Over the weekend, Greek citizens went to the polls in order to decide if they would adhere to the austerity rules proscribed by outside groups like the International Monetary Fund and the European Union when their government was given a bailout to prevent bankruptcy.
The Daily Signal produced a video to explain the crisis and the vote:
Now that the vote has passed, Greece’s future is unclear. Will they disconnect from the Euro? Will other financially unstable countries like Portugal and Italy follow? If so, it’s not good news for your 401(k).
What Greek citizens have done is representative of the outlook of Western society in 2015. Greeks wanted an elaborate and, at times, utterly ridiculously generous welfare state, but had no desire or intention to pay for it. When the bill came due, instead of paring down spending, they asked for a bailout from more responsible countries like Germany. When that bill came due, they took a vote to dine and dash in which few Greek citizens even bothered to participate (only 1/3 of those eligible to vote actually did so).
The Greek future isn’t bright. It’s filled with more economic depression, international isolation (from their European brethren especially), and banks unable to cash the equivalent of a $100 check.
Several American states with untenable pension obligations like New York, New Jersey and California should pay close attention to the goings on in Greece this week. They are staring into their own futures if spending expectations aren’t brought into the realm of reality soon.
Comment below: Are you worried about the Greek financial crisis affecting your family?