Thursday, January 29, 2015

"Austerity" - It's Greek to Me!

Austerity in both the dictionary and in real world economics means cutting government spending so you run a surplus, usually in order to pay down or at least stem ballooning government debts.

However, "austerity" has a different meaning to communists, socialists, leftists, democrats and other varied sorts of the same Marxist political spectrum - "bloody murder."

Had you been paying attention to Greece (or even some of the lefter leaning parties in the western world) an orchestrated, purposeful, and intentional assault has been made on the word "austerity."  The left (as they like to do with many other words) has targeted the word "austerity" and now intend to redefine it and villainize it so a lemming-like population of sheeple will vote against it, no matter how necessary and required it is.  And so like "anti-biotics" or "emergency heart surgery" or "CPR," the left (at least in Greece) has managed to avoid taking it's much necessary medicine by making the word "austerity" a pejorative.

But was what Greece was going through really "austerity?"  Did the government "tighten it's belt," run surpluses, and give a much needed, reality based, come to Jesus meeting, rah-rah pep talk to its citizens about knuckling down, doing their share "so we can get through this and see the dawn of tomorrow?"


Like all leftists you are nearly guaranteed that what comes out of their mouths is 100% false.

First, the Greek government came nowhere close to running a surplus.  Deficits as a percentage of GDP are still laughably in double digits which, for normal countries, could indicate they were engaged in a war.

Second, leftists always looking for an excuse will muster their almightiest of mathematics and make the 4th grade level observation that it could have been REVENUES that were decreasing faster than spending.  Really?

Admittedly the chart is missing its past two years (thanks for being on top of that one OECD!), but let's not kid ourselves.  Greek deficits were NOT caused by a revenue problem, they were caused by a spending problem.

And finally, as the leftists are against the ropes, painted into a corner by reality and facts, we can reliably predict their next move because it's the same damn move they've always made before.  They're going to blame government spending on the always reliable, always evil "corporate tax breaks," "military spending," and "give aways for the rich."

However, unfortunately this is not America, and (as is always the case with leftists) it's not true.  The Greek budget (which is actually quite difficult to come by) shows what those of us who insist on being informed already know.  The majority of the spending binge went to darlings of leftist spending.

The budget is rather lengthy and detailed, but if you look at table 3.18 you'll notice three things.

1.  If you add up all the leftist/socialist/social programs, for 2014 they add up to 66 out of the 88 billion Euro budget.  This is roughly 75% of the budget.  Not "defense spending."  Not "money to rich people."  Leftist, socialist programs are the primary cause of the country's financial woes.

2.  There are some issues with the "general state expenditure," since it accounts for 37 billion Euro.  But since the states do not have defense, etc., I am assuming the majority of that money as well goes to leftist social programs.

3.  Government employees.  Even if you don't look at the functional purposes of each budgetary group, each group has a shockingly high percentage of their expenses going to "salaries and pension."  Indicating AGAIN a leftist, socialist preference to overpay government employees.

In the end, I am fully aware that none of these charts is going to convince a single leftist, let alone the professional activist parasite who's avoided a real job all his life (like our president) who is now the Prime Minister of Greece.  But that is not the point of this post.

It is to point out that these people are delusional.  They literally have a mental problem and that is the inability to live in the real world.  However, unlike other instances where there is a working class or a productive class to bail them out, thereby keeping the delusion up, Greece does not have that.  It is at the mercy of the EU.  And this will be one of the first (of what I predict to be several more) instances where socialists and leftists will be told "no" and for the first time in their lives face the economic reality that you can't have a society of "professional activists," "teachers," "professors," "government workers," and other parasites because in the end they produce absolutely nothing of real economic value.

And we, my friends, are going to have a front row seat to watch these communists explode with cognitive dissonance.


grey enlightenment said...

yeah, the left blames this illusory 'austerity' for Europe's chronic economic weakness, when the real culprit is entitlement spending and an economic environment that is hostile to capitalism. Everything is overpriced and small compared to the USA

Anonymous said...

"The Greek Ministry of Finance employed a total of 574 cleaning ladies. The lowest paid made 952 Euro per month for three hours' work daily. Others were paid 1060 Euro for four hours and 1455 Euro for five hours."

"Twelve of these (permanently employed) cleaning ladies made up to 2414 Euro - a dream salary not only for today's Greece but even for Germany. Before the crisis, the Finance Ministry occupied a total area of 392,426 square meters, therefore each cleaner was responsible, on average, for 526 square meters. Mergers and closure of services reduced this to 121,911 square meters."

"Because of these reductions, and since outsourcing the cleaning of various areas used by the Ministry to private services some years ago proved to be cheaper by up to 250%, hundreds of these permanently state-employed cleaners were laid off. They went to court, seeking annulment of their dismissal."

