Austerity.One of those words you probably had to look up in the dictionary until recently.The Greek financial crisis has made it a household word lately.In short,it means that once a countries debt to GDP ratio exceeds a certain limit,their bond rating is cut forcing them to adopt strict measures of higher taxes,reduced spending,and diminished entitlements for its citizens.
It also means that the citizens pay the price for irresponsible government spending since that is what gets a country into this position to begin with.Usually,it leads to violence such as is occurring in Greece today.The main reason is because government employees and unions are forced to accept reduced pay,pension and health care benefits to help balance the budget.You then get the resulting strikes and protests leading to things like burning banks.
It's coming to your neighborhood.Write it down.Guaranteed.Checks in the mail.You can't stop it.The reason you can't stop it is that you can't stop your government from continuing their irresponsible spending policies.Drunk with power,they simply cannot stop themselves from spending our taxpayer dollars to save us from ourselves.
What can we expect to see and when?You can relax somewhat as it won't happen this year as an election is upcoming in November.However,December 1st is the deadline date for the Obama commission set up to find ways to reduce the debt.This is the out for Obama.The recommendations will come from the commission and poor Obama will merely be acting on their suggestions.Here are a few things you'll see.
•Extend the retirement age for social security benefits.
•Cut Medicaid and Medicare services and reimbursements.
•Institute a valued added tax (VAT) - a national tax applied to every economic transaction in the country.
•Require all wage earners to deposit a minimum of 2% of their pay into mandatory savings accounts.
•Require a percentage of the funds in IRA's, 401K and new mandatory savings accounts to be held in US Treasuries. (As the smart money bails on US Treasury auctions, Americans will be forced to buy their own toxic debt.)
The key point is this.Spending cuts will be borne by the poor because they are the segment of society receiving the bulk of benefits.There will be a huge public backlash as we are now seeing in California.The same thing happens when tax cuts are announced.They are always promoted as tax cuts for the rich.Reason being is that these are the people who pay the bulk of the taxes so of course they benefit the most from any tax cuts.
Greece is a walk in the park.We would only need to shut down the federal government for a portion of one day to reduce spending enough to cover the Greek debt.If you'll remember,we already did that over the winter when a snowstorm forced D.C. to halt.We like to deal in debt in the trillions rather than those pesky billions.
It's too late.The train has left the station.Our debt is too great.Our spending is insatiable.The census bureau predicts we will add another 100 million citizens by the year 2050.Amnesty is on the table today to add millions of illegal immigrants.Does anyone think that the number won't explode from the reported 12 million once the illegals get wind of amnesty passage?
You can just plod along with your head in the sand if you think this will never happen here.Not in the greatest country in the world,right?If you aren't ignorant to what's coming and have the means,please take the time now to make preparations.Once the violence starts,martial law will be sure to be enacted at some point.Then your options will be eliminated.You'll also have to watch your back every minute as your neighbors who are worse off than you will be faced with desperation.No one is safe in that scenario.More to come...