Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
In case you want to know what the EU and Greek leaders really mean, here are translations:
Greek Parliament Passes Austerity Plan After Riots Rage
ATHENS — After violent protests left dozens of buildings aflame in Athens, the Greek Parliament voted early on Monday to approve a package of harsh austerity measures demanded by the country’s foreign lenders in exchange for new loans to keep Greece from defaulting on its debt.
Though it came after days of intense debate and the resignation of several ministers in protest, in the end the vote on the austerity measures was not close: 199 in favor and 74 opposed, with 27 abstentions or blank ballots. The Parliament also gave the government the authority to sign a new loan agreement with the foreign lenders and approve a broader arrangement to reduce the amount Greece must repay to its bondholders.
The new austerity measures include, among others, a 22 percent cut in the benchmark minimum wage and 150,000 government layoffs by 2015 — a bitter prospect in a country ravaged by five years of recession and with unemployment at 21 percent and rising.
TRANSLATION: Greece’s leaders sold out their own citizens, and doomed them to abject poverty, just to protect banks, foreign lenders and other members of the 1%.
But the chaos on the streets of Athens, where more than 80,000 people turned out to protest on Sunday, and in other cities across Greece reflected a growing dread — certainly among Greeks, but also among economists and perhaps even European officials — that the sharp belt-tightening and the bailout money it brings will still not be enough to keep the country from going over a precipice.
TRANSLATION: Greece is monetarily non-sovereign. So renegotiating loans and cutting deficits will do zero, zip, zilch to prevent bankruptcy. It only will make people suffer until Greece’s leaders finally admit that returning to the Monetary Sovereignty of the drachma is the only sensible course. But who cares?
Angry protesters in the capital threw rocks at the police, who fired back with tear gas. After nightfall, demonstrators threw Molotov cocktails, setting fire to more than 40 buildings, including a historic theater in downtown Athens, the worst damage in the city since May 2010, when three people were killed when protesters firebombed a bank. There were clashes in Salonika in the north, Patra in the west, Volos in central Greece, and on the islands of Crete and Corfu.
TRANSLATION: You always can rely on the police and military to hammer their friends and neighbors. Soon the police will fire bullets, but don’t worry. No one will be prosecuted. And as the intro at the top of this post says, “Austerity = poverty and leads to civil disorder.” Anyway, why are those people so angry at having their lives ruined?
Greece’s limping economy yields large trade and budget deficits, and none but the European Central Bank, the European Commission and the International Monetary Fund — known collectively as the troika — are willing to lend the nation the money it needs to stay afloat.
TRANSLATION: Greece is hopelessly in debt, so lending them more money would be stupid, non-productive and damaging. That’s why lending is being considered.
The troika is demanding more concessions to placate Germany and other northern European countries, where the bailout of Greece is a hard sell to voters.
TRANSLATION: Greece is down and just about out, so now is the time to kick them. Germany hasn’t changed much from WWII.
In the debate on Sunday night before the vote, Mr. Papademos appealed to lawmakers to do their “patriotic duty” and pass the measures, saying they would be saving Greece from bankruptcy in March, when a bond issue comes due that Greece cannot repay without foreign help.
Mr. Papademos acknowledged on Sunday that the program “calls for sacrifices from a broad range of citizens who have already made sacrifices.” But the alternative, he said, “a disastrous default,” would be worse.
TRANSLATION: “”Patriotic duty” = saving the banks from loss. Bank losses would be “disastrous,” while citizen losses are “patriotic.”
When they meet again on Wednesday, they are expected to sign off on the measures and raise the stakes. A major topic of discussion is expected to be establishing an escrow account that would hold new money lent to Greece, and using it first to pay creditors, before the Greek government can tap it for any other purpose.
The idea, backed by Germany and the Netherlands, may make further loans to Greece more palatable to German voters, but many Greeks see it as a fundamental loss of sovereignty and feel that they are being pushed into poverty to appease banks.
TRANSLATION: See above translations.
Anti-German sentiment is also on the rise in Greece, where memories of the Nazi occupation during World War II are still vivid. “This is worse than the ’40s,” said Stella Papafagou, 82. “This time the government is following the Germans’ orders. I would prefer to die with dignity than with my head bent down.”
TRANSLATION: Where Hitler failed, Merkel will succeed. Papademos is the Greek version of Neville Chamberlain.
If Greece dug itself into a hole by borrowing beyond its means, as many argue, there is also a growing sense that the troika’s austerity regimen of spending cuts and tax increases is burying Greece alive in that hole. “The reason Greece is in this position is because of the strategy the troika imposed upon it,” said Mr. Tilford, of the Center for European Reform.
TRANSLATION: Well, duhhh. Raised taxes and reduced spending (aka “austerity”) always screws an economy. Too bad our own Tea/Republicans don’t understand that.
“They’ve all sold out in there, they should be punished,” said Makis Barbarossos, 37, an insurance salesman, as he waved a cigarette toward Parliament on Sunday. “We should put them in small, unheated apartments with 300-euro pensions and see, can they live like that? Can they live how they’re asking us to live?”
TRANSLATION: That punishment would be far too mild for the incredible horrors the Greek and EU leaders continue to visit on the Greek people. Sadly, the poor will continue to suffer; the rich will continue to prosper; and nothing good will be allowed to happen.
The solution: See: What would happen if Greece were to return to the drachma? Meanwhile, I award the people of Greece one guillotine, to use as you feel appropriate.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports