The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Crisis in Cyprus – A Prologue for US?

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


No doubt many of you are aware of the financial crisis in Cyprus, a small country in the Mediterranean located near Turkey.  The politicians in Cyprus, in an effort to prevent the country from going into bankruptcy, hatched a plan to seize  – No STEAL – up to ten percent of  the personal bank accounts of its citizens.  Cyprus has very close ties to Greece, one of the PIIGS (Portugal, Italy, Ireland, Greece and Spain) that have huge debts and are the weakest economic sisters in the Eurozone. They have gotten into this mess because their governments overspent on their social programs that rob their treasuries, forcing them to borrow money to pay their bills.  Sound familiar?

But disturbing remarks came from White House spokesman Jay Carney when asked what the U.S. take was on the plan.  Below is his quote, but you can listen to it here (at 50 seconds.)

Q    Thank you.  What’s the U.S. take on this EU plan with Cyprus that would basically call on Cyprus’s government to raid the personal accounts of its citizens?
MR. CARNEY:  Well, I would refer you to the Treasury Department.  We’re obviously monitoring the situation right now.  Our general proposition is that we believe it’s very important for Europe to take steps necessary, as they have been, to both grow and deal with sovereign debt issues.  But as regards this particular situation, I’d refer you to Cyprus -- beyond saying that we’re monitoring it -- I mean, refer you to Treasury beyond saying that we’re monitoring it.

“Take steps necessary?”  That’s the response of the U.S. government to another government stealing private property from its citizens?  I can only imagine what Ronald Reagan would have said and no doubt “stealing” or a similar phrase would be part of his official reaction.  In fact, this is what he said in his famous, “A Time for Choosing Speech,” about an all powerful central government, which is always worth reading again.

"…the full power of [a] centralized government"--this was the very thing the Founding Fathers sought to minimize.  They knew that governments don't control things.  A government can't control the economy without controlling people.  And they know when a government sets out to do that, it must use force and coercion to achieve its purpose. “

The Cyprus politicians are calling it a “one-time tax” and plan to moderate the plan due to the angry reaction from its citizens.  But it is unlikely this will bring much comfort to Cyprus’s or fellow Eurozone citizens.   A Time Magazine column quotes one angry Cyprus citizen.  “’It’s a precedent for all European countries.  Their money in every bank is not safe,’ said lawyer Simos Angelides at an angry protest outside parliament in Cyprus’ capital, Nicosia, where people chanted, ‘Thieves, thieves!’”

I guess the bigger question is – could it happen here in the U.S.?  Keep in mind there are plans circulating out there for the government to take over private IRAs and 401ks, one of which can be found here.  Why?  Because there are trillions of dollars tied up in private retirement accounts that some greedy politicians would love to get their hands on.

So here’s a question only YOU can answer.  What would YOU do if Congress seized 10 percent of your savings?

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