At their most recent meeting, the finance ministers representing the 17 countries that comprise the eurozone, along with the IMF (International Monetary Fund) and ECB (European Central Bank), have thus far failed to decide on releasing the next tranche of bailout funds to insolvent Greece. Without the bailout money being released, Athens is fiscally up the creek, without a paddle.
"Greece has done what it had to and what it had committed to doing. Our partners, along with the IMF, also must do what they have undertaken," an increasingly desperate Greek Prime Minister Antonis Samaras pleaded.
The austerity measures enacted by Greece have imploded the economy, now entrapped in a frightful economic depression. The debris of the Greek economy has smashed social cohesion and political stability, witnessed by the sharp rise in popularity of the Fascist and neo-Nazi Golden Dawn party, which has promised economic salvation through bashing the immigrants they claim are the cause of the economic woes in Greece.
It is looking increasingly likely that the repeated bailouts at the expense of eurozone taxpayers, especially from Germany, of the insolvent Greek state will run their course sometime in 2013. The odds that Greece will default on its vast and unsustainable public debt, prompting it to leave or be expelled from the eurozone, are growing.
As the U.S. political establishment confronts its own self-made fiscal cliff, it should view what is transpiring in Greece as an ill omen and not a situation to gloat over. It is only because of the sovereign debt crisis ravaging Europe's economies that has enabled a reality whereby the U.S. government can borrow more than a trillion dollars a year, accounting for about thirty percent of all federal government expenditures, at record low interest rates. This situation cannot endure indefinitely. If American politicians fail to craft a sensible, sustainable, long-term fiscal consolidation, America will end up in the economic wasteland that is contemporary Greece. As we can all currently observe, such a draconian reality would present the U.S. with the choice of either crippling austerity measures imposed by the nation's creditors, or some form of debt default ( including the option that the Federal Reserve engineers massive inflation).
Greece is not only suffering appalling economic devastation. It is also presenting to the world a modern-day national Cassandra, with a prophetic warning that is especially relevant for American policymakers.
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