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Title: We're All Greeks Now
Source:
Pat Buchanan
URL Source: http://buchanan.org/blog/were-all-greeks-now-4802
Published: Jul 18, 2011
Author: Pat Buchanan
Post Date: 2011-07-18 15:47:55 by jwpegler
Keywords: None
Views: 31517
Comments: 63
Departing for New Hampshire in November 2010, Sen. Judd Gregg, the fiscal conservative President Obama wanted in his Cabinet, blurted an inconvenient truth: “This nation is on a course where if we don’t do something about it, get … fiscal policy (under control), we’re Greece.” The remark was regarded as hyperbole. But Gregg had a point. For though Greece, measured by the size of her economy, is only 2 to 3 percent of the EU or the U.S. economy, she is a microcosm of the West. Consider the demography. According to the most recent revision of the U.N.’s “World Population Prospects,” Greece in 2010 had 11.2 million people. More than 24 percent were 60 or above, more than 18 percent 65 or older. Three percent were 80 or above. And, every year, for every nine Greeks who are born, 10 Greeks die. Greece is slowly passing away. Fast forward to 2050. Greece’s population will have fallen by 300,000 to 10.8 million. The median age will have risen by eight years to 49.5. Half the population will be 50 or older. More critically, the share of Greece’s population 60 or older will be 37.4 percent, with 31.3 percent over 65. One in nine Greeks will be over 80. If Athens is breaking under the weight of early retirement and pensions for seniors today, her situation will be horrendous by mid-century. Where, in 2010, there were four Greeks under 60 for every Greek over 60, by 2050, there will only be 1.7 Greeks under 60 for every Greek over 60. Conclusion: The retirement age must rise, and pension benefits fall, or Greece collapses. What of the possibility of a new baby boom? Not likely, given that the fertility rate in Greece has been below replacement levels for three decades and is today only two-thirds of that needed to replace the present population. Indeed, by 2050, the fertility rate of Greek women will have been below zero population growth for 80 years. One wonders: How can the U.N. estimate that Greece’s population will fall only 3 percent by then? Is the U.N. assuming mass immigration from the Muslim world? But what does Greece have to do with the rest of Europe, or with us? Only this. The median age of all of Europe is rising, and the demographic numbers for Greece look positively rosy alongside those of the east, where population declines in the tens of millions are projected for Russia and Ukraine. And outside Iceland and Albania, not one nation of Europe has a fertility rate sufficient to maintain its population. Those that are projected to grow, like Britain, have to be relying on Third World immigrants and their higher birth rate. But while this may maintain an existing population size, immigrants from the Maghreb, Middle East, Caribbean, Latin America and South Asia, on average, lack the language, technical skills and educational levels of native-born Europeans. The same is true in the U.S., where peoples of European descent are expected to drop to half the population by 2041. Hispanics will grow from 15 percent to near 30 percent of the U.S. population, and their absolute numbers from 50 million to 135 million by 2050. Yet, again, Hispanics and children of Hispanic immigrants have not, as of yet, reached close to parity in educational achievement with Americans of East Asian or European ancestry. People equate today’s immigration with the immigration of 1890-1920. But another major difference is this: We erected a Great Society over 50 years that did not exist in 1920. In Washington in the 1950s, a city of 800,000, half black and half white, food stamps had not been invented. Families fed themselves. Today, in a District of Columbia of 600,000, one in five are on food stamps. Nationally, a program that did not exist in 1964 feeds one in seven Americans, 44 million people, at a cost of $77 billion a year. And that is but a small fraction of our new Great Society. We are entering a new “age of austerity,” said British Prime Minister David Cameron in 2009. The halcyon days are over. Government payrolls, as is happening from California to New York to Washington, D.C., will have to be slashed. Pension and health care benefits, not only for seniors, will have to be reduced. Retirement ages will have to be raised. From food stamps to foreign aid, programs are going to be capped and cut. The left believes it can get the money from the wealthy. But the top 1 percent of Americans in income already carry 40 percent of the federal income tax load, while the bottom 50 percent of wage-earners ride free. This, too, will have to end. We are either going to man up and radically reduce government at all levels in the United States, or the bond markets are going to do it for us, as they are doing it today for Greece, Ireland and Portugal. We’re all Greeks now.
