Reaganism is a Failure from Greece to Washington, D.C.

Thom plus logo We are witnessing the failure of an ideology on a global scale.

As the Greek debt crisis moves into its most explosive phase yet, many people here in America are asking themselves, “Why?”

“How did tiny little Greece,” they wonder, “become the focal point of one of the biggest crises in Europe since the fall of the Berlin Wall? And why, after 5 years of bailouts, is that country still on the verge of economic collapse?”

Well, the answer to these questions is actually pretty simple: austerity.

In exchange for rescue packages to help it pay its debts, the European Union, International Monetary Fund, and the European Central Bank – “the troika” -- have forced Greece to slash spending, cut social services, and the idea was that these cuts would make Greece more “competitive,” grow the economy, and therefore help the government raise enough money to pay its debts on its own without help from Europe.

That was the idea at least. In reality, the exact opposite has happened.

Since the troika austerity measures began in 2010, the Greek economy has shrunk by a quarter, unemployment has skyrocketed to 25 percent, and because most of the money it’s been lent has gone straight back to the banksters, Greece is still more than $271 billion in debt.

But that’s just the tip of the iceberg. Over that same 5 year period, real wages in Greece have decreased by 22 percent, youth unemployment has risen as high as 60 percent, child poverty has shot up to 40.5 percent, and cuts to the national health service have increased infant mortality by 40 percent and doubled the HIV infection rate.

And, if all that wasn't bad enough, malaria has made a return after years of staying under control and suicide rates have skyrocketed.

Oh, and a quarter of million businesses failed between 2008 and 2013.

Whatever way you look at it, austerity has been a complete and utter disaster, and Greece’s Syriza-led government is completely justified in opposing more cuts, even if doing so might force Greece to abandon the Euro.

When it comes down to it, austerity is an ideology, plain and simple, an ideology that is so out of touch with economic reality that it’s more like a fundamentalist religion than a coherent fiscal policy.

No country in the history of the world has ever cut its way to prosperity, and no country --- certainly not Greece -- ever will.

Which is exactly why the House of Republican fiscal year 2016 budget is so scary. Dubbed “A Balanced Budget for a Stronger America,” this budget proposal is just an updated version of Paul Ryan’s so-called “Path to Prosperity” plan.

And like the Ryan plan, it would gut Medicaid, privatize Medicare, and repeal Obamacare. It would also slash food stamps, Pell Grants, and transportation funding.

In total, the Republicans’ new budget calls for almost $5.5 trillion dollars in cuts, all without raising a cent of taxes.

Sound familiar?

It should, because this is austerity in everything but name. What Republicans want to do America is the exact thing the EU has been doing to Greece for the past 5 years. And just as EU austerity has devastated the Greek economy, so too would Republican austerity devastate the American economy.

According to the Economics Policy Institute, “the House GOP budget cuts would reduce GDP by 1 percent in [2016] and decrease payrolls by 1.3 million jobs… in [2017] GDP would be reduced by almost 2.5 percent with payrolls decreasing by 2.9 million jobs.”

Shocking, but certainly not surprising. That’s because the House Republican budget is cut from the same failed ideological cloth as the EU’s campaign to bleed Greece dry. Austerity has never worked and never will work, and the economic crisis that’s brewing right now across the Atlantic is a direct result of the failure on the part of European leaders to realize that.

Let’s just hope that our leaders here in America see the light about austerity before we go the way of Greece.


Kend's picture
Kend 8 years 50 weeks ago

OR. They spent way beyond their means and no one will lend them any more money. Would you? The simple problem with socialism is sooner or later you run out of other people's money. Look closer to home. Detroit for example. It is great to be a Bernie Sanders, everything for everybody but don't forget someone has to pay for it. Zise Kai Mathe

LightShifter's picture
LightShifter 8 years 50 weeks ago

The problem is that there is not enough income coming in from the rich corporateers who are making virtually ALL of the money. You must not have seen Thom's exposure of how little the corporations pay and yet, they still get "subsidies" for Big Oil etc?

