First, here is some perspective. The population of Greece runs a bit more than 11 million Greeks. The population of New York City and the city of Chicago combined run to 11.125 million.
The combined spending of the city councils of New York and Chicago runs to $82.2 billion. The last four quarters of spending by the Greek legislature runs to $45.184 billion.
Spending for each resident for a combined New York and Chicago is $7,388.76. Spending for each Greek comes to $4,092.54.
And now, here is the kicker. While spending per capita for a combined New York and Chicago is 1.81 times spending per capita by the Greek legislature, the GDP of a combined New York and Chicago is 8.12 times bigger than the GDP of Greece.
Compared to a combined New York and Chicago, Greek legislature spending ought to be closer to $909.95 each Greek or $10.037 billion in total. So what does that mean?
Greek legislature spending needs to fall -77.8% for their spending to fall within reasonable ratio to world class cities like New York and Chicago!
As it is, neither city is known as being cities where politicians exercise fiscal restraint.
For even more perspective, there are about as many Czechs living in the Czech Republic and Portuguese living Portugal as there are Greeks living in Greece, 10.538 million and 10.478 million respectively. Yet, Czech legislature spending per capita of $3,188.76 is only 77.9% of that by the Greeks. Portuguese legislature spending per capita of $3,510.49 is only 85.8% of that by the Greeks. Said another way, Greek legislators spend 1.17 times more than Portuguese legislators and 1.28 times more than Czech legislators.
At $242.26 billion, Greece GDP is slightly larger (1.066 times) than Portugal GDP at $227.3 billion and 1.16 times larger Czech Republic GDP at $208.8 billion. However, for Greek spending to get in line with the Portuguese legislature spending relative to Portuguese GDP, Greek legislature spending per capita would need to be cut -8.6% to $3,742.18. To get in line with the Czech legislature spending relative to Czech GDP, Greek legislature spending per capita would need to be cut -9.6% to $3,698.96.
Seriously, the representatives of the IMF have asked the Greek legislature to cut pensions by $2.02 billion and raise taxes by $2.02 billion. The spending cut would drop per capita spending a paltry 4.4% down to $3,913.33 and yet Greek negotiators believe the request is unreasonable!
Should Tsipras and Varoufakis lead Greek legislators to default, Tsipras and Varoufakis will go down in history known forever as Dumb and Dumber. The Greeks will be far poorer in Europe within a decade, much so.
Greeks have been living under a delusion, a delusion of legislators' credit flowing into the economy, which elevated prices and created a phony, unsustainable living standard. The European Financial Stability Facility has kept the charade going since 2008.
For Greeks, prices need to fall at least 220% maybe and that includes wages as wage rates are merely prices. Yet, Tsipras and Varoufakis don't want to let prices fall.
That is what those who side with the Greeks don't get. The Greeks have been living by the largest credit bubble in history of Greeks, albeit a public finance bubble. Tsipras and Varoufakis refuse a controlled-deflation of that bubble.
Printing what would be near-worthless Drachma won't let Greeks buy anything from anyone of the world. With near-worthless Drachma, Greeks will be lucky to buy from other Greeks.
How will Greeks pay for high-end, precision German-made machinery? What will a handful of German factory owners get for all of the Drachma presented to them as payment, 100 years worth of ouzo, 1,000 years worth of belly dances?
How will Greeks pay for oil? How will Greeks pay for natural gas? How will Greeks pay for pharmaceuticals? How will Greeks pay for steel? How will Greeks pay for semiconductors?
Greek law givers overspend relative to their private-sector economy. Their overspending cannot be maintained.
Greeks need to realize they're much poorer than they believe. Spending by Greek law givers needs to get in line more with the Portuguese or the Czechs.
SYRIZA, Tsipras and Varoufakis are the wrong Greeks in power. They are leading Greeks into disaster. What is being asked of Greeks isn't unreasonable, a -4.4% cut in spending that pushes Greeks closer to legislator spending in line with what the economy can sustain.
Those who champion a default by Greek legislators will be on the wrong side of history. Ask the Venezuelans how life is working out for them and their phony banking system's cash.