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Begin Trace Mode for Comment # 29.
#1. To: jwpegler (#0)
That's one of the stupidest things i've ever read. Greece isn't selling its debt for next to nothing. Our debt/deficit to GDP ratios are nowhere near Greece's. Greece can't devalue its currency. Greece's economy isn't growing unlike ours. And we could balance the budget over the next ten years simply by having Congress do nothing, thus allowing the Bush tax cuts to expire, and ending both the annual AMT and Medicare patches. Folks want to continue to manufacture a debt crisis in the U.S. when there is none, simply because they want to dismantle New Deal and Great Society programs that they've hated for years.
Of course it is. According to the IMF, total public debt: Greece -- 130% of GDP U.S. -- 93% of GDP (including both Federal and State levels) Greece is clamping down. The U.S. is still spending. The U.S. will surpass Greece's GDP to debt ratio in a few years if nothing isn't done.
Cutting spending in a recession further reduces revenues - see U.S. 1937, Ireland/UK, for examples. Heck, you can even look at the present-day U.S. where massive cuts in state/local government spending over the last year coupled with record low tax rates have resulted in a 9.2% unemployment rate and a slowing economy. And not only is our spending relative to GDP is falling, as is our deficit., but we have far more flexibility to deal with our debt/deficit issues than Greece - we could for example restore tax revenues to historical norms, or as I noted above, simply do nothing and watch our deficit go away in 10 years. These are all facts you wish to ignore.
Nope...
your chart ends in 2009. Remember just yesterday I showed you data showing that spending relative to GDP had fallen from 25% to 24.1% this year? Again - record low tax rates, massive cuts to state/local spending, and falling federal spending relative to GDP = 9.2% unemployment.
The year is not over. The only reason that it might be slightly less than 25% in 2011 is that the GOP Congress has put the breaks on Obama's big spending plans. Government spending as a percentage of GDP has escalated from 19% of GDP to 25% today. As the chart I posted demonstrates, the long-term trend has been for increased government spending, regardless of what happens in any given single year. That's what we have to stop, now.
actually the fall is mostly due to the end of the stimulus. Even with the end of it, Obama's "big spending plans" pail when compared to the big spending Republicans did from 2001-2007. Again, facts which you ignore. Thank your beloved Republicans, notice how your chart shot up "before" Obama became President?
Right. And if the GOP wasn't there the Democrats would be cranking up another do- nothing stimulus.
The stimulus created or saved 3 million jobs. Meanwhile, cap, cut and balance will eliminate 700k jobs this year alone. Why does the GOP hate jobs?
The stimulus actually made us lose jobs. At least 1 million. http://townhall.com/tipsheet/katiepavlich/2011/05/17/stimulus_killed_1_million_jobs
Already debunked: here; http://krugman.blogs.nytimes.com/2011/05/18/stupid-stimulus-tricks/ Another: http://www.cepr.net/index.php/blogs/cepr-blog/the-stimulus-did-not-create-jobs-the-35496th- try And another: http://noahpinionblog.blogspot.com/2011/05/did-stimulus-really-destroy-million.html Here's the real story: http://www.usatoday.com/money/economy/2010-08-30-stimulus30_CV_N.htm
All Obama has created in debt. You can't borrow your way to prosperity. Every so called job that was created destroyed even more jobs.
True, and you can't massively cut your way to it either. Your approach is that when you get sick, the best recourse to reducing medical bills is to cut off your arm so there's less of you to treat. What we do know is that if Congress simply does nothing over the next 3 years, the budget will be balanced in less than a decade.
#33. To: go65 (#29)
Your analogy is horse shit. Here is a better one. When you keep going out to eat and buying new cars and houses on credit. If you don't pay you end up bankrupt and homeless.
Top • Page Up • Full Thread • Page Down • Bottom/Latest“This nation is on a course where if we don’t do something about it, get … fiscal policy (under control), we’re Greece.”
#3. To: go65 (#1)
(Edited)
Our debt/deficit to GDP ratios are nowhere near Greece's.
