The Greek financial situation--why should we care?

I've been ignoring the Greek financial crisis. After all, it's Greece and it's financial. Who cares? My eyes glaze over. Then I read an article by Larry Kudlow, a financial expert, who always writes clearly and connects the financial world with my world. I edited some of the article to keep it short. So, here it is. Notice the second half where he connects the Greek problem to ours here in the United States. We need to learn from this mess.

"The ink was barely dry on the $150 billion European Union/International Monetary Fund bailout of Greece, when world stock markets tanked. Financial analysts are concerned that the bailout money won't be enough to cover Greece's borrowing needs from its out-of-control budget deficit.
Additionally, there are new worries that the Greek debt contagion will spread to Spain and elsewhere in Europe. The looming specter of debt default and deflation is heavy in the air for investors worldwide . . .

Margaret Thatcher used her budget ax [to get out of Britain's similar situation years ago]. That's something neither Greece nor Spain appears capable of implementing in a sustained way. Thatcher also reminded us that the problem with socialist governments is that they finally run out of other people's cash.

What's more, while Greece and Spain have moderate 30 percent business tax rates, lower than rates in the U.S., their combined personal and VAT tax rates come to about 60 percent. Team Obama take note: These are anti-growth tax policies.

Indeed, the debt follies of Europe and the bankruptcy of the European entitlement state should be a lesson for Barack Obama's Washington, where overspending and borrowing have reached absurdly grand heights. As a share of gross domestic product, U.S. debt is projected to move toward 100 percent in the wake of the new Obamacare entitlements. That's near the 125 percent debt ratio of Greece.

And just like Greece, U.S. government union-worker benefits, which run 50 percent above private-sector equivalents, are bankrupting federal, state and local budgets. They're also spawning a massive voter revolt against big-government debt that will bear fruit this November in the tea-party midterm elections . . .

Call it a spend-and-borrow debt mess. A pox on all your houses, at least until financial-market and voter discipline force the dimwitted politicians to radically change course."


Let's hope we can learn from this, make difficult choices, vote in people who share our concerns, and follow through by sticking with a plan to restore our finances. Our children will thank us for it.