"To be fair to the previous government, we should mention that they were offered the option to form a company and be given the contract for cleaning the ministry. They refused. The court of first instance ruled in their favour. This was reasonable, because they had been hired on the basis of legislation, and the government had broken that law by firing them."

"The state, under the government of the previous Prime Minister, Antonis Samaras, appealed to the Supreme Court, seeking a reversal of judgement. We will probably never find out if it would have succeeded, because it's certain that the new government will not continue the appeal."

"The Syriza party (NB the leftist party voted into power last Sunday) announced during the election campaign that they will find funds so that the cleaners can be hired again - making pre-election capital on the fact that most of public opinion is unaware of the number of cleaners and the amounts they were paid, and the fact that since they were "humble" cleaners, this could be used to elicit the voters' sympathy."

"This smacks of the 1980's, except that now the country's coffers are empty, and the plutocrats' money, if it is ever found and taxed to the benefit of the state, which is very doubtful, should be spent elsewhere. It should certainly not be spent on the populism of a government that wants to throw money off balconies to gather the votes of the desperate."

"Unfortunately it seems that Greece has not learned from her misfortunes. Let's hope that the same doesn't happen to us here in Cyprus, because similar voices are beginning to be heard here too".

Translated and abridged from a Cypriot newspaper:

Anonymous said...

I have my popcorn ready for the show.

Anonymous said...

I found this post by some poor rich SJW getting fleeced $10000 to run in a charity marathon, and thought of you.

Maple Curtain said...

As they say, grab the popcorn and take a seat! Schadenfraude.

Anonymous said...

Here is the new prime minister of Greece in 1990 at age 17, giving a TV interview at a time when he was a member of the Greek Communist Youth involved in protests by high school pupils against, among other things, rules imposed by the Ministry of Education to control attendance. He considered that informing the parents that a pupil did not attend class is "suppression of the pupil's personality" and wanted "the right to decide for himself whether he wanted to absent himself from the lesson":

Q: "You are posing an issue of relationships between pupils and parents, and you want the Ministry of Education to solve this issue".

A: "No, we don't want the Ministry of Education to solve the issue. We simply want the Ministry not to suppress the pupils' personality".

Q: "So you don't want the parents to know if you are going to school or not".

A: "Not exactly. We want to have the right to decide for ourselves, if at some point in time we wish to absent ourselves from the lesson".

Q: "Is that not the same thing?..."

Rick Caird said...

The allure of more government spending will quickly give way to the reality there is no money to spend. The EU would be foolish to advance Greece any more. Greece will have to default and then try to live within their means. Then they will know austerity.

Robert What? said...

Oh come now. You are being too hard on the Greeks. They just want the God given right to go as far and fly as high as (other people's) talent and hard work will take them.

Pete Brewster said...

Some good will come of this. Greek girls will quickly become Aphrodite's gift to PUAs.

The welfare state's already on its last legs, with female "doctors" who got their MDs on their backs having to go back on the game to make ends meet.

Grexit will be the coup de grace. When all the remaining Greek men with a work ethic GTOW to slightly less fucked-up countries, it'll be only a matter of time before the place goes Muslim. In the meantime, though, there won't be nearly enough Russian mobsters for all of Greece's former feminists.

So for a few years, Greece is shaping up to be a great place for a man of means to enjoy the decline.

Red Knight said...

Don't be fooled by the socialist-sounding labels on the spending items in the budget. Corrupt governments are adept at hiding what they're doing behind accounting wizardry. The Greek government was so good at it that it managed to get the free market to award it a credit rating of A or better up until the day Papandreou publicly admitted that the books are cooked.

Reckless deficit spending is what every Greek government, left or right, has engaged in during the 30 or so years before the music stopped. By European standards, Greece isn't some idyllic welfare state, never has been, its social spending to GDP ratio, as well as its tax rate, have always been smaller than that of the Northern European countries that are held as the good, responsible parties in the whole crisis.

What this post rightly highlights though is that Greece is still running a significant budget deficit, something Greece wouldn't be able to do if it defaulted and there'd be no money to borrow. Thus, the usual complaint about how Germany & co are destroying the Greek economy through inverse Keynesianism by forcing it to cut government spending is utterly misplaced. What Germany & co are offering Greece is a chance at less austerity than it would have to if it went its own way.

No, the thing is simply, three decades of deficit spending has led to a massive market distortion, causing the Greek economy to orient itself to produce to meet demand which was unsustainable to begin with and which would evaporate the inevitable moment the plug was pulled. I frankly don't see much else of a long-term solution than let it crash as far down as it goes, and let it regrow on a more sustainable basis.

nate w said...

The only collateral Greeks have to offer is the future taxes levied on their unborn children. Never mind, they have already bartered that away too.

Only thing left to do is finger pointing, there is no fix.