Posted by Warren Beatty on 27 June, 2011 at 10:25 am. 19 comments already!

Today I was reading an article by Jack Dunphy about Los Angeles, California, policemen and fire fighters.1 The article was written with a very pro-union slant by a current member of the LAPPL. While I am not a union sympathizer, the article was quite thought provoking, particularly about the future of this country. So, having nothing better to do, I did some research about this country’s politics and policies, and what is currently happening in Europe. What I found may surprise you, may make you angry, and (hopefully) forewarn you.

Politics – Obama’s policies, an economic disaster

There is no doubt that the current economic situation belongs to Obama and the Democrats.2,3,4 Both President Obama and DNC chair Debbie Wasserman Schultz claim it. So any consequences that follow from their decisions ipso facto also belong to them.

As Skookum said in his post, 5 “Reveling in the arrogance of his victory and the inexperience of a Leftist Ideologue from academia with no real world experience, Obama chose to monopolize the government with his policies and ideas, while ignoring the opposition. The government and Washington became known as the Obamanation as we were bombarded with and absorbed Leftist principles and policy like never before in our history.” He continued, “Obama was confident to the point of arrogance and his refusal to admit his Marxist policies weren’t working, served to further anger the public when he continued on with his ideological conquest of America. He conducted the country’s business with the faith of the blind ideologue, effectively angering an ever increasingly larger percentage of the population, to the point that they became suspicious of his intent and wondering if he really wanted to destroy the economy rather than rebuild the economy.” BTW, Karl Marx 6 was a socialist.

U.S. Debt as a Percentage of GDP

Today (23 Jun 11), by one economist’s estimate, the debt is 100% of this country’s Gross Domestic Product (GDP). 7 A recent study 8 by economists Reinhart and Rogoff found that debt exceeding 90% of GDP hinders economic growth. The Congressional Budget Office (CBO) offers a slightly more conservative estimate, 9 saying it will be 2021 before we reach that threshold if future spending is not curtailed.

Greece’s Situation

With the U.S. debt figure in mind, I examined the situation in Greece, where riots are currently taking place. The debt to GDP ratio is frighteningly similar between the U.S. and Greece, as can be seen in this chart.10

Metric USA – 2010 Greece – 2009
Spending as % of GDP 25.4% 50.4%
Deficit as % of Spending 41.8% 26.8%
Deficit as % of GDP 10.6% 13.5%
Debt as % of GDP 94.3% 115.1%

The article’s author, Robert V. Green, states:

The remarkable numbers in this chart are the deficit as a percentage of GDP and the total government debt as a percentage of GDP.

Greece and the US look very similar when these total debt and deficit spending numbers are compared as percentages.

Even more remarkable, however, is the fact that 40 percent of the US spending is financed by debt. The implication of this number is that the US will be adding debt to its balance sheet over the coming years at a faster rate than Greece does currently.

Green concludes:

When you compare the US debt situation using the Deficit metric, there are strikingly similar characteristics, particularly when viewed as percentages of GDP.

What this means is that someday in the future, when the intra-governmental debt needs to be redeemed to pay the future promised benefits of Social Security and other programs, the US may find its debt burden to be a difficult challenge, just as Greece is challenged today.

More digging found this reference11 about Greece by Frank Salvato:

Greece’s Socialist government has come to a moment in time when the system has failed. The promises of the Nanny State and prefectorial centralized government have come up empty and “the people” are angry as a result. If the citizenry of the United States of America isn’t careful and willing to make some painful adjustments, economically, we may be starring this future directly in the eye. Today we Americans stand at a moment in time when a very hard decision needs to be made. We can either follow the path of the Socialist Greeks, or we can fee pain in the form of sacrifice so that our country might continue to exist for future generations.

Another reference12 discusses the Greek, Portuguese, and Irish debt and its implications for the GDP.

