Print this article
What’s Bill doing in Cyprus?
We’ll get to that. First, what happened in the markets? On Friday, the Dow rose 267 points. Gold went up too – by $23.
A big move to the upside. And why? No apparent reason. Gaddafi bit the dust, almost literally. And the Europeans seemed to be stumbling to yet another solution… in which they borrow more money to help fund the troubles created by borrowing money in the past.
Nothing new, in other words.
Your editor brought his wife here to Cyprus on a weekend get-a-way. Besides, he wanted to see where Solon died. Whether or not Solon, the great Greek lawgiver, died in Cyprus or not is a matter of some dispute. And what he was doing here is unknown. But Herodotus says his body was ‘consumed in Cyprian fire’. So this is the place he must have gone back to ash.
Solon was in charge of Athens in the second part of the 7th century BC. Then, as now, the people had gotten themselves into a jam. They owed too much money. The burden of debt was so great that the economy was apparently being crushed by it.
But Solon was no dope.
“The Athenians were in the habit of disguising the unpleasant aspects of things, giving them endearing and charitable names,” wrote Plutarch. “They refer to whores as mistresses, taxes as contributions, garrison cities as guards and the common jail as a residence.”
So, according to Aristotle, Solon figured the thing to do was to organise a “shaking off of burdens”. Solon “made a cancelation of debts, both private and public… they shook off the weight lying on them.”
The problem with today’s Solons is that they do not shake off the weight lying on the public. They add to it. The problem in Europe is government debt. But every government in the EU continues to go further and further into debt.
And next week – on Halloween – the US is supposed to pass the point where it has national debt greater than 100% of its GDP. And at the present pace, each year’s deficit adds about another $1.5 trillion.
If we are really following in the footsteps of Japan – as we think we are – we’ll see the feds double their debt over the next seven to ten years.
Receive Bill Bonners free Daily email 'The Daily Reckoning' straight to your inbox
But wait. Japan has an advantage. It has no military expenses of any consequence. The US has them up the kazoo. The cost of its wars and foreign meddling is more than $1 trillion a year. It cost a million a year just to maintain one soldier in Afghanistan. These expenses could be cut without much pain or suffering in the US itself.
But empires don’t back up. Certainly, the Greek empire didn’t. After Solon sorted out their debt problems, they were soon back in the empire business and back in debt. That’s why much of the history of Cyprus is the story of one Greek misadventure after another. Sometimes the Athenians were fighting the Persians and the Phoenicians. Sometimes they were fighting other Greeks. Sometimes they were fighting the Cyprians. Sometimes they were fighting alongside the Cyprians. Like the Americans, they had troops all over the place making enemies wherever they went.
A stele was discovered that recorded the names of the Athenians of the Erechtheid tribe who fell in the years 459-458.
“Of the Erechtheid tribe, these are they who died in war, in Cyprus, in Egypt, in Halieis, in Aegina, at Megara…” Inscribed are the names of 177 soldiers.
Athens didn’t back up. It kept going until it had gone too far. In 431 BC, Pericles gave the kind of speech that Mitt Romney just gave at the Citadel. (No presidential candidate can talk openly about managing the process of decline….that would be political suicide.)
Pericles praised his forefathers for their efforts: "They dwelt in the country without break in the succession from generation to generation, and handed it down free to the present time… And if our remote ancestors deserve praise, much more do our own fathers, who added to their inheritance the empire which we now possess, and spared no pains to be able to leave their acquisitions to the present generation…. You may reflect that it was by courage, sense of duty and a keen feeling of honor in action that men were enabled to win all this…"
Then, he vowed to stay the course: "You cannot decline the burdens of empire and still expect to share its honours."
He should have backed up. Under his guidance, Athens continued to make war on just about everyone until the Spartans invaded it, laid waste to the city and enslaved its people. Pericles died of plague.
Don’t expect the US to back up either.
Threatened with budget cuts, Defense Secretary Leon Panetta reacted not with thoughtful reflection, but with Greek-like lunacy. As to the budget cuts, he called them a “doomsday mechanism.” They would be ‘catastrophic.’ We would be “shooting ourselves in the head,” he went on.
These would be the effects, said he, of spending only as much as the whole rest of the world put together.
Of the people who propose to put on the brakes, they are like the Nazis at Bastogne, asking Brigadier General McAuliffe to surrender. “Nuts,” he replied.
Spending cuts are intolerable… so is any talk of “decline” or backing up. The armed zombies who run the defense industry won’t permit it.
• Don't miss Bill's next Daily Reckoning. To receive the next article straight into your inbox as soon as he's written it,
sign up to the email list here .
Published in
Global economy
| More
articles
by
Bill Bonner
Related articles
-
By Bill Bonner, May 25, 2012
-
By Bill Bonner, May 24, 2012
-
By Bill Bonner, May 22, 2012
-
By Bill Bonner, May 21, 2012
FREE - MoneyWeek's daily investment email
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.