From JOHN ROBB
As most of us already know, the Greek government is bankrupt.
So far, it has been forced to cut expenses by 34%.
That means they have already made deep cuts in pension payments, government employee incomes, and government employee headcount. And they are just getting started.
The Greek economy is in free-fall and likely to set the record for the most severe depression in a modern country so far this Century.
Our collective problem is that the Greek experience will soon seem commonplaces. Almost all of the nations in the West are headed towards a Greek style bankruptcy given current trends. The US deficit alone is running at over a trillion a year with NO end in sight. So, eventual bankruptcy of the US and most of the EU isn’t a question of what is right or just or what could happen in a perfect world. It’s what is likely to happen.
Given this, the question you should be asking yourself is: What would happen if the US and the EU cut their budgets as deeply as Greece? What if there was an across the board budget cut of 40%?
This is an important question since it is almost certain to happen and it will be ugly. Why? The number of people that…
- currently work for the government,
- get a government pension (or military pension),
- or get social security/medicare/income support payments
is very large.
So, for planning purposes