A spectre is haunting Europe ...

[Loren Pechtel]

Spending won't solve the problem because they don't have anything to spend. The only way they can spend like they want to is with the printing press--and that means leaving the Eurozone.

The fundamental cause of the Greek problem is lavish social payments without the taxes to support them. They've maxed out their credit cards and yet think the answer is to spend more without dealing with the income side of the problem.

The sources are rather dodgy but it looks like Greece has already turned to the printing press.

You can't spend money you don't have unless someone enables the borrowing. This is the fundamental problem underlying your fundamental problem.

They think they can still find lenders.

Or they'll use the printing press.

 

[T.G.G. Moogly]

You can't spend money you don't have unless someone enables the borrowing. This is the fundamental problem underlying your fundamental problem.

They think they can still find lenders.

Or they'll use the printing press.

It seems the new Greek government wishes to renegotiate debt repayment so that it is sustainable, which would involve linking it to economic recovery. I personally see nothing wrong with such an arrangement. It seems the best of all worlds.

 

[Loren Pechtel]

They think they can still find lenders.

Or they'll use the printing press.

It seems the new Greek government wishes to renegotiate debt repayment so that it is sustainable, which would involve linking it to economic recovery. I personally see nothing wrong with such an arrangement. It seems the best of all worlds.

The problem is that they want to go on a spending spree they don't have the money for.

 

[T.G.G. Moogly]

It seems the new Greek government wishes to renegotiate debt repayment so that it is sustainable, which would involve linking it to economic recovery. I personally see nothing wrong with such an arrangement. It seems the best of all worlds.

The problem is that they want to go on a spending spree they don't have the money for.

There's a lot of posturing going on right now. Time will tell. Obviously if they do not have the money they cannot spend it.

I think debt repayment linked to economic recovery is damn smart in this arrangement. The lenders get their money and the pain to Greece is considerably lessened. Looks like a win win to me. I'm curious to see how it all ends, especially considering the plight of other heavily indebted and economically depressed Eurozone members.

 

[SimpleDon]

It was a much needed reduction from irresponsible levels of spending that got them into trouble in the first place.
Case in point retirement age. It was 58 while in Germany it is 67. Why should Greeks get to retire earlier than Germans, and why should Germans pay for it?

Almost none liked the austerity imposed on them. (bolded for emphasis)

Imposed by the people bailing them out. If you get into financial trouble and ask your parents for a bailout, you may not like them telling you to cut your spending but they are perfectly right to tell you to trim your budget (especially if you tend to spend more than them of certain things!)

The stupidity of austerity is that it didn't work. It resulted in higher deficits, not lower ones. It resulted in more debt, not less. It is not even hard to see why. The reduced government spending tanked the economy, resulting in lower tax receipts and higher deficits.

The so-called troika that imposed the austerity as a condition of bailing out the Greeks were well into fantasy economics. The IMF and at least partly, the ECB, two of the three members of the troika have backed off of austerity as a solution. It is only the German dominated EC that has stood firmly behind the stupidity that is austerity.

Just like the US it was a center right government that caused the problems originally, not the current government. It is more than a little disingenuous to punish an entire country because of the actions of idiots that are no longer in the government. Especially when the austerity policies are so counter productive.

The retirement age maybe lower than the German's but Greeks work more hours in their lifetimes than the Germans because they work 20% more hours in a year than the Germans.

Austerity is much harsher on the Spanish and the Italians, they didn't have as high of a public debt as the Germans going into the Great Recession that has turned into a depression for them thanks to the austerity imposed on them. They had bought into the entire supply side fantasy of self-regulating financial markets that caused the financial crisis that lead to the depression, the American import that no sane country wants.

The Germans escaped only because their mortgage underwriting standards are written into law that is very hard to change. The German financial markets couldn't play the games that they played in the US and elsewhere in Europe. The problem was that the German money could go to the other countries like Ireland, Italy, Portugal, Greece and Spain where they did deregulate the financial markets and the sales of the Mortgage backed securities. And the Germans felt safe investing in those countries because they are EMU countries and they knew that when push comes to shove the ECB would bail them out, which is what happened and is still happening.

