Greece on the brink.

Greece is a small country with a small economy. That is, compared to Spain or England it is small. But, in many ways, Greece lies at the heart of the financial troubles of Europe. You might say that the chickens are coming home to roost. And it is getting near to impossible to paper over the failure of Social Democracy (Socialism). Greece is the canary in the European Socialist vote mine.

Here is the latest. Simply put: Greece can not pay its bills. In order to stay afloat, Greece must borrow money. But, lenders are willing to lend only if Greece pays a very high interest rate. Greece can not do that, so the Europeans, the IMF and the FED have bough Greece's bonds to paper over the crisis. In return, the lenders demanded "austerity" from Greece - meaning a cut in government spending.

Did it work? We were told that it did. Now we find out that it did not. Greece's economy kept shrinking, so it needs another round of cash infusion and another round of austerity.

Can this be put in place? That is doubtful now. Each plan unfolding has significant opposition. The IMF is out of chits. Creditors view the idea of "restructuring" (i.e. postponing the payments) as a default. And, of course, the Greeks themselves oppose the idea of the creditors interfering in their economy and financial affairs demanded by the plan.

In the end, it will come down to whether the creditors figure the default is preferable to the rescue.

Meanwhile, Portugal and Ireland are marching to this same ending, while Spain and Italy are getting their credit rating lowered.

Back in the US of A we are drifting toward the tipping point. The Dems in the Senate voted down the House-approved budget, assisted by NO votes from five RINOS. O'Bungle's budget got zero votes in the Senate. And the Senate refuses to produce its own budget. The Dem strategy seems to be to preserve current spending by forcing to keep the govt running via continuing resolutions. Democrats are jubilant that they found the formula to regain the House by the Mediscare tactics applied in NY 26. But, the Country can not remain on this course till Jan 2013 when the next Congress is sworn in. The clock is ticking. This will be an interesting Summer.