If we were using the tax rates that were in place when Eisenhower or even Ronald Reagan was President, we'd have plenty to INVEST in our infrastructure and alternative energy. Also, we have over 800 military bases around the worls and a ridiculously huge military budget that is extremely wasteful. Transfer some of that money into infrastructure and alternative energy as well.

It's NOT extravagence that's the problem. it's the cheapness of corporations to pay their fair share that We The People end up having to pay for. Welfare for the rich corporateers. THAT is the problem.

And lastly, Wall Street investors are also getting away with HUGE Tax reductions at We The People's direct expense. Their tax rates are much lower so We The Majority also end up picking up their tax tab. Tax them on their income just like I proposed for rich corporateers.

LightShifter's picture
LightShifter 8 years 50 weeks ago

A video explanation of what I just discussed above:

RLTOWNSLEY's picture
RLTOWNSLEY 8 years 50 weeks ago

The BRICS will eventually give the economic Right in this country and Europe a reason to scream "Uncle" ! The reaction from a majority of the population of Greece will soon be repeated by other E.U. member countries who are facing a similar level of austerity and bankruptcy, The oligarchs have ignored recent historical changes in the planet's economic structure and they will soon finally meet their match as the masses see the blood in the water and demand their economic rights and freedoms !

Cheerful Clips's picture
Cheerful Clips 8 years 50 weeks ago

The Bible and Christian theology clearly tell us to Work Hard and Play By The Rules / Lower Taxes Less Spending. So, in America where Holy Scripture is the key to the Persuit of Happiness the rich people are the good people and so the rich people are the Children of The Lord that get the money. The rest of the people are simply bad people, with bad children, bad relatives and bad families who are always looking to have better roads, better bridges, better schools, better affordable health care, fair and just courts, policemen who protect and serve, government that gets good stuff done, clean water, fresh air, healthy things to eat, safe transportation, post office mail service, nature parks, fun puppy dogs, bike paths, clean sand at the beach, blueberries to eat once in a while. If you read your Bible and pray to the Lord you will understand that all the stuff the bad people want costs money. The good people have all the money, God wants it that way. It is the Will of God. In God We Trust. Love God. Love your own family. Love your rich friends. Rich people are the good people. Rich Corporations are good people too. That is how God wants it. His Will Be Done. Amen. Halalula. Praise the Lord. Be a good person and get rich so you can go to Heaven. You will get to watch all the poor bad people be tormented with all their little poor babies in Hell for eternity. Holy Scripture is clear about that. So, don't ask for stuff, just be a good person and get rich. Everything's gonna be alright. Stay Tuned.

KCRuger's picture
KCRuger 8 years 50 weeks ago

@Kend: Governments are not businesses and don't need to be run as such. The mistake Greece made was joining the EU & getting bullied without the ability to print or control its own currency. Germany would never dream of doing any of the things it's telling Greece to do; it hasn't even paid Greece back for WWII debt.

Detroit happened once; NY almost makes it twice. It is extremely rare; muni's are as close to risk-free investments as there will ever be. There is plenty of money in America; the problem is the wrong people are being taxed; the ones whose disposable income has been crippled for 35 years by the guru's you obviously subscribe to.

Ocean Pete's picture
Ocean Pete 8 years 50 weeks ago

Should follow What's the Matter with Kansas?: How Conservatives Won the Heart of America and read Tom Frank's bit on Greece, as is right on.

KayakPete Oceanographer/Paleoclimatologist

2950-10K's picture
2950-10K 8 years 50 weeks ago

Kend says... "The simple problem with socialism is sooner or later you run out of other people's money."

The problem with free-market capitalism is that the few steal/loot what the many have earned and are owed.......thus sooner or later the resultant extreme concentration of wealth creates third world conditions which sooner or later leads to violent revolution.

Instant-RunOff-... 8 years 50 weeks ago

I see the Troika Bankster criminals insisted that the brilliant economist & Greek Minister of Finance, Yanis Varoufakis, resign because they just despised the fact that he destroyed every argument the EU plutocrats had to justify their sleazy efforts to subjugate the Greek people. Yanis, not just brilliant, but unlike almost all economists, he isn't a corporate or bankster stooge. In the economics profession, if you don't kiss bankster ass you are not likely to find lucrative employment.