 

[SimpleDon]

Austerity in Greece has been inhumane and immoral. Doesn't matter whether it was a left wing party elected or a right wing party. Almost none liked the austerity imposed on them. (bolded for emphasis)

Its more that if Greece wants loans, that they have to make their creditors feel comfortable. If the Greeks refuse to honor old debts, not very likely that their new investors will trust them for new debt.

No, the confidence fairy will be a long time coming back to Greece.The only way that any bonds will be sold is if the ECB guarantees them. The ECB doesn't have to continue destroying the Greek economy to do that. It actually makes no sense, the Greeks are less able to pay back the bonds with austerity imposed on them destroying their economy.

 

[SimpleDon]

I agree that's Greece's profligate spending was a huge problem and should have been avoided by making people pay the taxes they were supposed to. Yes, raise the retirement age, but at least help people be fed properly and cared for medically.

http://www.independent.co.uk/news/world/europe/tough-austerity-measures-in-greece-leave-nearly-a-million-people-with-no-access-to-healthcare-leading-to-soaring-infant-mortality-hiv-infection-and-suicide-9142274.html

Once again, there really isn't any defense for the profligate spending of the government before the current one. But it makes no sense to punish the country because of the actions of that center right government who believed that taxes are evil and that the financial markets could self-regulate. Much like the beliefs of the center right government in the US who was pretty much responsible for the global crisis that caused all of this.

 

[SimpleDon]

If they thought austerity was bad, just wait until they have no lenders for their debt.

They will have lenders for their debt only if the ECB guarantees that debt. (European Central Bank, if you couldn't work it out.) There is no reason for the ECB to impose austerity on the country to make the economy worse than it already was, to take away the means for the Greeks to pay back the debt, an impossible task at best.

The alternative is for the Greeks to withdraw from the EMU and pay the debt off in drachmas. Or to declare most of the debt null and void like Iceland did.

 

[SimpleDon]

Austerity in Greece has been inhumane and immoral. Doesn't matter whether it was a left wing party elected or a right wing party. Almost none liked the austerity imposed on them. (bolded for emphasis)

Denial, a classic symptom of nations in need of a 12-step program. Here is my solution for the Greeks, attend your first DBA meeting:

Dead Beats Anonymous offers hope for a national people's whose obsession with wallowing in debt causes problems and suffering, not only in their lives but the lives of other nations peoples. Most nations incur debt at various points in their lives, in war or national emergencies, but for some lazy ass debtors it becomes an addictive and unmanageable part of their national life. Debting is more than just the sensationalized gluttonous free lunch spending, it can cripple and ruin your country's life.

For many national people's it is a false crutch that feeds fantasy (retirement at 58?) and magnifies obsession (featherbedding my relations in government jobs). Many debtors are mega billions of dollars in debt to other countries, banks, or international loan providers. These Compulsive national spenders often engage in compulsive handouts of 'free' social benefits and encourage subsequent loafing, or they alternate between overspending and deprivation. Eventually, a country with a compulsive spending and debting problem finds that their national life has become unmanageable.

In D.B.A., our purpose is threefold: to stop incurring debt, to share our experience with those seeking help, and to reach out to other big spender-debtor nations.

*Dead Beat Anonymous is a non-profit organization based on the Twelve-Step principles of Alcoholics Anonymous. Call for a meeting near you.

Once again, it is hard to be charitable toward Greece and especially to the government that ran up the debt. Like our crazy prior government who believed that taxes are "stealing" and should be reduced or collected poorly and that the financial markets could be trusted to regulate themselves they were tragically wrong. But why does it make sense in your mind to force the current government to impose austerity when that policy makes matters worse, when it makes the government less able to pay off the debt?

 

[barbos]

People forgot that the whole thing started with cooking books, why no one is in prison?
Is it because if they go to prison then so must Goldman Sucks people?

Steal $100 - you are a criminal going to prison, steal $100bil - you are just a successful banker.

 

[arkirk]

People forgot that the whole thing started with cooking books, why no one is in prison?
Is it because if they go to prison then so must Goldman Sucks people?

Steal $100 - you are a criminal going to prison, steal $100bil - you are just a successful banker.

