NYT: Greece's Economic Salvation Can Only Come By Privatizing Health Care and Laying Off Thousands Of Unneeded Government Workers

Really?

What makes Greece so damn lucky?

Lucky in the sense that they can benefit from such changes, whereas we in the United States are apparently required to do the precise opposite.

Actually, the NYT isn't endorsing this plan (as the linked analysis at Hot Air suggests); it's just reporting, neutrally, that this is the austerity plan forced on Greece by the IMF, EU, and European Central Banks.

Still: I'm sure the NYT doesn't notice the irony that the program it urges for America is the exact program which must be undone in Greece to keep the country from going bankrupt.

As unions denounced the cost-cutting measures and pledged to take to the streets over the weekend and go on strike on Wednesday, Prime Minister George Papandreou said Greece must quickly adopt the international aid plan. “Today, the top priority is the survival of the nation,” he told Parliament on Friday. “This is the red line.”

...

Greek officials close to the discussions said the deal would include as much as 130 billion euros in aid over the next three years at reasonable interest rates. In return, the I.M.F. asked Greece to cut public sector spending by 8 billion euros in the 14 months after the plan was adopted. Economists called that provision crucial because past reform programs by the government have relied too much on overly optimistic assumptions about the collection of unpaid taxes.

Union and government officials said Greece had also pledged to raise its value-added tax to 25 percent, to freeze civil servants’ wages and to eliminate public sector bonuses amounting to two months’ pay. They said the government intended to increase taxes on fuel, tobacco and alcohol.

Among the most significant features of the plan, a Greek government official said, would be a measure making it easier for the government to lay off some of the many thousands of public sector workers, whose low levels of productivity and high wages are a big contributor to Greece’s debt problem. Until now, the government has not been able to lay off civil servants, whose employment rights are in effect constitutionally guaranteed.

In America, they're not constitutionally guaranteed per se, but they are politically guaranteed -- one party is dedicated singlemindedly to expanding the government workforce and jacking up its already-generous compensation.

Another reform high on the list is removing the state from the marketplace in crucial sectors like health care, transportation and energy and allowing private investment. Economists say that the liberalization of trucking routes — where a trucking license can cost up to $90,000 — and the health care industry would help bring down prices in these areas, which are among the highest in Europe.

Yes, a lot of "raise taxes" stuff in there too, but that's because Greece has gotten so far down the road of guaranteeing a bunch of pricey while avoiding raising the tax rates, preferring to borrow and spend, so that the public is never alerted to the true costs of these programs until it's too late, and the country must accept higher tax rates or go bankrupt.

Sound familiar? Seems to me there's a very cool cat with nice pecs at 1600 Pennsylvania Avenue who has a similar agenda. Hide the costs of your programs in order to get them passed, and then, when it's politically impossible to restrain those costs, tell the country you are sadly forced to raise taxes due to circumstances beyond your control.

Can't happen here? Reason argues it already has happened here, at least in the once-Golden State of California.

California's longterm population-loss trend has reportedly turned around slightly in the last few months, and Greece will no doubt bring in a new haul of tourists this summer, proving the claim that self-satisfied Californians love to make whenever their state is compared unfavorably with Texas: The weather is really nice. And people still haven't managed to screw up the weather.

But every suntan eventually turns into parched, leathery skin. The insidious thing about an unfriendly business climate is that it takes a long time for the effects to show up in the government's inability to pay its bills. So long, in fact, that when the sovereign bankruptcy comes, it's easy to draw the conclusion that tax rates are too low. Both California and Greece are going through a variety of this type of denial right now. But with the governor of California and the prime minister of Greece both promising to turn over a new leaf, this is a good time to remember that you can't take people's money if you prevent them from making money in the first place.

Thanks to Larissa and StarChamberMaid.

posted by Ace at 02:44 PM

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