U. S. to Europe: We Will Trade You Illinois for Greece

A Win-Win Solution to Fiscal Problems Rears Its Head

The Dismal Political Economist, along with just about every other writer and publication on Earth has written extensively about the dire financial situation in Greece, and the inability of the European Community or the IMF to make things better.  In fact, an argument can be made that they have made things worse.

The U. S. has its own fiscal problems, and amongst the various states, Illinois has replaced California, at least temporarily as the basket case of U. S. state governments.  Business Week has nicely documented the problems in the land of Lincoln (who famously had his own fiscal problems with his spouse).

In Illinois, you’re never too big or too small to get stiffed by the man. The strapped state government, awash in debt, is now $4 billion behind in paying its bills. At least 8,000 businesses, charities, and state agencies have been waiting patiently—or not—for the state to scrape together enough money to settle up

and

Illinois is in a deadbeat class by itself. The list of debts has been growing for three years and amounts to more than 10 percent of the state’s general budget for the coming fiscal year.

and

In January, lawmakers approved breathtaking new taxes: a 67 percent increase in the state income tax and a 46 percent hike in the corporate income tax. The estimated $7 billion those taxes raised still weren’t enough to cover the projected $13 billion budget deficit in fiscal 2011.

and

Delayed payments are also affecting hospitals, universities, and public school districts, along with funeral homes that provide burial services for indigent citizens. Eight of the state’s 10 largest nongovernment creditors are health-care or social-service providers whose bills total $176.2 million, according to the Comptroller’s Office. Bills are paid in the order they are received, which for many businesses means a wait of six months or more

Earlier The Dismal Political Economist had proposed that Germany buy Greece in an LBO, that instead of trying to bail out Greece a hostile takeover of the country was the least expensive option.  So far that has not occurred, although things are moving in that direction.

So here is the new deal.  The United States swaps Illinois for Greece, the United States getting Greece which replaces Illinois in the union, and Europe gets Illinois.  Now a lot of naysayers will say this is a bad deal for the U. S. because Greece’s liabilities are much larger than Illinois’s.  But the U. S. would get so much more in return, a beautiful country with wonderful people, a terrific culture and a civilization over 2,000 years old, a gateway to the Mediterranean and that wonderful Greek cuisine.

As far as turning around Greece, there is general agreement that the country’s problems are in large part because of excessive government control and regulation which stifles business.  So the U. S. could send anti-government regulation people like Texas Gov. Rick Perry to run the country.  Mr. Perry has a proven record of job creation and economic growth (albeit in a place where there was alrady job creation and economic growth), and if nothing else it would be interesting to see how he does managing a country that does not have any oil.  Also, it would get Mr. Perry out of this country, surely a huge intangible plus.

In return Europe gets a financial problem that is much smaller than Greece’s.  True, they also get Cairo, Illinois, the Chicago Sanitary and Ship Canal (ouch), Rahm Emanuel, The Blues Brothers (well one of them) and the political heritage that includes a huge amount of former government officials now sitting in jail cells.  But nothing comes free, does it.

Think of the trade as being like the time the Boston Red Sox sent Babe Ruth to the Yankees.  The Yankees got a dynasty and Boston got the Curse of the Bambino.  This would be much the same, except Europe would get the Curse of the Chicago Cubs, a curse surely equal to the value of the curse of having someone like Dominique Strauss-Kahn in a powerful position.

Finally, The Dismal Political Economist wants to know where to go to collect his commission on the deal. Two percent would be fine.