#4. To: jwpegler (#3)
(Edited)
Greece is clamping down. The U.S. is still spending.
#5. To: go65 (#4)
And not only is our spending relative to GDP is falling...
#6. To: jwpegler (#5)
#7. To: go65 (#6)
(Edited)
Remember just yesterday I showed you data showing that spending relative to GDP had fallen from 25% to 24.1% this year?
#9. To: jwpegler (#7)
The only reason that it might be slightly less than 25% in 2011 is that the GOP Congress has put the breaks on Obama's big spending plans.
Government spending as a percentage of GDP has escalated from 19% of GDP to 25% today.
#11. To: go65 (#9)
actually the fall is mostly due to the end of the stimulus
#15. To: jwpegler (#11)
And if the GOP wasn't there the Democrats would be cranking up another do- nothing stimulus.
#19. To: go65 (#15)
#25. To: A K A Stone (#19)
http://townhall.com/tipsheet/katiepavlich/2011/05/17/stimulus_killed_1_million_jobs
To tease any effect of the stimulus out of these interstate differences, if it's possible at all, would require very careful and scrupulous statistical work -- and we'd like to see some elaborate robustness checks before buying into any results thereby found.
The latest anti-stimulus paper shows no sign of that kind of care. It makes no effort to control for the differential effects of bubble and bust. It uses odd variables on both the left and the right side of its equations. The instruments -- variables used to correct for possible two-way causation -- are weak and dubious. Dean Baker suspects data-mining, with reason; the best interpretation is that the authors tried something that happened to give the results they wanted, then stopped looking.
Really, this isn't the sort of thing worth wasting time over
With an exercise like this, you always have to worry about the problem of cherry picking. It is very easy to run 1000 regressions in an hour. Inevitably, you find 4 or 5 of these 1000 that show you almost anything. (Our standard of significance is a result that you would not get by random chance more than 10 times in a hundred. This means that if you ran 1000 regressions of things that had nothing to do with each other, you would expect 100 of them to have statistically significant results.)
For this reason, you usually want to run your regressions a variety of different ways to show that the results do not depend on some arbitrary specification. It doesn't look like they have done this, or at least they did not show much evidence of such robustness tests in their paper.
Their results depend on pulling out four private sector industry groups (lumped together) and measuring the stimulus against trend job growth in these industries. Even for these four industry groups , most of the results are only marginally significant. It is clear from their tables that if they took all private sector jobs, their results would be insignificant. So, how did they decide on lumping these four industry groups together? It certainly is not a standard break out. It does raise a suspicion that they ran many different regressions and then discovered that they got the results they wanted with these four industries lumped together.
There are many other peculiar items here.
But, given the lack of any statistically significant findings, this paper does not deliver the results that it advertised. Conley and Dupor's abstract should read "We find no evidence for a significant effect of the ARRA on job creation." That would be scientifically honest, but would not turn a lot of heads. Instead, the abstract makes the more politically incendiary claim that the ARRA destroyed jobs, which the authors actually did not find
But to estimate the answers to such questions, economists rely on models based on historical relationships between various policies and real-world results. Earlier this month, Zandi and co-author Alan Blinder, former vice chairman of the Federal Reserve, released the most detailed assessment of the government's efforts to combat the so-called Great Recession. Neither economist is regarded as a partisan firebrand. Zandi, for example, backed John McCain in the 2008 presidential campaign and has advised members of both parties.
Their conclusion: The fiscal stimulus created 2.7 million jobs and added $460 billion to gross domestic product. Unemployment would be 11% today if the stimulus hadn't been passed and 16.5% if neither the fiscal stimulus nor the banks' rescue had been enacted, according to Zandi and Blinder. "It's pretty hard to deny that it had a measurable impact," Zandi said.
#27. To: go65 (#25)
#29. To: A K A Stone (#27)
You can't borrow your way to prosperity.
Replies to Comment # 29. True, and you can't massively cut your way to it either. Your approach is that when you get sick, the best recourse to reducing medical bills is to cut off your arm so there's less of you to treat.
End Trace Mode for Comment # 29.
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