If Greece is AIG, Guess Who's Playing the U.S. Taxpayer?
by: SW Richmond April 30, 2010

If you answered, "We are," then you're absolutely correct! Here's the latest and greatest on the bankers' rape of the US taxpayer.

We're all following the "Greek Tragedy" that is, well, Greece. The Greek state joined the European Union a few years ago, under false pretenses. You see, there are sovereign debt limits imposed by EU membership. In order to meet the requirements for membership, Greece hid some its debt with the aid of an accounting scheme, courtesy of … a big Wall Street bank that will remain unnamed.

Now, Greece has a very generous government which, by the way, is the source of its debt. Funny how that works! Greece is apparently a very nice place to retire, as per this New York Times article:

As a consequence of decades of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees, or 14 percent of its work force, giving it an average retirement age of 61, one of the lowest in Europe.

The law includes dangerous jobs like coal mining and bomb disposal. But it also covers radio and television presenters, who are thought to be at risk from the bacteria on their microphones, and musicians playing wind instruments, who must contend with gastric reflux as they puff and blow.

(In Greece, hairdressing is high-risk work, and a Greek hairdresser can retire at age 50 with full benefits.)

According to research by Jagadeesh Gokhale, an economist at the Cato Institute in Washington, bringing Greece’s pension obligations onto its balance sheet would show that the government’s debt is in reality equal to 875 percent of its gross domestic product.

So as even a Congressman can see (but would never admit), Greece is bankrupt. That means they need a bailout. And so, a bailout they shall have. But where to get the money?

That's where you come in. See, the money is coming from the IMF, which recently raised its international bailout fund from a paltry $50 Billion to a much more fun $550 Billion! And, you might ask, where does the IMF get its money? You guessed it. They get it from you, dear taxpayer! See? This finance stuff is fun. The US "share" of the new higher IMF international bailout fund is $100 Billion.

And what does dear leader have to say about this? According to GreekReporterUSA:

The budget and debt crisis in Greece is “of great concern” to President Barack Obama, White House spokesman Bill Burton said today.
“We’re monitoring it very closely,” Burton told reporters traveling on Air Force One with Obama to a speech in Quincy, Illinois. Treasury officials “are in close contact with folks in Europe about the issue.”

Yeah, we're "monitoring" it like crazy, and we're sending them big bundles of taxpayer cash. We stashed them behind the third column at the Parthenon.

But wait, there's more.

Normally, when someone bails out a bankrupt firm, they get something! Most importantly, they get to be first in line to be paid back! But not this time. You see, contagion is ragin' in the EU, Spain is next (and much much bigger) so we have to act fast. Most of bankrupt Greece's debt is held by … banks. And goodness knows we can't let the banks ever lose a penny, or a farthing, or a pfennig, or whatever a penny is in Euros.

So the Greek bailout deal looks like this:

The package would be in the order of €100-120bn for three years, during which Greece would be taken off the market. (Germany‘s economics minister said that Germany contribution would be €8.4bn each year for three year running, with a risk on the upside. The Germans had apparently thought that the €45bn would be the total size of the package.)

That last one is a barrel of laughs! It means the banks will be repaid before the IMF (read: US taxpayers). It means the banks will be repaid in full on their bad loans, at taxpayer expense. So Greece is being used just like AIG (AIG), as a passthrough, a shell game, a "fraudulent conveyance" to take money from the US taxpayers and give it to the banks.

Someone put a bandaid on me, I'm bleeding to death here!

About the author: SW Richmond
I am a self-employed IT consultant and degreed engineer, a former project engineer for a major Eastern nuclear utility who struck out on his own and hasn’t looked back. I am an independent student of political and economic history. I believe in free men and free markets; politically I am a strict constructionist. I attended the 1995 LVMI Conference on Secession in Charleston, and I count myself as an early supporter of Ron Paul. Significant influences on my thinking can be found in Hayek, vonMises, Ayn Rand, Locke, etc.

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