America Must Learn from Greece Insolvency Damage

Washington, D.C. –  Today, Congressman Mo Brooks (AL-05) again called on Washington to balance the budget before America’s debt spirals out of control.  In an address to the U.S. House, Rep. Brooks highlighted the debilitating economic turmoil that is afflicting Greece, and possibly awaits America, because of decades of financially irresponsible leadership.

Brooks stated, “In the past five years, Greece has repeatedly failed to meet its debt obligations and subsisted on three bailouts from the European Union.  The result?  Greece’s economy is in shambles. The Greek government has limited the right of Greek citizens to withdraw their own money held in Greek banks.  Violent demonstrations have ensued as pensions have been cut, taxes increased, and citizens struggle with paying back debts incurred during unsustainable spending sprees.”

Brooks continued, “There is an old adage that ignorance is bliss.  I don’t know about that.  But I do know that ignorance is dangerous.  In 2009, Greece spent 3.2% of GDP on its national defense.  Five years later, Greek defense spending was cut to 2.3% of GDP, a 28% cut!  Now, perhaps the world will not suffer from Greece defense spending cuts, but what would be the effect on world peace if America’s defense spending suffered a similar fate?  Washington must learn from the insolvency consequences Greek citizens are now facing and recognize that if America does not quickly change its course, we will suffer a similar fate.”

Mo Brooks Floor Speech: America Must Learn from Greece Insolvency Damage

Mr. Speaker, nonpartisan Congressional Budget Office data reveals that America’s financial condition has taken a sharp, ugly turn for the worse.  America’s estimated 2016 deficit is $105 billion worse than 2015’s already dangerous $439 billion deficit! [1]

America’s debt has blown through the $19 trillion mark and is projected to blow through the $29 trillion debt mark in a decade![2]  America’s Comptroller General and CBO warn that America’s financial path is [quote] “unsustainable”[3] [end quote] . . . meaning America faces a debilitating insolvency unless we get our financial house in order.  Mr. Speaker, those who do not learn from history are doomed to repeat it. 

In that vein, America must learn from Greece, a country betrayed by decades of financially irresponsible leadership.  In the past five years, Greece has repeatedly failed to meet its debt obligations and subsisted on three bailouts from the European Union.[4]  The result?

The Greek economy is in a shambles.  Greece has a 52% labor participation rate[5] . . . ten points worse than here in America.[6]  Greece’s unemployment rate was recently 25%[7], approximating America’s worst unemployment rate in the Great Depression.[8]  Worse yet, Greeks under the age of 25 suffer from a 48% unemployment rate![9]

Financial irresponsibility ultimately forces draconian austerity spending cuts.  Greece has cut public health care spending from 6.8 percent of GDP in 2010 to roughly 5 percent today, thereby risking Greek lives.[10]  Cancer screening has been cut.[11]  HIV, tuberculosis, and malaria rates have surged as fewer Greeks receive proper treatment.[12]  The public pensions Greek elderly citizens rely on for survival have been cut an average of almost 50% since 2010,[13] and are again on the chopping block.[14]  Greek tax rates are exploding. Income taxes on farmers have doubled, from 13 to 26 percent.[15] 

Self-employed professionals and farmers say proposed social security and income tax increases will combine to consume as much as 75% of their incomes!”[16] Greece’s banking system is on the brink.  In the Summer of 2015, pre-European bailout, the Greek government froze citizen bank accounts, limiting cash withdrawals from ATMs to $67 per day.[17]  Greeks could not even access their own money!

Post-bailout, and as Greeks began fearing their savings accounts would be confiscated to pay for government debt as occurred in nearby Cyprus[18] (yet another insolvent country), Greeks withdrew cash from banks.  The run on banks caused the Greek government to intervene and limit the right of Greek citizens to withdraw their own money,[19] which caused citizens to cut deposits into Greek banks, which undermined the Greek banking system, which dried up the availability of loans for new business needed to create jobs and a rebounding economy.[20]

Violent demonstrations are resulting.  For example, on February 4, 2016, Athens, Greece ABC News reported: 

“Riot police have used tear gas in clashes with protesters during a mass rally in Athens as Greeks demonstrated against government pension reforms needed to meet demands of international creditors.”[21]

Mr. Speaker, there is an old adage that ignorance is bliss.  I don’t know about that.  But I do know that ignorance is dangerous.  In 2009, Greece spent 3.2% of GDP on its national defense.  Five years later, Greek defense spending was cut to 2.3% of GDP,[22] a 28% cut!  Now, perhaps the world will not suffer from Greek defense spending cuts, but what would be the effect on world peace if America’s defense spending suffered a similar fate?

Mr. Speaker, time is running out.  Washington must balance the budget before America’s debt burden spirals out of control . . . before it is too late to prevent the debilitating insolvency and bankruptcy that awaits us.  I pray the American people will be good stewards of our Republic in 2016 and elect Washington officials who both understand the threat posed by deficits and debt and have the backbone to fix it.  Quite frankly Mr. Speaker, America’s future depends on it!

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