Greece Heads for Default, Despite Media Predictions It Wouldn’t
Greece is the perfect example of the eventual outcome of unchecked spending – especially as it creeps closer and closer to defaulting on its massive debts, despite multiple government bailouts in May 2011. One recent BBC News headline warned: “Greece: ‘Default within the euro is possible’.”
But, looking back, some journalists predicted the opposite: that the Greek economy would survive because of government bailouts. Huge fan of government-deficit spending, Paul Krugman, has been writing about Greece a lot, arguing that its trouble is proof that austerity doesn’t work.
CNBC’s Jim Cramer was confident Greece’s desperate situation would be “resolved one way or another” as recently as March 7, 2012. He said on “Today” “I feel Greece will be resolved one way or another. It’s going to look bad in the headlines, but it will be, in the end, a neutral. It will not help us or hurt us here.”
CNN supplied a video called “Why Greece won’t default” on June 21, 2011 that featured Fortune’s Katie Benner saying “No.” Benner said that the lesson learned from Lehman Brothers was that the government will step in if “they think it is absolutely necessary.” She also wrote a piece for CNN Money in which she said “the rational market is no match for a group of determined government mandarins who will prop things up once they realize how high the stakes are.”
Numerous economic analysts predicted that the Greek economy would inevitably default – and there were journalists agreed with them. But the journalists, like Cramer, who remained convinced that Greece would not go into default echoed the reassurances of Greek politicians, European politicians, and IMF officials, who swore “we won’t let Greece fall” and that the Greek economy would not default “if the Greeks do what they have to do.” Jamie Dimon, the embattled CEO of JP Morgan Chase, also argued that Greece would not default.
This vote of confidence was echoed by Obama’s endorsement of that bailout. An official Feb. 21, 2011 White House statement declared that he “welcomed last night's agreement in Europe on a new rescue program for Greece to help reduce its debt to sustainable levels.”
The looming failure of the Greek bailouts merely proves that unchecked government spending for years eventually becomes unsustainable – despite current media claims that the recent European elections are further proof that slashing spending is the wrong approach..
The liberal news media is often wrong when it comes to financial matters. Looking to Greece, it appears some of them may be wrong again.
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Comments
Despite Media Predictions?
Submitted by Bourbeau on Fri, 05/18/2012 - 2:42pm.
Who in their right mind think anyone in the media has any understanding
of the unmitigated disaster brewing in Europe and is able to make a prediction,
one way or the other? That's insanely laughable. The media, all aspects of it,
have proven time and time again, they are cheerleaders for causes they believe
in, and doomsayers for the opposite. As far as being able to 'predict' anything,
you'd be better off talking to your dog; and listening for it's advice.
Greece already partially defaulted
Submitted by c5then on Fri, 05/18/2012 - 2:49pm.
That was the result of the last bailout deal about a month or so ago. They will further default again. And again.
By the end of the summer (maybe sooner) they will exit the EU, and re-issue the Drachma. Inflation will jump over-night in Greece to double-digit levels. That is why they are having bank runs right now. People want to get their savings in Euros instead of waiting for the Drachma.
Don't look for too many reports about this. It's all supposed to be hush hush in the liberal media.
Madison and Jefferson and Franklin built a Republic - Roberts killed it!
bottom line
Submitted by caveman1313 on Fri, 05/18/2012 - 3:15pm.
bottom line is that greece has borrowed more money than it can ever pay back.
bankruptcy/default is needed and inevitable.
What's Krugman proposing?
Submitted by KornKing on Fri, 05/18/2012 - 3:42pm.
100% tax rate maybe? No cavalry on the way, Paul.
In the battle of 'growth' (LOL) vs. austerity the economic
Submitted by Paarl on Fri, 05/18/2012 - 9:00pm.
reporters and journalists NEVER explain what is meant by either term......Growth is merely the borrowing or creation (by the ECB or IMF etc...) of 'money'/'funds' by electronic credit to the treasury of the particular country and those 'funds' are spent on infrastructure etc.....so in the end growth is merely more borrowing and spending or more money printing and spending......
Austerity in the European context is really just the same but at maybe 5% lower expenditure levels.,,,
Austerity COULD work IF the particular country was willing to institute some supply side policies...in the yrs 2009 to 2011 Latvia did just that and now their economy is growing at 5/6% real growth...
But the Euro socialist are caught in the fiscal equivalent of a monetary liquidity trap...so much of their economies are government run and government owned that there is not enough private sector left
to fund what the government bureaucrats want funded by taxes so they continue in this downward spiral....it wont end until government is much smaller and the private sector larger and profitable and able to provide taxes from profits and taxes from salaries that can fund the priorities of a smaller government.
I tell you...John Maynard Keynes has turned the minds of leftist economists into silly putty....he was SSSOOOO wrong about deficit spending etc....and yet so elequent in his writing that he fooled so many people for so long
Paarl of Rhodesia..
in rhodesia a dollar was a dollar..backed by gold and solid economic policies...
I'd say "God save Rhodesia",
Submitted by RR GOP on Fri, 05/18/2012 - 10:59pm.
I'd say "God save Rhodesia", but that's obviously not a possibility.
What happened to Rhodesia and the Republic of South Africa were travesties committed by the Liberals, the Communists, the U.N., and the politically correct elitists in the U.S. and Great Britain.
After being on the LSM's radar continuously for decades, they now act as if Zimbabwe and South Africa don't even exist (unless Oprah goes there). I didn't like Apartheid (though I do see the need for having had it, especially with Communist terrorist groups bringing violence to both countries), but I also find it disingenuous that the U.S. and Great Britain had no problem with it for the better part of a century and suddenly felt they had to interfere when the political climate was right.
Interesting that with all that rich farmland that the whites supposedly had exclusive control over in Rhodesia, and all of the diamond and mineral mines in South Africa owned by whites that the black people in both countries live in worse squalor than ever. Obviously, the U.S., Britain, and other players were certain to make sure that the valuable resources of South Africa weren't going to be nationalized and/or run dry. Yeah, they were really and truly looking out for the downtrodden.
"Under Capitalism, man exploits man. Under Communism it's just the opposite."
"All that Communism needs to make it successful is for someone to feed and clothe it."
Greece is fine. Spain's
Submitted by RR GOP on Fri, 05/18/2012 - 10:44pm.
Greece is fine.
Spain's OK.
Egypt's not being run by their military nor in any danger of being run by Al-Qaeda---same goes for Libya.
The U.S. economy's recovering.
The stock market is doing great overall this year.
People over here aren't rioting in the streets...well, not like the '60s anyway, so all is well.
The Paks are really our friends.
Unemployment's down.
We have always been at war with Eastasia.
"Under Capitalism, man exploits man. Under Communism it's just the opposite."
"All that Communism needs to make it successful is for someone to feed and clothe it."
Reuters has a piece out today on the G8 at Camp David
Submitted by bkeyser on Sat, 05/19/2012 - 11:24am.
From the piece:
Wow, the courage it must take for Obama to A) align with a Socialist, and B) recognize how the candy-assed citizens of Greece, France, and Spain are livid with Germany for not paying for their -well- everything.
Guarantee that Obama's main agenda for a second term is to make gun ownership unlawful. He can't run for a third term with and armed electorate.