A decade ago, Spain was a basket case. It had built up massive debt, and it was falling into a Depression. Today, Greece is in a similar situation, although the details are different.
A good part (certainly not most) of the travails of both countries can be traced the stupidity of the Green environmental agenda.
In Spain, it was the lure of profits from Carbon Credits which led to their difficulty. There was supposed to be an efficiently running market for these Carbon Credits, and Spain hoped to generate tons of these credits which could be worth Billions!
To encourage private companies in Spain to build these plants, the government adopted Feed In Tariffs and other subsidies. Under Feed In Tariffs, electric companies were required to pay a minimum price for any electricity produced outside of their companies and Fed In to their power grid.
The price was set high enough so that the very expensive renewable energy electricity could produce profits for the generators. Yes, the Carbon Credits generated were an order of magnitude greater than the planners had hoped, but so were the Billions in subsidies which it cost Spain.
Alas, the Exchange which came into being did in fact efficiently price those Carbon Credits, but to the horror of the leaders in Spain – and elsewhere – the value which the Free Market eventually assigned to those Credits was – ZERO.
Spain had mis-allocated Billions into Green energy and had lost. But, worse than lost, Spain still had massive debt and high cost electricity power plants hobbling its Economy.
“Stupid is as Stupid does.”
In Greece, the lure was ultra low cost grant and loan money, which was available from Green countries like Germany. Greece built – overbuilt – solar and other renewable power facilities, from which it generated not only electricity, but also Billion of Euros of debt.
Greece, like Spain, had hoped for a bonanza from the Carbon Credits that would come its way from the Green Power plants. Also, as in Spain, Greece has zero value in Carbon Credits but does have the remaining Billions of debt and the green plants producing ultra expensive electricity
Aside from the financial contagion which surely will reach the US, there is the larger lesson – for those who care to learn from history. The US is going – has been going for a generation – down the same path as Greece and Spain. The US government stupidly, under Obama and Bush before him, is making laws and providing subsidies for Green Energy.
The US government is trying to outlaw fossil fuels – coal, oil, and natural gas – while subsidizing the much more costly Green sources. It does not count Hydro as renewable (amazing!), and it is slowing down or preventing (uranium and thorium) nuclear projects.
Technologies and private investment into non-Green energy are thwarted – such as the Keystone pipeline (also involving corruption and Warren Buffet, but that’s a story for another day), fracking, and horizontal drilling.
The causes of these stupid policies lie both with domestic (traitors and useful idiots) and with powerful enemies in other countries and cultures. (Again, stories for another series of days.)
One likely result of these Green and other Socialistic policies in the US will be the elimination of the American Middle Class. The window of opportunity to elect sane people into office to turn the situation around, most likely, has closed. But, vote for anti-socialist, free market candidates anyway. When we get to the other side of our coming calamity, they can help us rebuild.