Have you grown weary of the crisis in Europe?
It has greeted me almost every morning for two years as I turn on CNBC. At least once per month the Eurozone is in dire straits. The PIIGS (Portugal, Ireland, Italy, Greece and Spain) are paying more and more to borrow, and Greece is surviving on traunches of charity doled out by wealthier member nations each quarter.
What is the point?
Greece should have never been in the Eurozone. It cooked the books thinking that the euro would be good for the Greek economy. I guess no one bothered to check the balance sheet (debt to GDP). I am not sure why. The recent elections in France and Greece indicate that austerity is not too popular and that France may attempt to spend its way out of recession. We all know how that works (or doesn't, rather); we are 16 trillion in debt ourselves.
In spite of all this, Germany is determined to save the euro and will most likely give Greece its June tranche payment. This seems like throwing good money after bad since the Greeks have no growth. Many are not even working or are on strike. Others refuse to pay taxes. They cannot even form a coalition government, so why is the Eurozone determined to continue to float Greece?
There is the fear that a Greek default would start a domino effect in Europe, destablizing Spain, Portugal, Italy and Ireland. This is a real concern because these peripheral countries are already on the brink, barely able to service debt. Without devaluation of the euro, it would be difficult to restore faith in the zone and Europe could fall into a deep recession or possible depression. The truth is that only Germany has positive GDP, and Germans have already put cost-cutting measures into play.
While the German taxpayer is not too happy, there are none of the riots and whining coming from other European nations that have become completely socialized. Nations that retire workers in their 50s or 60s. Nations that offer eight weeks' paid holiday along with free medical and other services. You may think that it sounds nice getting all those perks, but there is no free lunch. Their people pay dearly, and now they are faced with paying much more to keep this structure intact.
All this reminds me of Ayn Rand's last novel, "Atlas Shrugged," where many of society's most productive citizens start refusing to be exploited by increasing taxes and regulation. The most productive minds of the world essentially go on strike and disappear. These minds of the world hope to demonstrate that a world where a person is not free to create is doomed. Civilization cannot exist if every person is a slave to their government.
Europe is an example of failed social policy as it does not acknowledge or reward the exceptional, but rather makes everyone exceptional to equalize society. If everyone is exceptional, then no one really is. Let us look at this lesson before we decide to go down the same path. The greatest minds of the world are here because they are rewarded for taking a chance. Do not demonize them for their rewards. These are the very people who employ most of us. If they are gone, that leaves only the government to supply jobs, and someone must pay for all of this.
I prefer that it not be me.
• Carol Perry is a retired financial adviser and has been a Northern Nevada resident since 1983. She can be reached at Carol_Perry@att.net.
