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Brooks Wilson's Economics Blog: Portents of Things to Come?

Tuesday, October 19, 2010

Portents of Things to Come?

(HT Drudge Report)  Two articles highlight financial problems in France and Greece.  I believe that they illustrate how difficult it is for a government to cut government spending.  Given the size of our deficits and the growing unfunded entitlements, I fear that the United States is headed for similar social conflict.  From France, some protesters are not concerned with the consequences of mounting deficits (“French strikers, marchers defy Sarkozy on pensions.”)
PARIS (Reuters) - Striking public sector workers disrupted travel across France on Tuesday and sporadic violence flared at protest marches as opponents of President Nicolas Sarkozy's pension reform made a last-ditch attempt to stop it.

Refinery workers, airport staff, train drivers, teachers, postal workers and guards who supply cash machines went on strike and students set off rowdy protests in a day of action against plans to raise the minimum retirement age to 62 from 60.

At least a million protesters demonstrated in cities across France in the biggest and most persistent challenge to economic reforms anywhere in Europe, where governments are struggling to curb budget deficits and reduce debt mountains.

"To hell with the national debt. We'll give them nothing and we don't give a damn about their AAA!" read one protest sign, referring to the AAA credit rating the government says could be at risk unless it gets its pension shortfall under control.
From Greece, budget cuts are also protested (“Riot police, protesters clash at Acropolis.”)
Greece is in the midst of a tough austerity program which has cut public workers' salaries and trimmed pensions in an effort to pull the country out of a severe debt crisis. The austerity plan has led to a series of strikes and demonstrations as workers' unions protest the cutbacks.

Guards and workers at archaeological sites have long been complaining they are owed months of back pay, and they have shut down the Acropolis before in protest, though usually only for a few hours at a time.


  1. Travis corley2/11/10 4:32 PM

    Travis Corley says...
    Making the same decision in the united states might be worse due to the fact that our economy is as big if not bigger than France and Greece. It would be Difficult for americans to take a pay cut at our rate of standard living

  2. Alejandra Olivas5/11/10 10:06 PM

    It does sound scary how America may end up like France and Greece because such a big economy. May not be enough money to go around but America has a system that may help the economy stay in place and not go overboard or decrease. It is the equilibrium price where the the demand and the supply equal the same.

  3. Ilse Rojano6/11/10 1:49 PM

    I agree with Travis that cutting pay in the United States economy is a bad idea. The standard of living in the U.S. is much higher than it is in France and Greece. Therefore, those two European countries may be able to cope with a reduction of salaries better than the U.S. can. In additon, it may be a good solution to their economic crisis.