Over the past few days Greece and Spain have experienced increased levels of protests and rioting over continued “austerity” in government spending. The Associated Press is reporting that thousands have taken to the streets in anger over their government’s attempted solutions to the budgetary crisis.
But what is it exactly that these people are angry about? We are told that through the use of eloquent propaganda sensationalism that there have been severe cuts in government spending. But as in any society that has been constructed to rely on the government at every turn, cuts of this magnitude are nearly impossible to achieve politically or socially. Veronique de Rugy of the Mercatus Center showed several months ago, that such cuts were non-existent. (Note: the chart does not show numbers adjusted for inflation, but still the cuts have been minimal at best). This is the obvious danger of a socialist society. Once the spending is there and people plan their lives around that fact, it is impossible to pull back without stirring up widespread angst.
Further angering these protesters are the proposed stringent measures of the European Central Bank’s (ECB’s) bailout. Protesters hope that their actions will help to cut the strings attached, and that a new bailout of the Greek government will essentially come free of charge as other members of the Eurozone attempt to save the integrity of the monetary coalition.
However, as the saying goes, “there is no such thing as a free lunch.” Someone is going to have to pay for this spending. Those lucky people are the Germans, who lived much more within their means and acted prudently to avert a crisis. As these bailouts continue, the burden of excessive debt and government spending is continuing to fall on those least responsible for the crisis.
Lastly, it is believed that these measures will help to “save the euro”. That it will somehow resolve the issues that the currency is facing. In fact, the opposite is the case. As the ECB creates more and more money to pay for these deals, the currency is systematically being destroyed though inflation. Rather, these measures are merely trying to “save the Eurozone”– run by central banksters and benefited by the politically well-connected.
Successful central banking and fiat currency is an economic myth that became prevalent no more than 100 years ago. The two biggest currencies in the world are on the brink of disaster. Might it be time to examine the history of and question the credibility of central banking?
To learn more about the Euro crisis, I suggest reading Philipp Bagus’ book Tragedy of the Euro. Its quick, entertaining, educational, and (best of all) free!