Greece Economic Crisis: Why US Faces Big Fat Greek Bankruptcy

Wayne Allyn Root, the 2008 Libertarian Party Vice Presidential nominee and frequent contributor to the Gambling911.com website, chimes in on the economic crisis in Greece and why he thinks America is next.  His views do not necessarily reflect those of Gambling911.com or its Management.

Root discusses:

*Why America Faces a Big Fat Greek Bankruptcy.

*Why We're All Greeks Now.

*Forget Global Warming- Catastrophic Government Spending Is the True Threat to Our Survival.

Have you read the news lately? Greece is bankrupt. The entire country was poised to default on its debt, when the European Union (led by Germany) and the IMF (led by the USA) decided to bail them out...or risk the collapse of the entire EU and their currency, the euro. As always happens any time government is involved, the dollar figure necessary to save Greece keeps rising...first it was $50 billion...then $100 billion...now  $145 billion, the biggest loan to a country ever.

But here's the clincher- this gigantic loan will last only one year. The IMF (International Monetary Fund) assumes in one year, when Greece needs more money to stem the flow of red ink, they'll be financially stable enough to attract loans on the open market, with no more government help. But what if the IMF is wrong? Then we'll see one big fat Greek meltdown- taking all $145 billion down the tubes (much of it from U.S. taxpayers). That's assuming that Greece is telling the truth about their debt in the first place. But just like the U.S. government, Greece has lied to themselves, and their citizens for years. And just like AIG, GM, Fannie Mae, Freddie Mac, and the failing public school system in America- the money we give Greece will never be enough. It's a bottomless pit.

But Greece is the EU's smallest problem. The other PIGS (Portugal, Italy, Ireland and Spain) are in far deeper trouble than Greece. Unfortunately the EU and IMF just used up most (if not all) of their bullets on Greece. There isn't enough money in the world to bail out the rest of Europe. We are staring at economic Armageddon.

So what caused this? Very simply, big government and government employee unions. Greece's problem is Europe's problem...and following closely behind, America's problem too. We're all Greeks now. Quite simply, Greece's problem starts and ends with government employee unions. There are too many government employees (1 in 3 Greek citizens works for government); their salaries are way too high; their bonuses can only be described as insane (2 months for each public employee); their pensions are ridiculous (retirement far too young and free healthcare for life); and their government jobs are guaranteed for life.

Sounds crazy, right? Sounds like in Greece the inmates must be running the asylum. Except America has the exact same problem. California, New York, New Jersey and Illinois are our very own homegrown version of Greece. These states are bankrupt, insolvent, and desperately need a bailout. Why? For the same reasons as Greece. Far too many government employees; bloated salaries for civil servants; bonuses and raises are contractually obligated even during an economic crisis; sky high pensions; and jobs guaranteed for life. The only difference is that we are a nation of 300 million, so the debt is far bigger than Greece. It turns out that we are Greece squared.

The solution to save America from economic Armageddon? Simple. Use the same "austerity measures" imposed upon Greece, in return for this $145 billion loan, to dramatically cut spending on government employees:

*Freeze government hiring for the next 3 years.

*Eliminate bonuses and raises for the foreseeable future.

*Institute layoffs and across the board wage cuts. Why should government employees enjoy "privileged status" that no employee in the private sector enjoys?

*Change pensions from ‘defined benefit' to ‘defined contribution' pension plans, meaning retirees receive only what has been built up in their 401K type retirement accounts.

*Raise the retirement age. In Greece it is going from age 53 to 67. Gold-plated pension plans are the single biggest factor that bankrupted Greece. The same problem bankrupted U.S. automakers GM and Chrysler.

*Require government employees to pay more of their healthcare (through co-pays and deductibles).

*Change the way pensions are calculated by eliminating overtime and raises in the last years of employment to "game the system". 

The real global threat to our existence isn't global warming- it's catastrophic government spending and, more specifically, spending on government employees. Our government's unfunded liabilities are now estimated at $60 to $75 trillion over the coming decades. To give you some perspective, the New York Post recently reported that one New York firefighter is retiring on a pension of $240,000 per year. If he lives 40 years beyond retirement, that will cost the taxpayers almost $10,000,000. That's for one single government employee. There are millions upon millions of them on the federal, state and local level. Can you say "fiscal disaster?"

Government employees should be cheering these solutions. The plan above might actually save their jobs and pensions. But keeping the status quo of unsustainable spending will sink this country- in which case government employees will lose their jobs and pensions. Anything that saves our economy, will be healthier for them (as well as the rest of us) in the long run.

It turns out that the Greek model is the American model. It turns out that we need saving too. We're all Greeks now. We either stop the insanity, or we wind up with our own big fat Greek bankruptcy.

Visit Wayne Allyn Root's website at RootForAmerica.com