Why the Greek Bailout Stinks on Ice

I’ll be the first to admit, I’m not a global economist. Even discounting the fact that being a blogger makes me an expert on all sorts of ill shit I know nothing aboot, the way the global economy is tied together…I get that if Greece goes down it’s bad for all of us. Outside of that, I rely on smarter people to say what’s what.

What I do understand is that, with the bailouts, eventually you have to say no more. The auto bailout was what first got be blogging. To me, it made no sense to bail out the auto companies when you knew three months later they were just going to be looking for more money. If we keep bailing everyone one, eventually we run out of money…which will kinda suck when it’s time for the United States to be bailed out.

So to give an idea as to why so many of us think the Greek bailout stinks on ice, I give you the Mighty George F. Will…

In the commercial, Whitacre says GM has “repaid our government loan in full.” Rep. Paul Ryan (R-Wis.) noted that GM used government funds to pay back the government: It “simply transferred $6.7 billion from one taxpayer-funded TARP account to another.” The government still owns 60.8 percent of GM’s common equity, and the Congressional Budget Office projects that the government will lose about $34 billion of the $82 billion of TARP funds disbursed to the automotive industry.

When Ryan and two colleagues asked the Treasury Department for clarification, they got this careful reply: “Treasury has never suggested that the loan repayment represented a full return of all government assistance.” A Treasury news release did say “GM Repays Treasury Loan in Full.” The loan is, however, a small part of taxpayer exposure. Under crony capitalism, when government and corporate America merge, both dissemble.

Now American taxpayers also own a little bit of a small nation. They provide the U.S. contribution of 17 percent of the assets of the International Monetary Fund, which is giving Greece $39 billion (the IMF also is contributing $321 billion to a “stabilization” fund for other eurozone nations with debt problems). So the U.S. government, which would borrow 42 cents of every dollar it spends under the president’s 2011 budget, is borrowing to rescue Greece and others from the consequences of their borrowing.

Give the whole column a read. George Will is one of the smarter people I rely on.


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