Tag Archives: Bailout

How well is the Tspiras-Syriza “austerity is over” plan working out for Greece?

Greece debt repayment schedule
Greece debt repayment schedule

First, let’s recall what the socialist leader Tsipras said after he was elected to save nearly bankrupt Greece.

Look how the radically leftist UK Guardian gushed when Tsipras took office:

In a dramatic start to his tenure in office, Greece’s new prime minister, Alexis Tsipras, has begun unpicking the deeply unpopular austerity policies underpinning the debt-stricken country’s bailout programme.

[…]“We won’t get into a mutually destructive clash, but we will not continue a policy of subjection,” said Tsipras, who at 40 is Greece’s youngest postwar leader.

[…]Earlier, the energy minister, Panagiotis Lafazanis, called a halt to the privatisation programme that the EU and IMF have demanded in exchange for the €240bn in aid keeping Greece afloat. Plans to sell off the country’s dominant power corporation, PPC, were to be frozen with immediate effect. “We will immediately stop any privatisation of PPC,” said the politician, who heads Syriza’s militant Left Platform. A proposed scheme to privatise the port of Pireaus, the country’s largest docks, were also put on hold.

Yes, only nasty conservatives like me think that private industry is cheaper, more efficient and less corrupt than big government for handling big projects.


After that, ministers announced more measures: the scrapping of fees for prescriptions and hospital visits, the restoration of collective work agreements, the rehiring of workers laid off in the public sector, the granting of citizenship to migrant children born and raised in Greece. On his first day in office – barely 48 hours after storming to power – Tsipras got to work. The biting austerity his Syriza party had fought so long to annul now belonged to the past, and this was the beginning not of a new chapter but a book for the country long on the frontline of the euro crisis.

“A new era has begun, a government of national salvation has arrived,” he declared as cameras rolled and the cabinet session began. “We will continue with our plan. We don’t have the right to disappoint our voters.”

If Athens’s troika of creditors at the EU, ECB and IMF were in any doubt that Syriza meant business it was crushingly dispelled on Wednesday . With lightning speed, Europe’s first hard-left government moved to dismantle the punishing policies Athens has been forced to enact in return for emergency aid.

Measures that had pushed Greeks on to the streets – and pushed the country into its worst slump on record – were consigned to the dustbin of history, just as the leftists had promised.

Yes, everything is going to be sunshine and roses, because a 40-year-old know-nothing with no experience says it will be. Economics? That dismal science belongs in the dustbin of history. We can unilaterally reverse the policies our creditors demanded, and then they will of course keep lending us money anyway.

Another leftist UK Guardian article has more happy rhetoric and socialist policies:

Dismantling the EU-IMF mandated measures that had plunged Greece into poverty and despair would, declared Panos Skourletis, the labour minister, be his single greatest priority.

“The reinstatement of the minimum wage to €751 (£560) [a month] will be among the government’s first bills,” Skourletis announced on Antenna TV.

Under international stewardship, Athens had been forced to pare back the minimum wage to under €500, ostensibly to increase competitiveness and make the labour market more attractive. Skourletis, formerly Syriza’s hard-nosed spokesman, said plans were similarly under way to bring back collective work agreements – a major demand of unions – and to annul the enforced mobilisation of workers protesting against cuts.

Everything is awesome! Well, those two articles were from January 2015. Let’s see what’s happening now.

Everything is awesome! Lets have fun!
Everything is awesome! Lets have fun!

This is from UK Telegraph:

Greece’s “war cabinet” has resolved to defy the European creditor powers after a nine-hour meeting on Sunday, ensuring a crescendo of brinkmanship as the increasingly bitter fight comes to a head this month.

Premier Alexis Tsipras and the leading figures of his Syriza movement agreed to defend their “red lines” on pensions and collective bargaining and prepare for battle whatever the consequences, deeming the olive-branch policy of recent weeks to have reached a dead end.

“We have agreed on a tougher strategy to stop making compromises. We were unified and we have a spring our step once again,” said one participant.

The Syriza government knows that this an extremely high-risk strategy. The Greek treasury is already empty and emergency funds seized from local authorities and state entities will soon run out.

Greece’s mayors warned over the weekend that they would not release any more funds to the central government. The Greek finance ministry must pay the International Monetary Fund €750m (£544m) on Tuesday, the first of an escalating set of deadlines running into August.

“We have enough money to pay the IMF this week but not enough to get through to the end of the month. We all know that,” said one minister, speaking to The Telegraph immediately after the emotional conclave.

If there’s one thing that makes me feel better about all the crap that is happening in this world, it’s the wonderful truth that eventually, bad economics meets with reality. You can imagine anything you want today that makes you feel good, and imagine that it will all be paid for somehow in the future. I really like it when people who don’t have any money make these elaborate future plans and then bet their futures on it. Because when reality comes, we all find out that there is justice in the world after all. There is no path to prosperity that involves doing whatever you want and being happy all the time – that is a myth that children have about life. Anyway, pass me the popcorn and let’s see how the Peter Pan plans of these inexperienced children work out. We won’t have to wait long. Mmm, this popcorn tastes schadenfreudelicious.

What we voted for: new Obamacare taxes coming in 2014

The New York Post reports.


The cost of President Obama’s massive health-care law will hit Americans in 2014 as new taxes pile up on their insurance premiums and on their income-tax bills.

Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.

But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”

The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.

The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.

There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.

Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.

[…]Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.

Those with high out-of-pocket medical expenses also will get smaller income-tax deductions.

Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

Then there’s the new Medicare tax.

Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax. They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.

