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GREECE VOTES ON AUSTERITY MEASURES ON WEDNESDAY

The bill is due to go to a vote on Wednesday and – if passed – would come into force the following day.  It would trigger the release of 12bn euros (£10.7bn) in loans to Greece from the European Union and International Monetary Fund. Two of Papandreou’s own deputies are saying they will vote against the bill.  His governing Pasok party has a slim majority, with 155 seats out of 300 in parliament.

SOURCE

UNIONS CALL FOR TWO-DAY NATIONAL STRIKE

Unions have called a two-day national strike starting on Tuesday. Thus parliament members will be in touch with what the people want–look for lots of rioting over the next two days in Greece, likely some of the most ferocious yet.

UPDATE RIOTS TODAY REPORTED.

AS GREECE GOES, SO GOES ITALY?

CNN money reports that traders in Europe have begun to worry about the fiscal health of other eurozone members.  Now the worry has moved up the scale to one of the core eurozone members:  Italy.  According to CNN Money,  what worries economists and traders is the nation’s very high debt-to-GDP ratio emanating from structural inefficiencies in its economy. This has led to decades of declining productivity and poor growth.  Italy’s current debt load is around 1.8 trillion euros, making it the fourth-highest public debtor in the world. Having debt is not a bad thing; it just becomes a problem when the amount of debt on the books exceeds productivity. The nation’s debt to GDP ratio stands at an alarming 120%, the second-highest in Europe after Greece at 140%. To put that into perspective, Italy’s ratio is double that of Spain.

MORE ABOUT ITALY AT CNN MONEY.

MORE ON CONTAGION

IMF is largely funded by the American Taxpayers

and the Wall Street Owners like it that way!

As I was driving home today and listening to a PBS interview with a Greek economist  regarding the current economic crisis in Greece, I wondered how many Americans have enough information even to ask the right questions.

In order to learn what I do know about the Greek crisis (which I regard as far from adequate) I have had to do quite a bit of digging over the past few months from many sources, and prior to that I did know quite a bit regarding IMF so I began with some base of understanding. I can well-imagine that many Americans give up the ghost before even trying and no wonder.  There is so much purposeful obfuscation surrounding the IMF coming out of Washington DC and mainstream media.

More and More the Greek Bailout Is Sounding Like an International TARP–a bailout of banks–not the Greek people.

The economist was saying that if the vote of confidence passes the Greek parliament today and if they agree to the austerity measures that Greece will likely get the $15 billion from IMF which of course they will give to the European banks.  Then later when asked about the exposure of US banks in this deal, he said that their exposure was about $34 billion and they are in line for money from Greece after the European banks.  According to this economist, Greece gets the $15 billion, they will still have to crack down on the people who are evading taxes, and there will be the IMF structural readjustment that also follows which means more austerity. “HUH? Wait a minute! ”

What I don’t understand is why do the US banks have a $34 billion exposure? Do you?  When did U.S. banks give Greece $34 billion? And if even if they did, why should that be the responsibility of the American taxpayer to protect people like Goldman Sachs?  As far as I’m concerned, Goldman’s CEO and all its executive officers should be in prison for life for their crimes against humanity. Give them our tax money?  Hell no.*

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* Here is a part of the story that many Americans don’t understand.  Our tax dollars fund the IMF.

True, the citizens of other western countries kick in a little but the lion’s share is from the American taxpayer.  Thus this $15 billion that is being “loaned” to Greece is actually the U.S. taxpayer’s money AND it is NOT going to Greece but rather to European banks.  How’s that for sleight of hand?  Do you think that we will ever see that money again?  Hell no.  Do you think that the Greek people will see it?  Hell no.

Our Congress, filled with 261 multi-millionaire Wall Street investors don’t like for us to know this. That’s more than obvious because they hide the American taxpayers funding of IMF by slipping these allocations into other bills so we won’t notice.  For example, in June of 2009, $100bn funding for the IMF was slipped into  war supplemental bill.  That’s right. [SOURCE]

NOTES ON THE IMF STRUCTURAL ADJUSTMENT PROGRAMS

Advocacy groups like RESULTS have long been critical of the IMF’s draconian policies, starting with its structural adjustment programs in the 1980s and ’90s. Under structural adjustment, many poor nations were forced to require user fees for health and education, putting those services beyond the reach of the poor at a time when AIDS was laying waste to Africa. Though no longer requiring user fees, the IMF now imposes budget caps on nations, preventing them from hiring more health workers and teachers, another way that the poor are denied access to these services.

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I decided to see if the President could answer a question I have that is central to our tax dollars being given to the IMF.  So I sent a note to the White House:  What is the return on investment for the American taxpayer for our tax dollars to be forked over to the IMF?

