2012 Election: Final Nail In America's Coffin

The funding of the Greek deficit has now been removed from the private sector as investors clearly see that the country can never pay back its debt.  The country now runs its day to day operations on rolling bail outs provided by the other countries in the European Union (tax payers), the IMF (tax money from countries around the world), and the European Central Bank (printed money).

We are so early into the global sovereign debt crisis that we have not yet seen what would take place if the funding were removed from the very first domino.  Government spending in Greece would have to be slashed to the level in which it could be paid for by the citizens of the country.  Taxes would rise, unemployment would rise, and the cost of living would rise. (If the country were forced to leave the Euro and return to a single currency)

This is what lies ahead for Greece (if they are not bailed out forever), and it will be a terrible time for those that stay.  This is then what lies ahead for Portugal, Ireland, Belgium, Italy, Spain, Japan, the UK, and the United States.  Probably in that order.  These countries spent their future with borrowed money, had an incredible time, and now the bills are due.

What fascinates me today is that Greece, hanging by the thread of a foreign safety net, is still refusing to make drastic spending cuts.  A politician will not cut spending and threaten to take away any form of free money unless someone enters to room, puts a gun to their head, and forces him or her to do it.

With that understanding we can now look ahead at the 2012 American Presidential election.  We know what is coming for the United States (a few years down the road).  But if a Greek politician, in the face of certain disaster will not cut spending, why would an American politician today when our bonds are traded at the lowest rates in history?  When investors are still stupid enough to lend us money?

But, for those out there who like to hold on to the hope, the possibility that the right thing could happen, I present an interview with Ron Paul this morning, discussing what should be done, unfortunately not what will be done.