How quickly we all forget. Money that is spent should have bought something of value. If it was stolen, then there are thieves who need to face some music. We really should not be thumbing our noses at the Greek people who get hoodwinked just like we do. Their economy is a lot smaller and a lot more brittle and lot less capable of surviving the doubledealing of Goldman Sachs than our big country that takes that and multi trillion dollar presidential war errors in stride...and just keeps on giving ...to the rich.

 

[dismal]

The stupidity of austerity is that it didn't work. It resulted in higher deficits, not lower ones.

You and ksen need to coordinate. He's saying they have a surplus.

 

[barbos]

People forgot that the whole thing started with cooking books, why no one is in prison?
Is it because if they go to prison then so must Goldman Sucks people?

Steal $100 - you are a criminal going to prison, steal $100bil - you are just a successful banker.

How quickly we all forget. Money that is spent should have bought something of value. If it was stolen, then there are thieves who need to face some music. We really should not be thumbing our noses at the Greek people who get hoodwinked just like we do. Their economy is a lot smaller and a lot more brittle and lot less capable of surviving the doubledealing of Goldman Sachs than our big country that takes that and multi trillion dollar presidential war errors in stride...and just keeps on giving ...to the rich.

To be fair, ordinary greeks elected these thieves and took some part in the theft, unknowingly but nevertheless.

 

[dismal]

To be fair, ordinary greeks elected these thieves and took some part in the the theft, unknowingly but nevertheless.

Yes, it seems you can't (or at least shouldn't...) argue on the one hand that government spending is the magickal font from which all economic blessings flow and on the other that the Greeks did not benefit from all the government spending that was done to rack up the debt.

 

[SimpleDon]

The stupidity of austerity is that it didn't work. It resulted in higher deficits, not lower ones.

You and ksen need to coordinate. He's saying they have a surplus.

Which is it then? Has austerity produced a surplus?

 

[dismal]

You and ksen need to coordinate. He's saying they have a surplus.

Which is it then? Has austerity produced a surplus?

It seems like this is the sort of thing one could determine before one spouts one's expert opinion off on the matter in a thread.

 

[SimpleDon]

To be fair, ordinary greeks elected these thieves and took some part in the the theft, unknowingly but nevertheless.

Yes, it seems you can't (or at least shouldn't...) argue on the one hand that government spending is the magickal font from which all economic blessings flow and on the other that the Greeks did not benefit from all the government spending that was done to rack up the debt.

Who is arguing that government spending is a magical font from which all blessings flow or that the Greeks didn't benefit from the deficit spending? Are you trying to make a point or just happy to have presented two sock puppets in a single sentence?

Do you believe that austerity in Greece is a success?

Do you believe that the Greeks have repaid any of their debts?

Two simple questions that are pertinent to the discussion.

- - - Updated - - -

Which is it then? Has austerity produced a surplus?

It seems like this is the sort of thing one could determine before one spouts one's expert opinion off on the matter in a thread.

And yet you seem to not know.

 

[Togo]

Which is it then? Has austerity produced a surplus?

It seems like this is the sort of thing one could determine before one spouts one's expert opinion off on the matter in a thread.

My understanding is that the austerity measures are producing a surplus of revenue over expenditure, but damaging the economy. This has results in various experts on this thread complaining that Greece is spending (on social security) beyond it's means, despite not knowing the level of expenditure or the level of means. It's also produced a second raft of experts complaining that the government is anti-business by citing the effects of... the austerity measures the government is threatening to get rid of. Ksen's data doesn't fit in with the talking points that posters want to thrash out on this thread, but it's also the only hard data that's been cited.

I'm not a economic development expert. I'm familiar with the role the international banking system, and some of the larger banks, have had in causing the crisis, and the role the Euro has played in harming Greece's balance of payments with countires in the Eastern Med.

 

[dismal]

Do you believe that austerity in Greece is a success?

Compared to what?

Living high off of other people's money? That option does not seem to be available anymore.

 

[dismal]

And yet you seem to not know.

That's funny, I thought I did seem to know. Having cited someone else who actually produced the answer in this very thread.

Maybe you should read it.