By now, those who have followed what shall end up as the ultimate Greek tragedy, know the results of the purposeless snap referendum called by communist-leaning Greek PM Alexis Tsipras. An estimated 3.288 million Greeks of the 5.358 million who voted, voted to reject paying off €63.58 billion worth of debt Greek law givers borrowed to pay generously, for salaries and pensions of government workers as well as for welfare of Greeks who choose not to work.
With the referendum results, Greeks have said they want their law givers to stiff their creditors after years of excessive borrowing to pay for legislators-conjured make-work and overly generous pensions for every Greek.
In exchange for generous help, Greek law givers had been asked to pay down a mere €6.36 billion a year of debt, which, each year would have been 1.9% of total debt owed and 2.6% of GDP. However, now that communist politicians of SYRIZA have come to power, they don't want to fulfill the debt obligation established by previous Greek law givers.
Varoufakis, the finance minister of Greece, delusively claims that creditors will come crawling to the negotiating table and agree to any terms and conditions offered by Greek law givers now that Greeks have voted no. No sane man or woman would expect that to happen.
Rather, all should expect that European leaders will take their time as there is no reason to rush now. It is hard to believe that Euro zone leaders won't squeeze the Greeks, taking their time over any negotiation going forward. It's likelier they will stand unified against Greeks.
Likely, the far smarter Merkel and others already have bet on a no-vote win in Greece. Tsipras and Varoufakis now sit on the hot seat to present a plan to the Greeks themselves and get that plan underway by Monday.
Tsipras and Varoufakis are ready to run Greeks off a Santorini cliff. If the next stage means an exit from the Euro zone, Greeks will be living on a steady diet of goat's milk, yogurt, feta, fish, olives and ouzo. And they will be living by candle light.
Whether a Greek exit from the Euro happens or not, right now Greeks lack the means to pay for oil or natural gas priced on world markets. Greeks lack the means to pay for pharmaceuticals, engineered machinery, engineered materials and of all kinds, cars and trucks, airplanes and well, mostly everything produced by mankind today.
Even renown economist Costas Azariadis from the Washington University in St. Louis agrees with what I've claimed already, the Greeks must suffer austerity. Should the Greeks find themselves outside the Euro, austerity shall be much greater.
Every election is a referendum, in effect. For decades, Greeks voted yes already on referendums that asked:
Do you want your legislators to borrow excessively so that your legislators can devise make-work government jobs, which will lead to the government work exceeding 50% of GDP in most years and which will let all Greeks live in make-believe as if Greeks are rich and in so doing, eventually, financially cripple the legislature and bring the legislature to near bankruptcy?
The problem for Greeks is the same problem everyone suffers the earth over. Over many years bad legislators have leveraged doling welfare to gain power and keep it. With power, politicians have then created a horrible culture — codified law — of bad design, which unsurprisingly has led them to their final destination of failure.
Greek legislators let their debt grow beyond their ability to service the interest payments. Their poor decisions led to exponential growth of debt.
Per capita spending by Greek legislators is well beyond the size of Greek economy compared to other EU states of alike-sized economies as measured by GDP.
Greeks need massive devaluation of prices. As wages are merely prices, they need massive devaluation of wages. Greeks are much poorer than they want to believe about themselves.
The days of having Greeks living from the credit card of Greek legislators must come to an end. Yet, with the results of the snap referendum, Greeks want to keep the bubble party going.