Liz Cheney Perpetuates Greek ‘Bailout’ Myth, Says U.S. Should Adopt Greek-Like Austerity Measures

Conservatives have responded to the massive economic crisis in Greece — which is spreading to the rest of Europe — by trying to score political points against President Obama’s domestic economic policies. This morning on Fox News Sunday, host Chris Wallace and Liz Cheney pushed the myth that the United States was “bailing out” Greece, and Cheney even suggested that America adopt Greek-like austerity measures to counter the budget deficit:

CHENEY: When you look at the question over whether the US tax payer ought to be contributing to bailing out Greece, I think you also got to say wait a second at the same time that we are looking to put $7 billion to bail out Greece… we’ve got the same types of policies being put in place here in the United States that frankly are much more likely to lead us down the path that we see Greece on.

Mara Liasson pushed back, noting that the notion that the U.S. was bailing out Greece was nothing more than a great conservative “talking point.” Watch it:

The U.S. — along with many other countries– is a contributor to the International Monetary Fund, which serves as a lender of last resort to countries in crisis in order to prevent these crises from spreading worldwide. By Cheney’s standard every Administration in the last 60 years since the IMF was created, including the Nixon, Reagan, and Bush administrations, have “bailed out” countries.

Cheney’s suggestion that the United States adopt the kind of “austerity” measures being enacted in Greece, moreover, would lead to absolute economic catastrophe. Greece is expected to experience massive economic contraction and if the U.S. were to follow that approach, it would fall back into a deep recession.

Still, Cheney contends that America’s deficits will lead to a Greek-like tragedy. But as Marshal Auerback notes, the problem isn’t Greece’s debt per say but its inability to service that debt, because it both doesn’t control its currency (the Euro) and because its economy is contracting. The United States is in no danger of defaulting — the American economy is growing and due to fears over the Euro, investors are boosting the value of the dollar.

In fact, what the crisis has actually shown is the failure of conservative approaches to economic crises. Contrary to most conceptions, Germany’s leadership has long adopted a conservative approach to the crisis, resisting economic stimulus or providing economic support to other European countries. As a result, the crisis has gotten worse and now threatens to spread to other Southern European countries, putting the Euro currency and the entire global economy at risk. German Chancellor Angela Merkel has finally awoken to the danger and has now belatedly agreed to a massive bailout for Greece – one that is considerably larger than what would have been needed if she acted sooner.

But conservatives in America are still holding on to their failed economic dogma. As Dave Weigel notes, “Greece is the new France” meaning that “Greece is now the nation whose name Republicans invoke to make the case against Democratic policies.”