From Iflizwerequeen Archives

Why should you care about what happens to Greece?  Because it could be  your future – May 25, 2011

It is critical for the people of the USA and the world to understand the IMF and what it does to a nation’s economy. Feb 5, 2011

Unabashed propaganda from Time Magazine about Egypt Feb 4, 2011

Once again on Egypt:  Connect the dots to IMF and U.S. Corporations Feb 3, 2011

Connect the Dots to Understand U.S. and Wall Street Connection to World Misery January 29, 2011

More Light on Wall Street Flim Flam–a look at IMF Oct 11, 2009

Looks like Hedge Fund Democrats need more time for arm twisting. Vote for continued war funding and money for IMF is postponed. June 16, 2009

All over the media we read headlines such as “Fears of Greek Default Ease” and when you read the details of these reports, what you find that they are based on is the fact that Angela Merkel after meeting with Sarkozy said that Germany would soften its position to private investors. Rather than force them to bear a substantial part of the burden of a rescue  Germany agreed to ask investors to participate in the bailout on a voluntary basis. (And what exactly does this mean in plain English?  that they can choose to not be part of a community when it does not serve their profitability  and then be part of a community when it profits them? My Mom used to call that “fair weather friends.” ) Unless you give a-moral people a very strong incentive for ethical behavior, don’t expect it to be forthcoming on a volunteer basis.  Look to the off shore accounts set up by these people to evade taxes for one example.

As far as I can tell, no one has asked the people on the streets of Greece what they think. If they did, and “the Markets” that the rich love to personify could actually read these reports, their fears of Greek default might not be easing.  If anything, this news about going soft on the rich is more likely to inflame the Greeks.

WHAT IS  KEY TO THE GREEK ECONOMIC PROBLEM IS AT THE HEART OF THE U.S. PROBLEM AS WELL:  RICH FREELOADERS WHO EVADE TAXES.

Like many countries, the Greek government relies on borrowed money to balance its books. The recession has made this harder to achieve, because tax revenues are falling just as welfare payments start to rise. It doesn’t help that, in Greece, tax evasion is commonplace.

In the USA tax evasion added $3 trillion to the deficit over the past decade alone, an average of $300 billion a year, according to IRS data. This isn’t revenue lost from legal tax write-offs, like the mortgage interest deduction. It’s not even, as the IRS notes, “taxes that should have been paid on income from the illegal sector of the economy.” That $300 billion represents the amount of revenue lost from people deliberately cheating on their taxes every year. This includes underreporting income, hidden offshore bank accounts, sham trusts, and other ways to illegally stiff the IRS.

MAYBE–I hope so.  I hope that Greece defaults and tells the rich of Europe and the world and their G8 pimps to go jump in the lake.

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AND IF YOU THINK THAT GREECE IS THE ONLY GOVERNMENT THAT IS UP FOR A FIRE SALE, YOU MIGHT WANT TO LOOK AND SEE WHAT YOUR LOCAL CHAMBER OF COMMERCE HAS DONE TO YOUR OWN LOCAL GOVERNMENT.

Some states like Arizona and Michigan have already begun these fire sales for the rich at a state level.  Greece isn’t the only government that needs to hold referendums to stop the spread of the greed of the rich.

Greece is being sold to the highest bidder–the rich hope.

George Papakonstantinou, Greece’s finance minister, has announced the sale of stakes in five state-owned Greek enterprises as part of efforts to reduce the country’s budget deficit.

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BUT THE PROVERBIAL FAT LADY HAS NOT YET SUNG. Greece may default on its loans and essentially say to hell with the Euro.–Kinda like declaring bankruptcy and then saying–what are you going to do about it?

Eurocrats insist that Greece will not default on its sovereign debt obligations, but the markets think otherwise.

As politicians and policy makers haggle, analysts are trying to game-out what would happen in the event Greece defaulted. Moody’s Investors Service in a note this morning tried to put a little meat on the default scenario.  You can read it in the WSJ if you like.

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What do I think Greece should do?

I agree with Peter Morici (an economist and professor at the University of Maryland) I think Greece  should restructure their debt and abandon the euro to reassert control over their finances.

Just one year after wealthier European Union governments and the International Monetary Fund (IMF) extended 110 billion euros (US$155 billion) in emergency financing, Greece is unable to meet the aid plan’s deficit reduction targets and grow fast enough to make its debt payments more manageable.

The European Central Bank and IMF insist that Athens can meet those targets but raising taxes or cutting spending further would only slow growth more and likely cast Greece into a deep recession from which it could not recover.

Bond investors are demanding yields 20 percentage points higher on Greek debt than on comparable German debt.The collapse of Athens’ finances seems inevitable.  As the market value of those securities would be much lower than the face value of Greece’s current outstanding debt, such a restructuring would constitute a “soft default.

Unless Greece gets significant concessions and loans at preferential rates from the EU and IMF, it will be impelled to ask private creditors to accept bonds with longer maturities and paying lower interest rates than the bonds they currently hold.

If Greece still had its own currency, it would still need to cut spending and increase taxes – but not by nearly as much as the EU aid pact requires – because Greece could also devalue its currency against those of richer EU economies to make exports more competitive, accelerate growth, and increase debt servicing capacity.

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In a sense, you can compare Greece to being in the same position that many Americans are.   They too are being taken advantage of by wealthy bankers who gave out loans with unfair terms, harsh rates and unrealistic payment schedules.  Now they are putting on the squeeze like the repo man. This is just one of the many reasons why IMF should be dismantled.  That’s how it works:  The rich get the best loan rates while the poor who need a break most pay through the nose.  If Germany or France had to pay off their loans at the rates they are demanding that the Greeks pay, we would hear them bellowing all the way across the Atlantic.

GO FOR IT GREECE.  DEFAULT!