Are we bailing out Greece?

Well, why not?  We have bailed out almost everyone else.  The federal government now owns two carmakers (Chrysler and GM), an insurance agency (AIG), and just about every mortgage in America through Fannie Mae, Freddie Mac, and FHA.  Frankly, at this point, another few billions for the Greeks seems like chump change, but Mike Pence and Cathy McMorris Rodgers disagree:

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US taxpayers will be helping to foot the bill for the Greek bailout, via the Interna tional Monetary Fund. And if the Obama administration doesn’t draw a clear line, Uncle Sam may soon be on the line for even more and larger European “rescues.”

The Greek government, with its high taxes and profligate spending to support large bureaucracies and social programs, is bankrupt. Its bonds have been downgraded to junk status. …

Concerned that the fiscal damage could spread throughout the EU and the world, other European Union members and the IMF have pledged $145 billion to bail out Greece. And since the United States is the largest contributor to the IMF budget, our government will be funneling billions of American tax dollars to Greece.

No one wants to see Greece fail — the economic stability of Europe is important. But US taxpayers have funded bailout after bailout, and our country faces a debt crisis of its own.

Our unemployment rate stands at nearly 10 percent. The public debt now stands at $9.2 trillion. The Congressional Budget Office predicts that America’s debt held by the public will reach 90 percent of gross domestic product within 10 years under President Obama’s budget. Without dramatic spending restraints, America is on a path like the one that led to Greece’s financial catastrophe.

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The IMF will absorb most of the costs of the Greek bailout, and our share of it comes to around $7 billion.  That may not seem like a lot, considering the size of the bailouts already extended by both the Bush and Obama administrations.  We issued guarantees worth more than 50 times that amount to bail out Freddie and Fanny, and more than 20 times that for AIG.  The Obama administration spent more than 120 times that amount on a Porkulus bill that didn’t move the economic needle at all.

Those are problems for other reasons having to do with changing the fundamental relationship between our government and a free people that doesn’t apply to assisting the Greeks.  We’ve spent money on foreign aid for decades, so that aspect of it is nothing new.  However, it has something in common with all of the other bailouts in that the money doesn’t exist, at least not in any real sense.  The US government doesn’t have the money to pay its own bills without borrowing it from China or other creditors.

In essence, we will borrow money to give to Greece in order to fix the problems they created … by borrowing too much money.  Only in the public sectors does that kind of idea make any sense at all.  On top of that, the US and the EU want Greece to impose badly-needed austerity measures and downsize its public sector as a condition of receiving the money, when in fact the US and the EU need to adopt those measures themselves before giving the money.

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We’re sending fantasy dollars to rescue fantasy euros.  It’s a big Ponzi scheme.  And it seems very likely that we’ll be the suckers left holding the bag at the end of this one.

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