The Future Was Been Sold

... to pay for the present.

Since 2010, the government has raised taxes and slashed pensions and state salaries across the board, in an effort to rein in the bloated public sector that today employs one in five Greeks. Last week, the government announced it would put 30,000 workers on reduced pay as a precursor to possible termination and would cut pensions again for nearly half a million public-sector retirees.

A clerk in her local town hall, Ms. Firigou, like all public-sector workers, took a precipitous pay cut last year — in her case to less than $1,300 a month from $2,000 a month — as the government slashed wages to meet the terms of its foreign lenders. Her husband, who sells used car parts, has seen his commissions drop. Her mother’s pension was cut to about $800 a month from around $920.

Like many families here, the Firigous cushion the impact of such cuts and the rising cost of living with property acquired in the past. Her grandfather built the two-story apartment house in this Athens suburb, Psychiko, where the six now live, starting in the 1930s and finishing it after the Second World War. And so the new tax, probably in excess of $2,000 per year for the Firigous, stings particularly hard. “The house is the only thing we have left,” she said.

Three things jump out at me.

1. The increases in government spending did not buy "infrastructure". If they had, then these families would have seen their real assets increase over this time. If what you buy does not result in increased capital holdings then it isn't "infrastructure", it's just spending.


2. This mirrors what Victor Davis Hanson says about California. Our freeways, dams and major construction projects are decades old. Monster government budgets have not bought anything solid. We're living off the decisions of people 40 years ago.


3. Read this article and then consider the question from a recent Republican presidential debate where a guy with a pre-existing condition asked them if they would cut his benefits. The real answer, the one that will really occur, the one that is occurring in Greece right now is this: Someone's benefits will be cut. If not yours, then whose?