, Ireland, Germany and Spain—would demand the same, and their debts are much larger than Greece’s. Europe’s rulers legitimately fear the guillotine, thus the punitive response.

Europe’s rulers have painted themselves into a corner. They’ve guaranteed the Eurozone will disintegrate, and governments along with it. The only question is when. This Greece deal buys them more time to loot taxpayers further, before they’re forced to flee.

You may also have heard that since Greeks resoundingly rejected the original deal at the polls, Greek Prime Minister Tsipras could negotiate a better deal. Europe’s rulers wouldn’t allow that. They threatened to topple Tsipras’s government, and rumors said he might be assassinated. He must have taken the threats seriously because he quickly caved, betraying voters after winning the referendum.

The problem for the Greeks is that they ran out of other people’s money, and they blame cruel Germans instead of themselves. While European and Greek rulers shoulder much blame, so do the anti-capitalist Greek people. Their excesses are legion, including getting paid for 14 months every year.

The collapse of socialism is not confined to Europe. Puerto Rico’s governor wants the territory to declare bankruptcy. Reuters reports, “The Caribbean island is struggling to relieve a $73 billion debt burden. It came to a crunch point on Monday—ironically at the same time as did debt-laden Greece—after a dire report on its stability by former International Monetary Fund economists was released ahead of key deadlines on Wednesday to repay debt.”

Meanwhile, China’s centrally planned stock market bubble burst and lost 40 percent of its paper value, but the rigged U.S. markets remain unfazed. When centrally planned U.S. markets crash, it will be the biggest crash of all.

Mark Luedtke is an electrical engineer with a degree from the University of Cincinnati and currently works for a Dayton attorney. He can be reached at MarkLuedtke@DaytonCityPaper.com.

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Mark Luedtke
Reach DCP freelance writer Mark Luedtke at MarkLuedtke@DaytonCityPaper.com.

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