Basically, it ties into years of complete mismanagement from Greek leadership, the nation lying about its debt, the global collapse of 2008/2009, the nation spending way too much money without making up for it in tax revenue, massive austerity cuts and a whole lot of greed.
And that’s a very basic summary of what’s gone on in the European nation.
Well, 2016 Presidential candidate Bobby Jindal decided he would take Greece’s continued unraveling and try to twist it around into some sort of ridiculous political attack against Hillary Clinton and Bernie Sanders.
If you want a peek into our future with Hillary Clinton or Bernie Sanders, then look at what’s happening in Greece today. Greece gave us democracy, and now they’re showing us how to kill a democracy.
Naturally, that’s the sort of rhetoric that feeds right into the hands of conservatives who are often driven by talking points and “what sounds good” rather than facts.
One of the biggest problems with Greece isn’t just that their spending got out of control (it did) but that they didn’t offset that spending with tax revenue. They essentially tried to play both sides of this. They wanted to avoid raising taxes, while increasing spending for social programs to help the poor and middle class.
Tax evasion has apparently also been a big issue in Greece, with many residents (especially the rich) exploiting loopholes to avoid paying their share of taxes.
The bottom line is there’s no one thing to blame for any of this. Greece invested far too much into its social programs without any way to pay for anything that they were doing; the resistance to both raising taxes and closing loopholes made their problems even worse.
When it was all said and done, we know what their solution was: Austerity
Massive cuts were made to public wages, social programs, health services and public pensions. These were cuts that were so deep, some economic analysts estimated they caused the economy to contract by as much as 25 percent.
Greece’s minimum monthly wage was cut by 22% in 2012, from 751 euros to 586 euros. A similar cut in the U.S. would drop the hourly minimum wage from $7.25 to $5.66.
In 2009 and 2010 Greece implemented a variety of cuts to salaries for public sector workers that worked out to an average pay cut of about 15%. In the U.S. that would decrease the average government employee’s pay from $51,340 per year to $43,639, using 2012 figures.
Pension cuts have been an especially controversial pain point in Greece, and the combined cuts have lead to a 40% decrease in pension funding since 2009, according to the Associated Press. A similar drop in Social Security payouts in the U.S. would mean the average senior citizen’s monthly would mean a drop in Social Security payouts from $1,294 per month on average to $776 per month.
Greece’s national health budget has been slashed by about 40% since 2008, according to the New York Times. Using U.S. health spending figures from 2013, that would drop federal, state and local government spending on health care from $1.25 trillion ($3,980 per person) to $725 billion ($2,388 per person).
In 2010 Greece increased the tax on cigarettes by about 20 percent. That would increase the tax on a pack of cigarettes in New York from $6.86 to $7.89.
Now you’re telling me that on the heels of one of the worst economic collapses in nearly a century, the United States would have bounced back the way it has following those drastic cuts?
The reality is, the issues in Greece have only gotten worse since these cuts went into effect. That would seem to indicate that austerity made things worse, not better.
But the real idiocy of Jindal trying to use the problems in Greece to slam Clinton and Sanders is that his state’s economy, due to deep cuts and his refusal to raise taxes, has been an absolute mess under his leadership.
As my colleague Manny Schewitz (a Louisiana resident) recently pointed out:
In sum, Jindal made Louisiana the test site for an experiment in socially conservative, pro-corporate governance that wound up wrecking the state so badly it can’t be ignored. After inheriting a $1 billion budget surplus, Jindal has taken Louisiana to a $1.6 billion deficit. The state is broke enough that conservative legislators are rebelling against his slavish adherence to the anti-tax pledge he made to Grover Norquist.
And Louisiana isn’t the only state. Recently, Kansas has become the latest example of a Republican-led state that torpedoed its economy thanks to spending cuts and tax breaks. While I’ll agree it’s important to spend wisely, massive spending cuts that mostly hurt the poor and middle class only make the problem worse. It makes absolutely no sense to say your “answer” to fix a fractured economy is built on the backs of those who have the least.
For example, Minnesota’s governor raised taxes on the rich and increased the minimum wage – then went on to see his state’s economy become one of the best in the country. Oh, California raised taxes as well, resulting in a record budget surplus.
And what do Clinton and Sanders both support? Raising taxes on the rich and raising the minimum wage.
So, while Bobby Jindal tried to use Greece’s problems to slam both Hillary Clinton and Bernie Sanders, all he really did was highlight the fact that the European nation tried many of the same austerity measures which Republicans have supported for years. These are policies which are similar to what he’s done in his own state, and just like in Louisiana and Kansas, all those cuts ultimately did was make the economy even worse.