No, I am not referring to danger in your kitchen and I am not writing about the flaming Byzantine naval weapon. Rather, the issue is the second major crisis faced by the European Union. (The first major crisis faced by the EU was their decision to not react to echos of Nazi Germany in the
Balkinization of Yugoslavia. [Yes, the pun was intended.])
Greece is on the verge of economic collapse. Who cares? How does that effect me?
Here is why you should care.
The 1957 Treaty of Rome started the process of bring the nations of Europe into a federal republic similar to the several states within the federal republic of the United States. After World War II there was a strong belief that if there was one world government there would be no more
Pursuant to this treaty, in 1999, most of the nations of Europe set an exchange rate for their national currencies with the new pan-European currency, the Euro Dollar. In 2002, these nations retired their currencies for the Euro.
Now Greece is in the process of economic collapse. Why? The simple truth is that there are just too many Greeks who insist on receiving government largess and too few Greeks working to support them. The result is that the government of Greece has spent much more money on
benefits than it received in taxes. (Sound familiar?) Within the past year, average people who are investing for retirement decided that investing in Greek securities was just too risky.
Suddenly Greece couldn't pay its bills.
Today there are riots in Germany matching the riots in Greece. The Greeks are rioting because the government can't keep making its Social Security payments or continue to pay for the health care of its citizens. The Germans are rioting because they do not want to pay for the "bail out" of Greece. The sentiment in Germany is felt by tax payers all over Europe.
The Greeks blew it. They have spent more than they had for a little too long. Others are not far behind. Now the entire common currency is collapsing and all of Europe is being dragged down with the Greeks.
One of the problems with the European Union is that a dozen or so independent nations are sharing a common currency. Each nation has its own government and its own economic and tax policies. The EU is Rather like the first American Constitution in which the 13 colonies became
a confederate republic. Our first constitution only lasted for seven years until "[w]e the people, in order to form a more perfect union, do hereby establish and ordain this new constitution . . . ."
Again, who cares?
American taxpayers should!
If the EU fails to take over the debts of Greece, it is likely that the International Monetary Fund (IMF) will provide the money. Greece is "too big to fail."
If the IMF will take the hit, why should the relatively solvent nations of Europe take the hit. If they are sure that the IMF will step in, they would be stupid to save Greece themselves.
Who is the IMF? Well, the USA is the largest member at a whopping seventeen percent. That means just under one dollar in five spent by the IMF comes from American tax payers. Why would the Europeans agree to suffer for their own bad judgment when nearly one-fifth of their problem can be passed on to us? (Just under 10 percent would also be passed onto Japan.)
The Great Depression was not an American phenomenon, but a global phenomena. Yes, a myopic and undisciplined American government contributed to it. However, the entire industrialized world suffered through it until well after the Second World War.
It is said that those who are ignorant of history are doomed to repeat it. How ironic that the Greeks invented democratic and republican forms of government, then lost their empire after they discovered that they could vote to give themselves money from the national treasury. Now it seems that the same thing is happening again; we are poised to repeat history.
However, history also offers an equal number of examples of recovery from catastrophe. It typically starts with the reformation of individual morality and character. It builds into solid and stabile families. It grows into cohesive, moral and industrious communities, and culminates in
grand national ideals. Let us hope that this is just a dip in our time line and the lessons of history are learned before it is too late.