The crisis in Greece is more than a financial crisis, it is a national meltdown. And while facile comparisons to the United States must be avoided, there are nonetheless lessons for us, says columnist Mona Charen.
First, the differences:
Greece is a small nation of 11.3 million people and its gross domestic product (GDP) is estimated to be in the range of $333 billion.
Greece partakes zestily in the Mediterranean tradition of tax avoidance, and corruption is endemic; many ordinary transactions are greased with "fakelaki" (little envelopes) or "rousfeti" (political favours).
So Greece has cultural problems that contribute to its economic implosion. But there are similarities to the United States as well, says Charen:
By the end of 2011, Greece's debt will be 150 percent of its GDP.
President Obama's 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years -- $1.2 trillion more than the administration projected -- which will increase our debt to GDP ratio to 90 percent by 2020.
One in three Greeks works for the government:
Government employees enjoy higher wages, more munificent benefits and earlier retirements than private sector employees.
Civil servants can retire after 35 years of service at 80 percent of their highest salary and enjoy lavish health plans, vacations, and other perks.
All civil servants receive payment for 14 months for 12 months' work; and it's impossible to fire them -- even for the grossest incompetence.
Public sector unions are growing in the United States:
More than 50 percent of all union members are now public employees who have negotiated sweet deals with local, state and federal governments.
State workers often have "Cadillac" health plans and retirement benefits far above the private sector average; 80 percent of public-sector workers have pension benefits, only 50 percent in the private sector.
Many can retire at age 50.
Greece is in flames, but if you look around, you can smell the smoke here as well, says Charen.
Source: Mona Charen, Athens or Washington, It's the Size of Government, Patriot Post, May 7, 2010.
For text: http://patriotpost.us/opinion/mona-charen/2010/05/07/athens-or-washington-its-the-size-of-government/
For more on Economic Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=17
First published by the National Center for Policy Analysis, Dallas and Washington, USA
FMF Policy Bulletin/ 18 May 2010