The NA710N

As has become the norm, the Obama Administration stroked the ire of all but its most fervent supporters this month as, in the midst of some dramatic news regarding health care reform and the current war in Afghanistan, leaders made a talking point out of the success of the economy. Yes, the success! The unemployment rate plummeted dramatically from the 10.2% national peak in October to a rock bottom 10% in November. The report, President Obama commented, was met with hugs all around the White House. The rest of America, however, still had to deal with double-digit unemployment and the mockery of the White House’s favorite problem-solving mechanism, the “summit.” At least during the “job summit,” the President knew better than to bring along a six-pack (or Joe Biden), but that didn’t dilute the outrage at hosting such an event exclusively with leaders favorable to the administration, like New York Times columnist Paul Krugman and SEIU president Andy Stern. His attempt to calm the opposition in a jobs-oriented speech last week was also met with skepticism, not least because he outlined a plan to spend even more money on a job creation program while simultaneously lowering taxes, a plan rendered impossible to the point of absurdity given the size of the national debt.

While no comment is less useful in times of turmoil than “it could be so much worse,” taking a look across the pond could provide some perspective for how strong, even through adversity, the American economy remains, and how even the most apparently powerful financial coalition could be hanging its stability by a thread. Even more importantly, taking a look at the flaws of fellow Western nations could help shape the policies of our future. Hidden among the avalanche of negative economic news last week came some unfortunate revelations for a currency the post-dollar world has taken to worship: the Euro. A Eurozone country stands dangerously close to a national bankruptcy, and the continent is in a panic about what that would mean for its currency. The country in question, Greece, was downgraded to the lowest credit level in the Eurozone, and how it arrived there could be a lesson for the Europeans as well as for our country and the value of the dollar.

A piece in the country’s largest newspaper Ta Nea reports that Finance Minister Giorgos Papakonstantinou took complete responsibility for Greece’s economic failings before the corps of the Foreign Press Association, but remained assertive in his belief that the nation would recover from its woes without help. “We don’t expect anyone to save us; we rely on our own forces,” he explained. He later told Bloomberg News that there was “absolutely” no chance of Greece defaulting. French Finance Minister Christine Lagarde stood by the country, claiming that there was a “real, effective” plan in action to save Greece’s economy, but did not specify. Most of the other European officials on hand display much lower levels of confidence, however. Opposition to including Greece in the Eurozone at all has increased across the continent, although many supporters of aiding the small nation point out that this type of predicament is precisely why the Euro was adopted in the first place. Among the top of the EU chain of command, however, displeasure appears to be the most prominent emotion. EU Commissioner of Economic and Monetary Affairs Joaquín Almunia refused to mince words when he called Greece a “threat to the entire Eurozone.” German Chancellor Angela Merkel mentioned a “few time bombs” when asked about the state of the Euro, her statement confirmed to be about Greece by Deutsche Bank CEO Josef Ackermann. Considering the hole Greece has dug itself, with its public debt at 120% its GDP and predicted to rise to 135% by 2011, it is difficult to blame them. This economic behavior is common in the IMF welfare state of Latin America, but for a Eurozone country to be so close to bankruptcy when the Euro is doing so well triggers understandable frustration and confusion.

The relevance of this crisis to us may seem distant given the vast differences between the tiny, semi-agricultural Greek nation and our waning superpower, but every nation stands to learn from the mistakes of another. The story behind Greece’s demise, unsurprisingly, involves an outrageous amount of questionable spending at the hands of PASOK, the nation’s left-wing party (think slightly to the left of Nancy Pelosi). Between 1993 and 2009, PASOK only lost power for five years between 2004 and last October—the most recent term before the current Prime Minister, George Papandreou the younger (the elder being his grandfather; both have been president of the Socialist International), took office. Those years could not reverse the clock on some outrageously large projects for the small nation, the most prominent of these being the 2004 Olympic Games, which were clinched during PASOK years and cost the nation €7 billion. Add to that such PASOK-passed programs as a recently-launched €3 billion stimulus package and €550 million from a project called H.I.P.E.R.B., a sort of birthday present/bailout for all the other Balkan nations that has been extended to 2011, and the reality of bankruptcy begins to take shape. Greece spent themselves to ruin, and even during its more conservative period the government had to shell out €3 billion in damage costs for the 2007 forest fires. Even ignoring this massive drain on the national debt, it’s almost as if a socialist government deliberately spent the country to ruin in order to build it back up in an unrecognizable form.

Sound familiar? Many scholars and commentators concerned with the current spending spree the Obama Administration and Congress are treating themselves to have argued that this is precisely the plan they are trying to follow. That the inevitable ruin (should the spending continue) is deliberate may be conspiracy theory blather, but no one can deny the damage, deliberate or not, the continued spending by our nation’s leaders causes. Obamanomics— federal bailouts, the stimulus packages, the year-end $446.8 billion goody bag bill, the health care reform no one wants, the impending forced passing of cap and trade and the expansion of a war during a recession— has lead to a $12 trillion deficit, $11.5 trillion higher than Greece’s $450 billion debt.

Of course it would take a substantially larger amount to bankrupt our country, but Greece’s economic demise could be a mirror into America’s future if our government continues to spend egregiously with no plans to pay back the national debt. No country is too big to fail. We should know; we taught the Soviet Union that.

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