Right now, Obama is furiously trying to re-write the law by arbitrary executive decisions. But all this does is remove the amount of money being paid into the system, while keeping the amount being spent the same. What will be the end result of a massive shortfall in funding for Obamacare? As Byron York argues, the end result of will be that the Democrats bail out health care insurance companies to keep them from going bankrupt.


COLBY: What do you think about these bailouts of insurance companies, as well? Could that happen?

YORK: It absolutely will happen –

COLBY: Will happen?!

YORK: As a matter of fact, it’s written into the law. There’s something called “risk corridors,” which basically ensure that if an insurance company ends up paying a lot more in benefits than it takes in in premiums, then the federal government will bail it out — it will make it good. And it looks like we are entering a situation — certainly in the first month of January — where the insurance companies will be in that situation. And they’e not going to take the losses. It will be the taxpayer who makes up for those losses.

Do you think that raising the debt from $8.5 trillion to $17 trillion was irresponsible? Then wait until the government has to bail out all their left-wing cronies in the health insurance industry.

One thing is for sure – the Republicans will be running on Obamacare in 2014:

New Hampshire:


This money that is being wasted due to socialist incompetence doesn’t come from government workers or politicians – they don’t earn any money of their own. The money comes from government borrowing from your children. Honestly, I if I had children, I might be tempted to leave this country, especially if I wanted to have lots of them. This really isn’t the place for a big family any more.

Food stamp president: nearly 16 million more people getting food stamps since Obama’s election

From CNS News.


 Since taking office in 2009, food stamp rolls under President Barack Obama have risen to more than 47 million people in America, exceeding the population of Spain.

“Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity,” said Obama during his first joint session address to Congress on Feb. 24, 2009.

Since then, the number of participants enrolled in food stamps, known as the Supplemental Assistance Nutrition Program (SNAP), has risen substantially.

When Obama entered office in January 2009 there were 31,939,110 Americans receiving food stamps.  As of November 2012—the most recent data available—there were 47,692,896Americans enrolled, an increase of 49.3 percent.

Not only are we borrowing trillions of dollars to pay for all these handouts, but being dependent on government is not good for people.

Arthur Brooks explains in the Wall Street Journal.


Earned success means defining your future as you see fit and achieving that success on the basis of merit and hard work. It allows you to measure your life’s “profit” however you want, be it in money, making beautiful music, or helping people learn English. Earned success is at the root of American exceptionalism.

The link between earned success and life satisfaction is well established by researchers. The University of Chicago’s General Social Survey, for example, reveals that people who say they feel “very successful” or “completely successful” in their work lives are twice as likely to say they are very happy than people who feel “somewhat successful.” It doesn’t matter if they earn more or less income; the differences persist.

The opposite of earned success is “learned helplessness,” a term coined by Martin Seligman, the eminent psychologist at the University of Pennsylvania. It refers to what happens if rewards and punishments are not tied to merit: People simply give up and stop trying to succeed.

During experiments, Mr. Seligman observed that when people realized they were powerless to influence their circumstances, they would become depressed and had difficulty performing even ordinary tasks. In an interview in the New York Times, Mr. Seligman said: “We found that even when good things occurred that weren’t earned, like nickels coming out of slot machines, it did not increase people’s well-being. It produced helplessness. People gave up and became passive.”

Learned helplessness was what my wife and I observed then, and still do today, in social-democratic Spain. The recession, rigid labor markets, and excessive welfare spending have pushed unemployment to 24.4%, with youth joblessness over 50%. Nearly half of adults under 35 live with their parents. Unable to earn their success, Spaniards fight to keep unearned government benefits.

Meanwhile, their collective happiness—already relatively low—has withered. According to the nonprofit World Values Survey, 20% of Spaniards said they were “very happy” about their lives in 1981. This fell to 14% by 2007, even before the economic downturn.

If we really cared about people, we would give incentives to job creators (“the rich”) to create jobs for them. Earned success makes people happy.

How much did taxpayers lose in Obama’s GM bailout?

Investors Business Daily does the math on the GM bailout.


Sale of the U.S. government’s stake in General Motors Corp. ends a sorry saga. Not only were Americans lied to about the costs, but the bailout underscores why replacing market forces with federal bailouts doesn’t work.

The Obama administration says it will unload 200 million shares — or about 40% of its holdings — back to GM right away. The rest, 300 million shares, are to be sold by March 2014.

[…]Well, GM on Wednesday said it will buy back the 200 million share government stake for $5.5 billion, or $27.50 a share.

The break-even point on the government’s total holdings was $53 a share. But now, with $20.9 billion in taxpayer funds left to pay off from 300 million shares, the break-even point has risen to $69.72 a share.

In other words, at current prices, taxpayers are sitting with a loss of 61%, or nearly $15 billion, on their investment.

So where did the money go, then?

According to a study last summer by the Heritage Foundation, the $80 billion auto bailout gave the UAW and its members nearly $27 billion due to the fact that GM couldn’t shed its outrageously expensive labor contracts, something it could have done in a normal bankruptcy.

As such, Obama didn’t bail out the auto industry; he bailed out the unions. Without the unions’ added costs, taxpayers would have owed nothing.

It’s not hard to see how this happened. The UAW and its affiliates give tens of millions of dollars each election cycle, almost entirely to Democrats.

This union influence explains why Obama’s auto czars, Steve Rattner and Ron Bloom, arranged a government bankruptcy for GM that flew in the face of hundreds of years of bankruptcy law and violated investor rights.

Bondholders took huge losses, while unions got a big chunk of ownership in GM stock that they weren’t legally entitled to.

In a shocking display of favoritism and blatant unfairness, GM’s union workers kept their pensions, while nonunion workers at GM spin-off Delphi lost theirs.

Those unions paid Obama back by working hard to get him re-elected. That’s how socialism works.