Inside Opinion

What's on the minds of Tacoma News Tribune editorial writers

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Tag: stock market


Economy starting to show some real signs of life . . . maybe

This editorial will appear in Thursday’s print edition.

Quick, someone. Knock on wood.

While some signs seem to indicate that the nation really might be lumbering out of the Great Recession that economists say technically ended in June 2009, we’re holding our breath, crossing our fingers and, yes, knocking on wood. We won’t believe it until . . . well, we like to think that we’ll know recovery when we see it. And we sure don’t want to jinx it by proclaiming it a done deal.
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Greece: A cautionary tale with a moral for America

This editorial will appear in tomorrow’s print edition.

Deficits matter.

Just ask the Europeans who’ve been forced to bail out spendthrift Greece to protect their own economies. Just ask Americans who are suddenly seeing the Euro-scare drag down the U.S. stock market.

Wednesday’s 2-plus percent hit on U.S. stocks was largely driven by growing anxiety that Greece’s flirtation with catastrophe could spill over into Portugal, Spain, Ireland and perhaps Italy – all countries threatened by a general erosion of confidence. The ripples could hurt banks and investors around the world who have a financial stake in those countries.

Serious, sustained damage seems less likely now that other European countries – after much grumbling by the fiscally prudent Germans – have agreed to offer Greece $144 billion in undeserved credit. Disaster was staring everyone in the face. Greece’s credit rating had been cut to junk status; its bonds were turning toxic, and it was within three weeks of default.

The lesson for America, whose national debt has now exceeded $11 trillion, is that government cannot run up the VISA bill forever. A binge of deficit spending is sometimes necessary in a dire crisis – World War II and the credit panic of late 2008 come to mind – but the binge can’t become business as usual.

That’s precisely what happened in Greece. Under socialist Prime Minister Andreas Papandreou, its government rapidly expanded public spending in the 1980s. Since then, the country has been as indulgent as the old General Motors. Government workers were promised jobs for life; pensions were passed out to people who’d never contributed to the retirement funds; the public sector ballooned.
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