The Hellenization of America

Today in an unprecedented move the European Union has decided to put up a staggering 1 trillion dollars to rescue it from an imminent economic collapse. This is the largest amount issued in the history of the European Union since its formation in 1999. Read this article for greater context. AP European Loan

Hidden from all of this is Greece, a small, has been country of 11 million people, the catalyst to all of this chaos.  This country which is smaller than the Los Angeles metropolitan area is the main reason why the European Union issued this unprecedented relief fund in the first place.

More importantly why should we care about what happens to Greece?
Here are some reasons why we should care:

• The current global market runs on an interdependent model which means that all the markets of the world are linked in some way.  So for example if one economic market is faltering than other markets will falter also and vice versa.
• The European Union Bail out is is similar to our bailouts which involved massive borrowing to pay for our debts.  This is like a huge band aid, it works to stop the bleeding, but ultimately is does not address the causes of the bleeding in the first place
• This bailout does not address the root causes such as:  Unsustainable, Union retirement pensions, the cost of socialized, public option health care, the lack of economic privatization, and staggering unemployment rates.  The latter is a direct result of the lack of economic privatization.
• The problem with the bailout mentality is that it wreaks havoc on global and domestic currencies in the long term. In the short term you will see stocks possibly soaring, but this is only temporary, when the dust settles the debt will take many years to pay off, the root causes still not addressed. For example look at what has happened to our dollar as a result of this massive borrowing, it's value has decreased dramatically over the past 5 years
• This bail out trend is unsustainable.  What if Greece defaults?  What happens then?  One can only imagine the catastrophic consequences of Spain, Portugal and other countries following Greece's lead. These type of events would lead to a worldwide depression, possibly worse than the "Great Depression"
• On a domestic note what happens to states like California? Will our country bail them out if it's economy defaults?  For more context on this issue read this article: America has good reason to worry
• The strength of our country's economy will be severely lessened the more we incur debt.  History has proven this point time and time again.  Look at what happened to Japan.  For most of the 1980's they had the second largest economy,often times rivaling ours; but after the collapse of the Asian markets in 98' they have never recovered. Why? because their administration borrowed in unsustainable ways, damaging their currency, damaging their economic growth.  We are heading towards this same path.

The great danger is believing that this current, global crisis is not our problem, but the European Union's or Greece's. So what can we do on a personal level? We must vigorously, and as soon as possible become debt free in our own lives. If that means getting rid of that high interest credit card then do it. If it means not getting that brand new car and having to settle on a clunker then do it.  If it means not buying that home even when there is a first time home buyer credit then don't buy it, rent instead.  We must become humble, realistic, living within our means. Because the sad reality is that there is no such thing as a gift from the government.  It all comes one way or the other from our taxes. Ultimately the more we borrow the more we lose our freedom, the more we lose our freedom, the more we become enslaved to the powers that may be.