This week, the Greek Parliament accepted yet another round of austerity measures aimed to keep the nation afloat. These measures, consisting of sharp spending cuts and even sharper tax increases, touched off riots in Athens that resulted in the Ministry of Finance catching fire. Furthermore, it puts the nation in position to receive even more cash from the IMF and from EU, which has already invested 110 billion euros in the country, in an attempt to prevent the country from defaulting.
According to JP Morgan, the financial troubles that Greece is going through resemble the Kubler-Ross model of the five stages of depression: denial, anger, bargaining, depression, and acceptance. By tracing the downfall of Greece from January 2010 to today, you can see how the situation unfolded among members of the European financial community, as well as what could be in store when the five stages resolve themselves in the end. According to this report, the bailout and austerity measures put Greece back a couple of stages, but it might only be delaying the inevitable default.
This model could also be used to track America’s budget problems, which are starting to look more and more Greek in severity and in urgency. Greece may resemble an extreme case of budgeting and government accounting gone wild, but if America continues down its current path, we may not be too far behind.Published in