Greece finally confronts reality
No doubt many Greeks are upset with their prime minister, after he agreed to tax increases and entitlement cuts needed to keep the country’s economy from going belly-up. At least part of their anger would more appropriately be directed inward. Many of Greece’s economic maladies were self-inflicted.
We Americans should not be too self-congratulatory over the fact our economy is in much better shape than Greece’s, however. There, in a matter of not so many years, may go we. And if that happens, we, too, can look first in the mirror in our search for culprits.
Greek leader Alexis Tsipras agreed to changes demanded by his country’s many creditors, including both other governments and financial institutions. Tsipras had for months vowed to defy the creditors, but continuing to do so could prompt them to cut off future credit, leaving the Greek economy in chaos.
High unemployment, topping 25 percent, is part of Greece’s dilemma. Much of it is from a culture in which government spent far beyond its means on social programs such as pensions, and mandated many in the private sector do the same. Now, Tsipras must tell his constituents they have to cut back on entitlements such as pensions and raise taxes to get their financial house back in order.
Greeks have known for years they were spending too much, but they resisted calls for austerity.
Sound familiar? Americans are in the same boat, though ours has not begun sinking – yet.
But unless changes are made – and that means entitlement reform, less government spending and fewer expensive mandates on the private sector – it is only a matter of time before we, too, begin feeling water around our ankles.