BY CHRISTOPHER ADAMO – Though relatively few people on Main Street are consumed with anxiety over the unfolding events on Cyprus, a tiny Mediterranean island with a population of barely one million, the chaos there is a grim harbinger of a burgeoning worldwide financial crisis that will ultimately reach U.S.shores. The outlandish nature of Cypriot governmental action is merely a precursor to similar outrages that will inevitably take place here if the congressional spending spree of the past four years is not strenuously curtailed. So far however, Democrats are insisting that no problem exists, and Republicans lack the necessary will to effectively restrain them.
Nevertheless, disturbing rumors of an economic cataclysm in Cyprus warrant legitimate concern, even on this side of the Atlantic. For some time, its government has toyed with the idea of confiscating a percentage of all savings accounts in the country in order to pay its bills and remain solvent. The initial alarm over this possibility had seemingly subsided when the unthinkable happened. On March 25, government officials suddenly seized as much as thirty percent from accounts totaling 100,000 Euros or more.
Although in the wake of this upheaval, life has apparently resumed its normal course throughout the rest of the world, its reverberations are yet to be felt in their entirety. Try to comprehend what has really transpired on Cyprus. Those in power behaved in a manner that is barely distinguishable from a thief who forcibly enters a private residence to clean out the cashbox. Private property was injudiciously appropriated in an exercise of raw governmental power. In essence, the government of Cyprus unilaterally declared the ultimate possession of all property to itself, while the people under its jurisdiction are no longer to be citizens, but subjects.
Throughout this tumultuous affair, little of anything has been done to address the real underlying problem which is the unsustainability of government debt. The Cypriot government, like the rest of the European Union, has been digging itself into a financial hole by spending beyond its means. Of course this worked no better than it ever has throughout history and now the tiny nation faces impending bankruptcy. Sufficiently curtailing expenditures is not considered a feasible option, and in order to secure a “bailout” from the European Union, such drastic action was deemed necessary. The cash was needed, so those in power simply reached for the most available stash of wealth. No considerations of integrity or justice were allowed to interfere with this action. And that should be an end of it.
However, it is only the beginning. Similar measures are being considered in Spain and Italy. Jeroen Dijsselbloem of Holland, the Eurozone Chairman, flippantly advises that such actions could eventually take place across all of Europe. But he and his kind seem completely unable to recognize two crucial facts. First, if a wave of bank account confiscations becomes a credible threat, those with the ability to do so will simply close their accounts. Better to have the nest egg in hand even if it accrues no interest, than to leave it within the grasp of insatiable collectivists. Secondly, the confiscations in Cyprus, drastic though they were, can at best only delay the inevitability of financial collapse unless a complete national change of course is immediately undertaken.
The disastrous events on Cyprus are only a harbinger of an inescapable end game for every government that is allowed to grow so disproportionately. In the beginning, a small number of people are “beneficiaries” of funds collected from a comparatively large taxpayer base. However, if the pattern is not quickly reversed the concept becomes widely accepted by the population. Every attempted socialist panacea will predictably be overwhelmed by expanding numbers of expectant recipients. Hence, from the moment the Cypriot government made the decision to ignore history and pile on unsustainable debt, the radical measures now being undertaken against the accumulated wealth of its people became inevitable.
Americans should be among those most closely watching the unfolding events on Cyprus, as well as the general reaction of the rest of the European Union. For although in the past many of the cultural and social ideologies across the Atlantic differed starkly from those in the American Heartland, the general drift of this country in the same direction portends an exponential increase in our own financial woes. The manner in which annual deficits and the accumulated debt of the United States have ballooned in the past five years alone is great cause for alarm. Borrowed money must eventually be repaid. And just as the liberal governments of the European Union are quickly running out of accounting shell games by which to continue spending beyond their means, America’s economy cannot withstand its multi-trillion dollar annual outlays indefinitely. A grim day of reckoning will dawn, just as surely as it has for the people of Cyprus.
Unfortunately, at a time when competent, principled, and courageous leadership is desperately needed, America finds itself under the authority of Barack Obama, abetted by his Democrat cohorts and enabled by Republican timidity on Capitol Hill. Yet Obama has offhandedly dismissed the looming threat of financial insolvency that will result from the enormous and continuously growing debt. In a March 13 interview with George Stephanopoulos, he flatly declared “We don’t have an immediate crisis in terms of debt” and added “for the next ten years [the debt] is going to be in a sustainable place.”
Since the summer of 2009, America has been incessantly told by liberal politicians and liberal news commentators (as if any delineation exists between the two) that the sunken economy is rebounding. And the rosy stories continue. Nevertheless, the actual condition of the America’s finances remains abysmal, as the nation lingers in the longest economic downturn since the end of World War Two. Amazingly, no effort whatsoever has been made to curtail government expansion, a situation that will worsen considerably during the next few years when the majority of Obamacare’s unfathomable expenses hit. The dire straits in which our nation finds itself are not going to abate on their own. But still no realistic efforts are even being proposed to contend with this looming disaster.
As American productivity continues to falter, revenues to the federal treasury will slow even below their current levels, causing the total debt to spike. It is altogether likely that the “ruling class,” desperate to maintain the status quo, will increasingly look to various sources of amassed money outside of its typical realm. Government seizure of private retirement accounts and even personal savings is not beyond consideration. Our nation no longer possesses the inherent moral resolve to oppose such despicable actions. Consequently, the single biggest firewall that might have protected the people from this nightmarish scenario no longer exists. The unthinkable can happen, even here in America.