EU Anarchy and Riots

All of Europe, both western and eastern, are experiencing rising austerity protests in 2011.13 Social unrest over the financial crisis has varied from country to country. In some of the worst affected nations such as Ireland and Latvia, acceptance and even apathy has prevailed, while Greece has seen fatalities and street clashes. There are signs of rising social pressures. Many Western European countries are only just embarking on multi-year deficit-reduction packages, a hard sell in states where expectations have risen for generations. Greek protesters clashed with police in central Athens as tens of thousands marched against austerity measures aimed at pulling the country out of a debt crisis. Italian rioters and police fought battles in Rome after Prime Minister Silvio Berlusconi won a no-confidence vote. Britain saw its worst clashes in two decades as students demonstrated over tuition fee rises. More unrest is expected in 2012 as unions protest against much broader cuts.

And this reference14 provides information about riots in Barcelona, Spain.

This reference15 discusses the economic situation in Ireland. Dublin saw some demonstrations late last year, but they were rather civilized compared to the strife elsewhere in Europe. That will almost certainly change. Ireland is having a financial crisis caused by banks, not an economic crisis. If anyone is justified in feeling wronged, it is the Irish, because they are being forced to pick up the tab for their bankers’ gambling losses. The government is investing about €45 billion to recapitalize the banks. A big part of the €67.5 billion in bailout money Ireland is receiving from the European Union and the International Monetary Fund in December will be used to prop up the so-called zombie banks – ones that are essentially worthless but still carry on business with government support. The cost of the bank rescues more than doubled Ireland’s 2010 budget deficit to 32% of GDP, according to European Commission estimates, compared to 9.6% for Greece. The ratio of Ireland’s total public debt to GDP soared to almost 100% from 65% a year earlier. Thanks to the battered banks, the ratio is expected to reach about 115% by the end of 2012.

This reference16 discusses what MAY happen in England and what IS happening throughout Europe. Just imagine living in a Britain in which the state had broken down completely. You would see mobs rampaging through the streets and fires burning in the capital city. You would see thousands of people take to the barricades, blazing with outrage at their betrayal by the political classes. That is what is happening right now in Greece, at the epicentre of what may prove to be one of the most terrifying political and economic crises in our lifetime. What has happened in Greece is a chilling lesson in the dangers of European federalism, financial indiscipline and economic hubris.

The really terrifying thing is what this means for the rest of Europe. Greece is not the only country to find itself in this appalling mess. Many experts are convinced that the contagion will spread to similarly profligate members of the eurozone. Only a month ago the EU had to bail out Portugal to the tune of €78 billion, demanding massive spending cuts in return.

Last year Ireland, which had mismanaged its finances with breathtaking irresponsibility, was forced to accept a massive €85 billion bail-out, including some £7 billion from British taxpayers. But the real fear is that the infection will spread to Spain, where the collapse of the property and construction industries has left unemployment at 20 per cent and an economy teetering on the brink of meltdown.

Are Riots and Anarchy Coming Here?

This reference17, by Michelle Malkin, highlights the riots in Greece, as well as by the SEIU18 in San Francisco, CA, New Jersey, Santa Cruz, CA, and Ashville, NC. This reference19 discusses gas and food prices. Take increased oil prices, increased food prices and food shortages created by weather, government action/inaction and ethanol manufacturing and it appears that the United States has a recipe for disaster. Does this country really want a government who appears to be leading us down not only the fuel shortage path, but also the food shortage path? Do we want a disaster because everyone’s in a big hurry to “change” things? Here is yet another reference20 that discusses the consequences of debt. Riots and protests have swept across Europe, as populations lured into government dependency are upset that there’s no longer enough money to maintain the existing level of redistribution. It’s just a matter of time before the same problems afflict America. The solution is to limit the growth of government.

In economic straits (caused by Obama policies) where do cities look to balance budgets?

This reference21 discusses the budget woes of the city of Houston, TX, and the consequences of budget cuts. The city’s budget crunch now means firefighters and police officers could be losing their jobs. HPD Chief Charles McClelland says right now he’d have to lay off 181 police officers and 445 civilian employees. And a source tells us about 200 firefighters are facing job cuts, as well, due to the budget. “When we have structure fires with fatalities, it’s always almost the very, very young or the very, very old and we’re making a decision here that essentially says the city of Houston is OK with the very, very young and very, very old dying in house fires,” said Jeff Caynon, president of the Houston Professional Firefighters Association.

