Can’t blame this on “greedy, fat cat Wall Street bankers”.
Greece may be the domino that leads to an even deeper recession:
True, Greece’s economy by itself isn’t much. But if Greece takes the EU down, the U.S. will suffer, and badly. It used to be said, “No man is an island.” Well, today, no nation is an island.
All this is starting to sink in. The Fed’s decision on Wednesday to keep U.S. interest rates near zero indefinitely was in large part due to the euro crisis.
Even President Obama, who had held himself aloof from Europe’s fiscal ills, said through a spokesman Thursday he’s “monitoring it (the euro crisis) very closely,” and that it is of “great concern.”
Problem is, Greece isn’t our only worry. IMF head Dominique Strauss-Kahn on Thursday warned of economic “contagion” sweeping through Europe and perhaps by inference leading to another financial panic in the U.S. Even Great Britain, once the world’s financial center, is vulnerable.
Very few EU nations are in good enough fiscal shape to help the others. It’s quite possible that one of these key players — like Germany — will decide it’s had enough and opt out of the monetary union. If so, the euro will die. In the long run, that will give European nations back their sovereignty. But in the short run, it means chaos.
All this because a few countries can’t keep their fiscal houses in order. In the end, tiny, picturesque Greece may be the trigger for a much worse global crisis than anyone has imagined.
But, as Keynes said, “in the long run, we’re all dead”, right? Fortunate for him, he died well before he could see the impact of his stupid economic philosophy. I mean, really, how in the hell do you spend gobs of money and produce economic growth? Once our “leaders” recognize that they are the problem and not the private sector then we’ll be on our way to a true recovery.