Will The US Be Different From Greece?
- Posted by Jeff Carter
- on October 20th, 2011
Watching television this morning we hear the news that Greek protestors still occupy the streets and protests have turned extremely violent. Will it be different in the US?
The Greek government is voting on “austerity measures”. What’s really happening is that the net present value tables combined with no economic growth have caught up to them.
The jig is up.
1. Without economic growth, you cannot have a social safety net.
2. Governments create nothing, and are not productive.
That’s really all you need to know when you refocus and think about what needs to be done for the US economy.
The US has very little time left in the hourglass. Since the inception of a government safety net in the 1930′s (significantly ramped up since 1965), we have had the benefit of demographics. Baby boomers populated the workforce and the economy needed to create stuff for them to live.
Now, the boomers are retiring. They are going to be less productive, and will start to draw on the government resources. Eventually, as they begin to die, they will be a significant drain on medical resources since most of your medical care comes in the last two years of your life.
That’s why things like Obamacare will never work. Socialized medicine isn’t cheap, and it doesn’t have enough production to service all the constituents that need it. What will develop is a competitive black market where only ones with enough money to afford medical care will get it in time. The rest of the poor saps will be stuck in line.
We have had some mini-Grecian events in the US. The occupation of the Wisconsin state capital comes to mind. What were they protesting?
The end of being on the government dole.
Government employees that are unionized are a roadblock to the economic vitality of the United States. They produce nothing. They create headaches. Instead of smoothing the path for entrepreneurs and companies, they litter it with paperwork and regulation. We have to slash the size and scope of the US regulatory juggernaut. It is in the path of economic growth.
The social safety net and job creation are intertwined. Making small adjustments on the edges won’t do a thing. Tackling the legacy programs and costs and reformatting them so the economic interests of government align with the economic interests of the people must be done.
We are in a situation that calls for pretty radical change from the perspective of a socialist. But if you are a capitalist/entrepreneur, the changes we need to make aren’t that big a deal. It’s more like the normal course of daily existence.
The Greeks are on the march. No doubt, their kin in the US, public employee unions and socialists, will hit the streets here. They will make a lot of noise, and create a lot of fear. The reality is we cannot afford them anymore.
Things like that are a legacy of the past, just like buggy whip manufacturers.
tip of the hat to Ace of Spades
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...)
Tags Cloud$15 billion Adam Smith African people API Asia Bachelor of Business Administration Big Food Book Review Capital Gains Taxes Capitulation CPAC Crowdfund Dry Creek Valley AVA Ecosystem Efficient Market Hypothesis Facebook IPO factory farms Family office Food truck Gaza Illegal Aliens IPO Job Growth KitchenAid Maker's Mark Mass (liturgy) Matt Davio Michael Cahill Michael Dell NYMEX offshore Pat Quinn Playboy Pope Private Equity Providence Equity Partners Recreational drug use Saeco Sandberg Series A round Services TechCrunch Uncertainty Wyoming Yankees
Becker Posner Blog
Ben Horowitz Blog
Betting the Business
Black Line Review
Blue Sky Innovation
Both Sides of the Table
Business News Network
Chicago Booth Graduate School of Business
Cooler By The Lake
Daily Economic Release Calendar
Doug Ross @ Journal
Economics of a POW Camp
Foundation for Families
Garden and Gun
George Stigler Institute
Good Beer Hunting
Great Food In Chicago-Steve Dolinsky
Hyde Park Angels
Illinois College of Business
John Taylor's Blog
Legal Issues in Angel Funding
Macroblog-Federal Reserve Bank of Atlanta
Microbrews in Chicago
Mike And G
Milton Friedman Institute
National World War Two Museum
Notes From Underground
Ronald Coase Institute
Senate Banking Committee
The Big Picture
The Clubber Fund
The Daily Crux
The Grumpy Economist
The Jack B Show
The Minimalist Trader
The Musings of The Big Red Car
The Polsky Center
The Streetwise Professor
Tough Love Marketing
US Federal Reserve Bank
US House Financial Services Committee
World War Two Blog