What is that Greece-y Spot on the Mirror?

See Spot. Spot is a dog. Spot is a BIG dog. See Spot run. See Spot EAT. See Spot get re-named "Debt."

I have some good friends who once had a dog like this. It takes quite a commitment to support an animal of this size. They start out as cute little puppies, or in this case, maybe not-so-little, but still fun.

A little debt can be fun. We charge our credit cards when we're on vacation, and then pay them off. We get a home loan and enjoy living in the house while it (hopefully) grows in value. But what happens when you give your kids a credit card, and THEY are not the ones who have to pay the bill? There is no discipline to pay it off; they may even "accidentally" charge things for their friends.

This is the situation in Greece . . . and it's a dawg.

Greece's annual budget deficits are about 12% (over revenue). Their deficit expressed in relation to their GDP is almost 37%. Their total debt is 134% of GDP.

What does this mean? GDP is "Gross Domestic Product." That is ALL of the economic output of a country in a year . . . private consumption + gross investment + government spending + (exports-imports).

What's the difference between "deficits" and "debt?" The deficit is a country's annual shortfall between spending and "income" i.e. TAX revenue. The "debt" is the cumulative deficits from all previous years. The annual deficit is like a Chihuahua and cumulative debt is like a Great Dane. Imagine the Great Dane growing to the size of a horse . . . a Budweiser Clydesdale, and never stopping. How did Greece get into so much trouble?

Let's look at that AND look in the mirror. Are we ANYTHING like Greece?

- Greece's public employee unions get unsustainably generous pay and benefits, including a two month bonus for every year of pay. Also, Greece has more than five times as many civil servants per capita than even the United Kingdom.

- In the U.S., the average public employee salary is 45% more than private sector.

- In Greece, many people can retire at age 53. In the US we can retire at 62 and live to nearly 80.

- Greece's deficits are 12% annually . . . Our deficits are 12% annually

- Greece's TOTAL DEBT is 113 % of GDP. Our debt is 94% of GDP, and rapidly growing.

- Greece has nationalized health care . . . we're headed in that direction.

- Greece is having violent, deadly riots in the streets, organized by LABOR UNIONS.

-The U.S. is having violent riots in the streets, organized by unions, socialists, and communists who recruit protestors via the Internet: SEIU, AFL-CIO, Workers World Party, Socialist Party USA, The World Socialist Web Site, and the Revolutionary Communists Party USA.

At least our union-organized riots aren't deadly . . . yet.

The IMF has constructed a "bailout" for Greece. What is the IMF you ask? Is it like "WTF?!" Yes and No. It's the International Monetary Fund, and its function is to oversee the global financial system by watching over the economic policies of its member countries in order to stabilize exchange rates, and it offers highly leveraged loans mainly to poorer countries.

Here's the rub . . . the United States pays 17% of the IMF bailout for Greece.

The US pays about three times more than any other country in the IMF, although the bailout to Greece will include additional funds from other EU countries. As the late Billy Mays said, "But wait! There's More!"

There are several other countries on the same precipice as Greece. The acronym for them is P.I.G.S. Portugal, Ireland, Italy, Greece, Spain. . Did you ever see a greased pig catching contest in a rodeo?

- Portugal's deficit is 8.5% with total debt nearing 90% GDP.
- Ireland's deficit is 14.3% and unemployment is at 13.5%, with a shriveling GDP.
- Spain's deficit equals 10% of GDP. Unemployment is close to 20% and its GDP is shrinking.

So, we're on the hook NOT ONLY for 17% of the IMF bailout to Greece, but ALSO for any other country that might need an IMF funds "fix" . . . Portugal, Ireland, Spain and others. A . . . N . . . D . . . in spite of the recent bailout package for Greece, people are betting that Greece is going to default. You can tell by the rising price of their credit default swaps. "Default swaps" = insurance in case the borrower can't/won't pay. W . . . H . . . O . . . is INSURING the debt on Greece? A . . . I . . . G . . . ! Owned/backed by the American taxpayer.

NOW you can scream "Whiskey! Tango! Foxtrot!"

As NBC's news anchor Brian Williams said to David Letterman: “the dirty little secret is: the world has no money and the emperor has no clothes.”

In a startling development, the balance-challenged New York Times is starting to wake up and smell the coffee (even though they couldn't smell the T.E.A. if it was stuffed up their sinuses). Quote: "Greece . . . and . . . other European countries with huge debts . . . don’t get it. They have been enjoying more generous government benefits than they can afford. No mass rally and no bailout fund will change that. Only BENEFIT CUTS or tax increases can."

Perhaps that is one reason the IMF is telling Greece they should PRIVATIZE transportation, energy and HEALTH CARE.

Americans, take a look at the Greece-y spot in the mirror . . . is it on the glass, or on "US?" This is not a "slippery slope" it's a Greece-d one!

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*The names in this story have NOT been changed to protect the guilty. Any resemblance to actual events or real countries living or nearly dead is NOT purely coincidental. Any resemblance to clever writing IS purely accidental.

Photo from here.