Despite the media circus in Athens lately, little is said about Greece’s exorbitant military spending and the role it played in hastening the country’s insolvency. In an online essay, former congressman (R-TX) Ron Paul draws a parallel between the United States and Greece, arguing that America could face a similar economic collapse if it doesn’t act quickly.
“Much of Greece’s deficit was caused by excessive military spending,” said Dr. Paul. “The Greek crisis provides a look into what awaits us unless we stop overspending on warfare and welfare and restore a sound monetary system.” (Source: Ron Paul Institute, July 12, 2015.)
The United States spends far more on military matters than any other nation.
“Despite all the handwringing over how the phony sequestration cuts have weakened America’s defenses, the United States military budget remains larger than the combined budgets of the world’s next 15 highest spending militaries.”
Dr. Paul also believes that American policymakers should take heed from the Greece’s inability to control its own currency. By joining a monetary union, Greece had subordinated some of its sovereignty to the European Commission and the European Central Bank.
When crisis reached its shores, Greece couldn’t react independently. It couldn’t inflate its own currency or arbitrate its own debt. The country’s only option was for a bailout from their EU partners.
The United States may not be part of a currency union, but Dr. Paul argues the dollar is distorted by its position as the world’s reserve currency.
“China and Russia are already moving away from using the dollar in international transactions,” said the Tea Party favourite. “It is only a matter of time before more countries challenge the dollar’s reserve currency status, and, when this happens, a Greece-style catastrophe may be unavoidable.”