Yanis also advocated something the Banksters utterly despise, an alternative parallel currency in Greece. Banksters insist on ONLY their debt-money, globalist currency, which they have an iron grip upon, be allowed. So Greek citizens are starving, with massive unemployment, due to a chronic shortage of the bankster debt currency. Only private Banksters get to create money out of thin air, issued as a debt, at an unbelievable profit and power to themselves. The greatest case of welfare in all of human history.

Ellen Brown on 50 ways to leave the Euro:


1. The Open Marriage: Return to the Drachma Without Abandoning the Euro

James Skinner, former chairman of the New Economics Foundation (NEF) in the UK, suggests that the Greek government could start issuing drachmas without abandoning the euro. Drachmas could be reserved for domestic use - to pay the government's budget, hire workers, build infrastructure and expand social services. He writes:

Greece is suffering from a lack of money because the only source, the single currency, has dried up. But there is no law that states that there has to be only one currency.


By enabling the Government, monitored by the Central Bank, to spend newly created money directly into the economy, bypassing the banking sector, the burden of increasing national debt can be avoided....

This programme for creating a new Greek Drachma, bypassing the private banking sector, could start tomorrow. Its immediate effect would be to get the unemployed back to work. All existing Euro transactions can continue as before, quite separately from the new currency. The two currencies can perfectly well co-exist and run alongside each other.... Foreign banks will continue to deal in Euros and other currencies as usual.

There is plenty of precedent for this. When Argentina's currency collapsed in 2001, the government walked away from its debts and started issuing its own Argentine pesos. Provincial governments paid their employees with paper receipts called "debt-canceling bonds," which were in currency units equivalent to the Argentine peso. Three years after a record default on a debt of more than $100 billion, the country was well on the road to recovery. The economy grew by 8 percent for two consecutive years. Exports increased, the currency was stable, investors were returning and unemployment had eased...."

Willie W's picture
Willie W 8 years 50 weeks ago

Money has to circulate to drive an economy. And yes. The rich are running out of other peoples money to take. That's why they have their sights set on our social programs. Still lots of money to be had. It's our money and we want to keep it. It doesn't belong to them.

chuckle8's picture
chuckle8 8 years 50 weeks ago

Instant runoff -- Very impressive.

What are the chances that anyone will listen to Yanis' idea of a parallel currency?

Mark J. Saulys's picture
Mark J. Saulys 8 years 50 weeks ago

Have a nice day.

Mark J. Saulys's picture
Mark J. Saulys 8 years 50 weeks ago

Cheerful Clips, the Bible says no such things. Are you sure you aren't some oligarch - or oligarch's lackey - trying to create God in your own image?

Mark J. Saulys's picture
Mark J. Saulys 8 years 49 weeks ago

Kend, as usual, disingenuous and facile on so many levels. One thing about your Thatcher platitude is that it willfully and dishonestly - and with willful dishonesty - conflate socialism with the welfare state. The latter is a socialist cop out, an inadequate compromise with capitalism, a half way measure resulting, like all half way measures, not in the best of both worlds but the worst, not both socialism and capitalism but neither.
Socialism is not the welfare state but the workers' state.
Detroit was built around the auto industry so when it was made easier for manufacturing to off shore Detroit became a ghost town. It's a stark example of the results of policies facilitating the practice.
The Greek situation is much more nuanced than the Republican talking points you repeat would have it. Goldmann-Sachs' clever flim flam - exacerbated by austerity measures - is mainly what's behind it.
You are not doing a good job of pushing "supply side" economics. No shiller's fee for you today - but you're a volunteer in that field protecting your own investment, from what you say.

trueblue313's picture
trueblue313 8 years 49 weeks ago

It wasnt socialism that caused the massive loss of jobs in 2008, or the loss of peoples home values, it wasnt socialism that destroyed peoples 401k's, or pensions or futures. It wasnt socialism that destroyed Detroit, it was UN-regulated capitalism that DID.


It was PUBLIC money that bailed out PRIVATE companies and criminal banks.

So lets correct good old Maggie posthumously.........

"The problem with capitalism is that you eventually run out of other peoples money!"

Thatcher was an idiot, and it appears that you are too!

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