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Greeks seem destined for tragedy

| Thursday, May 6, 2010

Happy ending to a Greek tragedy•

Well, Greece is being bailed out, but add "to be continued" to this script. And, for Americans: when will our turn come•

Because the human failing is the same, a tendency of free governments to spend too much money. Then they're forced to quit. Taxpayers might not insist on it, but creditors do.

Coming down from the spending high is agonizing, however, personally and politically. The pain is put off as long as possible. But now it's happening in Greece and one day it seems inevitable to happen in the United States, Pennsylvania and Pittsburgh too.

All are beset by out-of-control spending promises.

While the quality of public services declines -- holey streets, dumbed-down schools and the like -- government workers, interest groups, teachers, and the millions of voters on "entitlements" have to be taken care of. They were promised!

Such is the grim Greek drama, but our unionized civil servants should pay heed. Or perhaps find themselves shouting in the streets as Greek government workers felt pushed to do these recent days. And this after an ironic "success" at the loan window.

The 16-nation European Community agreed to a record $146.6 billion bailout to hold off the bankruptcy of a profligate member nation. But at what a price in individual pain.

The Athens government had to pledge radical austerity savings -- pay cuts, alcohol and tobacco tax hikes, layoffs and pension freezes, heavily landing on public employees -- to qualify for a three-year respite of the rush to ruin.

"I have five children, I work all day and make 1,020 euros ($1,326) net a month," Reuters quoted a 49-year-old physician at a Greek state hospital. (Socialized medicine in action?) The belt-tightening is "cruel and inhuman," he said. "People cannot stand it any more, they will revolt."

A leftist newspaper predicted five years of "asphyxiation" for the Greek people. And a "violent modernization" for the economy, which continues in recession. The Greeks' Gross Domestic Product is forecast to shrink 4 percent this year, another 2.6 percent in 2011. That translates to a country getting poorer.

Yet doubts linger whether a financial rescue is under way or a few gulps of air before drowning again. Two previous rounds of austerity didn't steady the Grecian boat.

Longer-term, it's obvious Greece has to produce more. It's got to compete better for investor funds and modern industry. Decades of accustoming its population to a top-heavy public sector haven't made the land of blue sea and skies a productivity powerhouse.

By contrast, budget-conscious Germany took the lead putting together the life-saving pack. It expects its banks and taxpayers to sign for 22 billion euros of the total. Not all the German public likes that. Their attitude: why put the responsible at risk•

The Washington-based International Monetary Fund also has a big backup role. The IMF specializes in bullying national borrowers to get their tax-and-spend habits in order. And the IMF's biggest contributor is the United States. So surprise! -- we are in on the rescue, too. May it prosper.

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