Here is a reference22 that discusses budget cuts in Camden, NJ. The article states: On Tuesday, officials in Camden, N.J. – a city that ranks high in crime and poverty – are planning to cut almost 400 workers, nearly half of them police officers and firefighters. And this reference23 discusses firefighters. Firefighters are sacrosanct. No matter the depths of a municipality’s budget crisis, neither the firefighters’ ranks, pay nor benefits are touchable. There are no reductions in force for firefighters. And yet, in cities all across the country, that’s exactly what has been happening. The new landscape has clearly been shaped by the brutal fiscal conditions in localities. In an era of such severe economic uncertainty, high-level municipal officials have not been shy about portraying firefighters as a group that has vacuumed up more than its fair share of municipal resources.

America’s Coming Greek Tragedy24, by DrJohn

And I could not possibly agree more with “America’s Coming Greek Tragedy” post by DrJohn, on 23 Jun 11. While his excellent article focuses on Greek unions, this post focuses on the consequences of failed economic policies. Ultimately, we both end at the same place: riots are coming to America.

So the bottom line is:

If anarchy25 comes to this country, who will maintain civil order and extinguish/fight fires after the cities, for economic reasons, let go/fire all of the police an firefighters?

And can cities look to police and firefighter unions for help?

But that’s just my opinion.

  1. http://pajamasmedia.com/blog/new-l-a-budget-is-ushering-cops-firemen-out-the-door/
  2. http://www.nationalreview.com/articles/269035/it-s-obama-s-economy-stupid-jonah-goldberg
  3. http://blog.heritage.org/2011/05/31/morning-bell-the-unstimulated-obama-economy/?query=Morning+Bell:+The+Unstimulated+Obama+Economy
  4. http://www.politico.com/news/stories/0611/57025.html
  5. http://floppingaces.net/2011/06/21/%e2%80%9cthe-revolution-ate-its-children%e2%80%9d-maximilien-francois-robespierre/
  6. http://en.wikipedia.org/wiki/Karl_Marx
  7. http://www.sutton-associates.net/blog/2011/02/14/us-debt-now-100-of-gdp/
  8. http://www.economist.com/blogs/freeexchange/2010/07/debt
  9. http://www.ibtimes.com/articles/167780/20110622/cbo-congressional-budget-office-budget-deficit-national-debt.htm
  10. http://www.briefing.com/GeneralContent/Investor/Active/ArticlePopup/ArticlePopup.aspx?ArticleId=NS20100514150704AheadOfTheCurve
  11. http://www.enterstageright.com/archive/articles/0611/0611greeceword.htm
  12. http://www.businessweek.com/news/2011-05-15/greek-portuguese-irish-debt-seen-topping-gdp-this-year.html
  13. http://www.reuters.com/article/2010/12/15/us-europe-protests-idUSTRE6BE3FK20101215
  14. http://thelede.blogs.nytimes.com/2011/05/27/police-clash-with-protesters-in-barcelona/
  15. http://www.theglobeandmail.com/report-on-business/rob-magazine/the-irish-arent-rioting-over-austerityyet/article1879098/
  16. http://www.dailymail.co.uk/debate/article-2004550/Greece-riots-2011-A-crisis-tear-Europe-apart.html
  17. http://michellemalkin.com/2010/05/05/the-anti-austerity-riots-in-greece/
  18. http://michellemalkin.com/2009/11/24/seiu-tantrums-in-san-francisco-update-public-sector-protectionism-rejected-in-nj/
  19. http://co2insanity.com/2011/02/13/food-and-gas-riots-coming-to-the-us/
  20. http://danieljmitchell.wordpress.com/2010/09/30/europes-riots-americas-future/
  21. http://abclocal.go.com/ktrk/story?section=news/local&id=8088145
  22. http://www.npr.org/2011/01/17/132929677/camden-n-j-braces-for-police-firefighter-layoffs
  23. http://www.governing.com/topics/public-workforce/firefighters-feel-squeeze-shrinking-budgets.html
  24. http://floppingaces.net/2011/06/23/americas-coming-greek-tragedy-reader-post/
  25. http://www.merriam-webster.com/dictionary/anarchy
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