November 9, 2012
NITA GHEI: An End To European Bailouts.
The desire to keep on spending in the face of economic crisis is universal. In Greece, parliament voted Wednesday to implement $17 billion in spending cuts, and the reaction was swift and violent. Public-service employees and others affected by the proposal erupted in riots on the streets of Athens.
The move to trim the indebted nation’s outlays cleared the way for the European Commission, the European Central Bank (ECB) and the International Monetary Fund to send a check for $40 billion. This bailout cash will give Greece some breathing space and enable government employees to cash their paychecks. It also leaves unresolved the cause of Greece’s vast debt, currently estimated at 175 percent of gross domestic product. That’s particularly troubling because it appears there will be no country left in the European Union (EU) able to bail out Greece — or any other ailing nation — the next time bills come due.
Sooner or later, you run out of other people’s money. Something that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be.