Greece, GDP and Dr. Seuss

There have been riots in Greece but I didn't really understand why other than Greece's economy was shot. Then I read an article about Greece's debt to GDP ratio and for the first time I truly understood the impact of what they were saying. Before, I would get lost in talks of billions and trillions, it sounds like something out of a Dr. Seuss book* but this ratio made sense. It divides debt (the amount a country owes) into the Gross Domestic Product or GDP (the total market value of all goods and services produced in a country in one year). To make it easy, if a country produced $50,000 and had debts of $5,000 their debt ($5,000) as a percentage of their $50,000 GDP would be 10% ($5,000/$50,000).

Greece’s current debt to GDP is an astonishing 115%. So for every $100 produced, Greece would spend all of it plus owe another $15 giving it a deficit of 15% which it has no way of paying back since it has already spent all of the money it produced in a year. Thus they needed a loan from the UN to make up for its deficit spending. If Greece doesn’t curb their spending then economists predict that Greece’s debt to GDP ratio will top 140% by 2014 which is a 40% deficit! Something must be done but their ideas of drastic changes are ridiculous. Two of the measures they plan to implement include changing the retirement age from 61 to 63 and abolishing a two-month pay bonus which state workers receive every year. Oh my, no wonder protesters were rioting!

The truly disgusting part is that the U.S. helped pay for the bailout given to Greece. And it won’t be just Greece that is falling apart. France’s debt to GDP is 80% and expected to grow to nearly 90% by 2014. No surprise as France is another nanny nation where the retirement age is 60, the typical French worker can expect to spend 24 years in retirement and civil servants will earn 75% of their pre-retirement income, not to mention 6+ weeks vacation when they do work. Yet Sarkozy refuses to discuss cuts to these overly generous benefits. Instead, France hopes that for some reason their workers suddenly become motivated and increase production (a higher GDP would then mean a lower debt to GDP ratio).

So on one hand there are these spoiled European countries with their low retirement ages, high pensions, months off and big bonuses and on the other hand there are us, the United States taxpayers. The US worker is lucky if they gets a 3-week vacation compared to months off in France and Spain. And lately, most US employees figure they will have to work until they are at least 67 to have enough saved for when they can retire. It galls me to think that part of our hard earned money is being siphoned off to support people who riot at the thought of increasing their retirement age of 60 to 63. We thought it was bad when we were burdened with supporting deadbeats and illegal immigrants here in America but it turns out we are also supporting the lifestyle of European citizens through UN bailouts. Maybe it should be the American taxpayers who are protesting. Oh wait, hello Tea Party.

Yet in direct opposition to the Tea Party’s goals, President Obama continues to rapidly transform the United States into becoming more like Europe by spending trillions of dollars and increasing our debt. But what is our debt to GDP ratio, you ask? It will probably come as no surprise that it has grown substantially since the last election. Back in 2006, America's ratio of debt to GDP was 61.9%, and in 2007 it grew slightly to 63.1%. Then came Bush’s bailouts in 2008 which increased our debt to GDP to 70.5%.

After Obama became president, the ratio jumped in one year from 70.5% to 87% in 2009! This year it again increased dramatically to 97.5%! Thanks to Obama’s health care program, stimulus packages and bailouts, the United States is now spending $97 for every $100 we produce. If we keep on this track we are estimated to have a projected debt to GDP in 2014 of 106.7%! Like Greece, we would be spending more than we produce. We are faced with the same basic choices as Greece, France and every other country; either we produce more or we spend less. (Again this is taking a very simplistic view of the situation.)

Right now, it almost seems as if Obama and his team are crippling our ability to produce more. It is hard to increase our output when we have a 10% unemployment rate. Yet after nearly 18 months there are still no comprehensive job programs nor has he used the bulk of the stimulus money. Education is another factor since you would think that the better educated worker would produce more. Our first African American President and First Lady would be wonderful role models to minority children. Michele should be preaching about staying in school and tackling the exorbitant drop out rates in inner cities, not showing off her muscles and harassing pudgy kids.

We also need to be a leader in technology which will help workers to produce more by providing better electronics, tools and equipment. Yet Obama is destroying our 50 year old NASA program which encouraged kids to study math, science and physics, not to mention exploring planets and stars. And on the opposite scale from NASA are the small businesses which Obama is crippling with his new taxes and initiatives. Not to forget big businesses or fat cats as Obama so prejudiciously calls them. He's happy to take their money for his campaigns while blaming them for our country's woes at every opportunity.

I cannot think of a single thing Obama has done that would encourage the businesses, small or big or the government to produce more. Can you? But we can’t continue like this or we will end up like Greece. So if we aren't going to increase productivity then the alternative is for Obama and Congress to decrease spending. Ok, did you have a good laugh, too, at that thought? But if Obama and Congress won’t stop spending then we have to stop them. It's that simple. Vote them all out and vote for leaders who believe in small government and individual and state's rights. And while we’re at it, maybe we should stop handing out our hard earned money to the UN, too.


* My take of Dr. Suess on Obama - Obama handed out millions, our millions, your billions, my trillions, and then he gave to the poor even more billions and trillions and gadzillions. Obama spent and he spent, every dollar and cent, bailing out cars, and houses, and banks, yet those louses never ever said thanks. Then Nancy got antsy and Harry got scary as they scurried like rats to round up their Democrats to vote the right vote or the right left vote. And now there's money for health care, money for car fare, money for stimulus plans and wars in Afghanistan.

But I do not like this, Pres, I says. I do not like Obamacare where everyone's on welfare. I do not care at all I says to Pres, I do not like banks too big to fail and so we bail and spend, and spend and bail so if you fail don't wail we'll bail and don't go pale for you'll get no jail instead give yourself a big bonus all on us. Oh my oh my I do not like this Pres, my friend, I do not like this Pres at all. The end.