WASHINGTON, June 30, 2015 – “The debt is not payable,” said the embarrassed politician to his creditors. “There is no other option. I would love to have an easier option. This is not politics, this is math.”
No, that was not Greek Prime Minister Alexis Tsipras. That was Puerto Rico’s Gov. Alejandro Garcia Padilla. Notice that driving up government spending and debt never poses mathematical problems for big-government politicians and the graft-yearning fools that elect them, only paying back that debt with interest.
Gov. Padilla told his island’s creditors that if they don’t agree to take a haircut on their Puerto Rican bonds, “Our economy will get into a worse situation and we’ll have less money to pay them. They will be shooting themselves in the foot.”
Actually, lending a government money to buy the votes of favored constituencies is, and always will be, a foolish “investment.” In this case, it’s hard to have sympathy for the lender any more than the lendee.
According to the Federal Reserve Bank of New York, “For the first time in modern history, Puerto Rico is seeing its population decline. This troubling loss can be traced to an exodus of Puerto Rican citizens to the U.S. mainland… a ‘brain drain’ – that is, the loss of its most educated, or highest-human-capital, citizens… Without significant economic growth and the job creation that would follow, incentives to leave the Island will remain compelling.”
Back in 2012, Greek columnist Nikos Konstrandaras wrote an op-ed for the New York Times that said that out of Greece’s population of 11,062,500, “fewer and fewer people are shouldering the burden of keeping the country on its feet.”
Konstrandaras put the mathematical emphasis in the wrong place. Rather, it’s the majority of Greeks that have knocked the country off its feet – those who for so long demanded more and more government benefits than the nation’s economy could support. Their solution was to elect a stream of governments to buy them what they wanted… on credit.
Konstrandaras further noted, “Even immigrants from Bangladesh and Pakistan, who came seeking a better life [in Greece], are moving on.”
The zoo of radical leftists that make up the Greek government has decided to pass the buck (the only one left) to its people. Greeks will have an opportunity to decide in a weekend referendum whether they wish to remain in the European Union, under the euro or depart, stiff their lenders and trigger a humanitarian crisis in their country not seen since World War II.
That referendum, said the New York Times in its Monday lead editorial, “will be perplexing to voters… At this point, the long-running accusations filling German and Greek tabloids – that the spendthrift Greeks should be taught to live by European rules; that the relentless austerity demands by Germany and other lenders has served only to destroy Greece’s economy and its ability to pay back its gargantuan debts.”
Once again, the mathematical emphasis is put in the wrong place. Spending + excessive debt = a destroyed Greek economy. Angry Germans demanding repayment are not the mathematical focus of evil in this equation.
It’s an act of supreme idiocy for Greek Prime Minister Alexis Tsipras to believe his nation’s deluded citizens can solve at the voting booth the very problems they created there.
Meanwhile, the more serious Greeks and Puerto Ricans are voting with their feet.