CNBC carries a Reuters story on the current state of the Greek economic crisis. Its lenders demand Greece enact reforms that would impose additional austerity in that country.
Running for office, austerity is what Prime Minister Tsipras promised to reduce, not increase. He claimed he could get the lenders to back down.
Lenders believe they can force Tsipras to go back on his campaign promises, to some degree. If he does so, he may well lose the next election.
If Tsipras hangs tough, refuses to enact austerity, replacement loans will dry up. Greece will default on its loan payments, lose any remaining credit rating, and perhaps be forced out of the euro zone.
A question Tsipras must be asking himself: Will Greek voters punish him more for claiming to be able to do something that subsequently proved impossible, or for imposing more austerity? My guess - the latter.
If Tsipras hangs tough and fails, he can always blame the lenders for being rapacious jerks. If he caves, he will suffer the fate of Lyndon Johnson or George H. W. Bush, both of whom went back on promises made while campaigning and subsequently were not reelected.
Everybody remembers Bush going back on his "read my lips, no new taxes" pledge, and losing. The MSM lovingly reminds us of GOP goofs.
Fewer remember Johnson, running against Goldwater, painted his opponent as a belligerent warmonger. As soon as he was elected, Johnson then escalated our Viet Nam involvement, effectively doing exactly what he said Goldwater would do. Johnson, of course, decided not to run for reelection as he was likely to lose.
You can draw one of two conclusions. Either Tsipras is one hell of a poker player, running a monumental bluff on the holders of Greek debt. Or Greece is about to leave the euro zone. Pick one.
