Greek Economic Disaster Looms Large : America Approaching the Edge?

It doesn't take a rocket scientist to understand America could become another Greece with the growing unemployment numbers, those opting out of the work force now at better then 12%, and the growth of food stamps recipients that now are over 50 million.

Adding to all this is ObamaCare's demands on small business that are laying off workers and or reducing their hours to avoid the crushing demands of the new health care law, and because of the over an reaching government increasing corporate taxes, many businesses are fleeing the country.

Does it ever occur to the politicians that this collapsing Greek government reality could happen here and how the  result to families and our children will be a disaster? And it's not only the Greeks, it the Spaniards and the Italians as well. What about France?

Greek Economy in Shambles
Source: Richard Rahn, "Greece Shows How Far an Economy Can Fall," Washington Times, March 31, 2014.
April 4, 2014

The Greek government has been overspending for years, yet many in the country blame the European Union for their problems, says Richard Rahn, senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

Greece is now in its fifth year of decline.

• Gross domestic product is 28 percent lower than it was just four years ago, and official unemployment sits at 27.5 percent.
• For young people, unemployment is a staggering 60 percent.
• Ten million Greeks currently live in Greece, spread across 2.8 million households with "relationships" with the Tax Office. Of those 2.8 million households, 2.3 million are in debt to the Tax Office.
• One million households cannot pay their electricity bill in full.
• Of the 3 million in the Greek labor force, 1.3 million are without jobs.
• Half of Greek businesses still in operation are in serious financial trouble due to pension contributions and the social security fund.

The greatest danger to turning around an economy like Greece's is the political threat: with so many unemployed and underemployed citizens, frustration is taken out on politicians. Those politicians, in an effort to survive the next election cycle and escape the wrath of their constituents, throw handouts at the public and create "make-work" jobs.

This only stifles growth because whether the new spending is financed by debt or printing money, resources are taken from the productive sector.

Greece needs a strong economy to pull itself out of this financial mess. The current Russia-Ukraine situation could only make matters worse -- the country depends on Russia for more than three-quarters of its natural gas, and most of that gas passes through Ukraine.