Eurogroup President Jean-Claude Juncker said in an interview over the weekend that the austerity measures being imposed on Greece in exchange for additional bail-out funding from the IMF will result in “the sovereignty of Greece [being] massively limited. ” He added, “One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the euro zone.”
Although the average Greek citizen has no interest whatsoever in such austerity measures being imposed on him by outsiders (recent polls show 80 percent opposed), the socialist-controlled parliament, headed by President George Papandreou of the Panhellenic Socialist Movement, has agreed to accept such intervention in order to obtain funds sufficient for the country to avoid default, at least for the time being. Those measures include higher taxes and much tighter enforcement of tax collection measures, as well as selling off major publicly owned properties in order to raise $8 billion by the end of the year.
After weeks of negotiations between Democrat Governor Mark Dayton and the Republican-dominated legislature, no resolution to Minnesota’s $5 billion budget shortfall was reached and, except for some essential services, the Minnesota state government shut down at midnight, June 30. Governor Dayton maintained that he had done all that he could to meet the Republicans halfway, but he was determined that higher taxes on wealthy citizens was the only way to close the budget gap. He said, “They [the Republicans] don’t want to raise revenues on anyone, and I believe the wealthiest Minnesotans can afford to pay more taxes.” According to Phil Krinkle, president of the Taxpayers League of Minnesota, the wealthiest Minnesotans are already carrying a disproportionate share of the burden with the top 2 percent of earners paying 30 percent of the state’s income taxes.
The State of Washington is a Democrat stronghold. It has been decades since Democrats have lost a senatorial or gubernatorial race. Washington is also blessed with abundant natural beauty, excellent harbors, and an agreeable (if rather wet) climate. There are plenty of reasons why a company suc has Boeing would want to operate in Washington. But there are also plenty of reasons why Boeing and other aeronautical companies might want to operate in other places.
Wichita, for example, was long the center of small aircraft production in America. Houston and Cape Canaveral in Florida were seen, as early as Jules Verne's day, as the best locations for a moon shot. Most air traffic controllers are trained in Oklahoma City. The Wright Brothers, though from Ohio, chose the Carolinas for the first manned flight. The location of enterprise is the logical consequence of a balancing of different interests. Cities, for example, often gain donations for high culture (like symphony orchestras) by touting how this will attract business.
If the current debt ceiling negotiations fail in time to avoid the drop-dead default date of August 2, liberal law professor Garrett Epps has the answer for President Obama: Ignore the ceiling and keep on spending.
He even has a speech for the President ready to go:
My fellow Americans, I am speaking to you tonight to let you know the steps I have taken to ensure that America lives up to its obligations during the current political crisis….
Unwilling to be intimidated by the often-violent mass protests of radicals, Greek lawmakers passed yesterday the second and final austerity bill that was essential in order for the country to receive crucial bailout funds to prevent the government from defaulting by mid-July.
The second austerity measure passed the Greek Parliament by a vote of 155 to 136, just one day after the main austerity bill was approved. During the vote yesterday, rioters clashed with police just outside Parliament.
It’s a sad commentary on the state of affairs in Washington that the only occasions on which the United States Constitution is invoked with any reverence by the political establishment is when it appears to support the expansion of federal power. The topic du jour in the capital is the 14th Amendment, and whether it authorizes President Obama, in effect, to ignore the congressionally-imposed debt ceiling and instruct the Treasury to issue new debt to pay for old. For the record, the 14th Amendment’s Section Four states:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Nearly one million union workers in the United Kingdom have begun a strike to protest the government’s austerity plans. The protest is the first of the “summer of discontent” and is sure to cause major disruptions at airports and schools.
Mark Serwotka, leader of the Public and Commercial Services Union, warned of the strike, “On Thursday we will see hundreds of thousands of civil and public servants on strike. We fully expect to be joined by millions more in the autumn.”
The Blaze reported:
The first test comes Thursday, when 750,000 public-sector workers — from teachers to driving examiners to customs officials — walk out for the day, part of a growing wave of opposition to the Conservative-led government’s deficit-cutting regime of tax hikes, benefit curbs and spending cuts.
President Obama’s former Chief of Staff Rahm Emanuel once said, “Never let a good crisis go to waste.” Some wonder if that is what is taking place in Michigan. A new state law, Public Act 4, signed earlier this year, grants much wider powers to emergency financial managers (EFMs) who are assigned to fiscally troubled cities and school districts. Though the measure has drawn the criticism of political analysts as well as interest groups, proponents say it will prove to be beneficial to struggling cities, as drastic times call for drastic measures. While the law provides EFMs increased authority, the EFM program was not established under the new law. The Blaze explains:
The authority for the EFM program was established by Michigan’s Public Act 72 that was signed into law by Democratic Gov. Jim Blanchard in 1990. If the state determined that a serious financial problem existed in a municipality or school district, Public Act 72 granted the governor’s office authority to intervene in local government administration as a last resort means of shoring up budget deficits. But as the state’s budget problems only continued to grow, it became clear that while well-intentioned, the EFM would not have the necessary tools to be successful.
The June 20th report of the International Monetary Fund (IMF) to the United States strongly recommended that the debt ceiling be raised because “if the debt ceiling is not raised soon…[it] would have significant global repercussions, given the central role of U. S. Treasury bonds in world markets. ” In announcing the report, John Lipsky, acting managing director for the IMF, said:
We’re confident that the participants are well aware of the potential risks of a debt default in the U. S. and will avoid those dangers. It should be self-evident [that] a debt default by the U. S. government debt market would have very serious, far-reaching, dramatic repercussions and that’s why we’re confident that it will be avoided.
The United States is hardly the only country whose teachers who have formed unions and then threatened to hold children hostage. In the United Kingdom, the National Union of Teachers (whose acronym has not been lost on comedians) has joined with another group, the Association of Teachers and Lecturers, to institute partial or total shutdowns on Thursday of 5,000 schools in England and Wales — in protest over changes to their retirement fund.
As many as 300,000 teachers could be involved, and hundreds of schools have yet to decide whether or not to participate in the strike.