Greece, what the fuck?

[Jayjay]

If the troika removes Greece

Using what law or rule, would the Troika remove Greece?

There is no precedent for anyone ever leaving Euro so I suppose they'd just have to make it up as they go.

 

[barbos]

This is why austerity can't work. The economy contracts faster than the debt can be paid off.

As opposed to living beyond one's means, which surprisingly always work

 

[Ford]

This is why austerity can't work. The economy contracts faster than the debt can be paid off.

As opposed to living beyond one's means, which surprisingly always work

Maybe some Russian soldiers could take a "vacation" in Greece? Russia has best economy in the world, and all countries are rushing to join Russia in defying the corrupt West, so maybe answer for Greece is to vote - without coercion - to join Russia.


Putin is generous and democratically elected leader, so he could lead Greek brothers to prosperity, no?

 

[barbos]

As opposed to living beyond one's means, which surprisingly always work

Maybe some Russian soldiers could take a "vacation" in Greece? Russia has best economy in the world, and all countries are rushing to join Russia in defying the corrupt West, so maybe answer for Greece is to vote - without coercion - to join Russia.


Putin is generous and democratically elected leader, so he could lead Greek brothers to prosperity, no?

You really need to do something with your obsession with Putin and Russia.

 

[Ford]

Maybe some Russian soldiers could take a "vacation" in Greece? Russia has best economy in the world, and all countries are rushing to join Russia in defying the corrupt West, so maybe answer for Greece is to vote - without coercion - to join Russia.


Putin is generous and democratically elected leader, so he could lead Greek brothers to prosperity, no?

You really need to do something with your obsession with Putin and Russia.

Just following your lead...comrade.

 

[Lumpenproletariat]

The difference between good debt and bad debt

Yes, good investment is best. But that's not what Greece has been doing. It's been wasting that loan money. I say they've wasted it on high wages/benefits to workers, when they should have slashed that even more, and even then the Greek workers would be doing better than the Bulgarians, who are not starving.

You say they've wasted it on bankers, or --- whatever, it's been wasted, didn't go to improving Greece for the future.

So whatever, they've wasted it, and they should stop doing the same thing anymore. They should not try to "negotiate" a better deal which would only be more of the same. Rather, they should tighten their belts, do whatever it takes, on a pay-as-you-go basis for now, with maybe no chance of any future borrowing for decades, as no one will trust them. So be it.

I don't disagree, but your question was why countries are better off having debt than "payign as they go". Only utterly bankrupt countries that have no other options because nobody would lend them a dime do so, . . .

You'll correct me if I'm wrong, but I'm thinking NONE of them do so. Is there a country today that has no debt?

I think they're all (unless there's 1 or 2 exceptions) running chronic debt. And maybe some of the debt is legitimate, but most of it is not for legitimate investment, but for "economic stimulus" which means basically propping up "jobs" ("job creation") and propping up wages/benefits to workers, in order to "stimulate demand." This really makes them worse off in the long run. But when it's invested in legitimate infrastructure and real public needs, then yes, they're better off having that debt. But much or most is just to prop up "demand" and pander to wage-earners, and they'd be better off to end it. Even pay-as-you-go would produce better long-term results than running up debt based on snake-oil economic theories about "demand" and "economic stimulus."

. . . and are much worse off for it.

Which countries are these which have no debt, or have defaulted, and are serving the public needs in a pay-as-you-go system only? I think such a country is BETTER off in the long run than one which keeps running up new debt in order to pay off previous debt. But is there really an example of such a debt-free country?

Pretending that the Greek problems are magically solved if they just default is not realistic, . . .

Do you mean that default is NEVER the best solution? EVER, no matter how deep in debt the country is? no matter how impossible the new terms would be? Isn't there a point where that does become the best choice? Why wouldn't Greece today be such a case?

. . . even you seem to think that's a good idea only because you have exactly the same punishment mentality shared by most of the Eurogroup countries.

So then, any system of reward-penalty is bad for the economy? It's not good for the economy to have incentives which reward good behavior and penalize bad behavior? Is competition also bad for the economy when it rewards good behavior and penalizes bad behavior?

Also, you used Lithuania as an example, but keep in mind, that Lithuanian national debt (even if one of the lowest in Europe), is still around 40% of the country's GDP.

Yes, other countries also are running up too much debt, not just Greece. They need to stop it.

How much is too much? Economists seem to think that up to 60% of GDP is fine . . .

The percent of GDP is not what's important. What matters is how the debt money is being "invested" -- if it's invested in legitimate public needs it might be good, even if the debt-GDP is higher than 60%.

What makes it too much/not too much is not the high percent of GDP, but whether it's good for future production and thus future revenue to pay back the debt. If the point is to drive up future cost-efficient production and thus prosperity and future revenue, then it's good debt, but if it is done to stimulate "demand" and goose the economy with high wages and "job creation" and "full employment" etc., then it's doomed to failure in the long run, and that country would be better off to stop such debt-spending and balance its budget instead.

That should be the main rule, or answer to "how much is too much?"

. . . in terms of it having a negligible economic impact.

They should stop thinking in terms of "negligible economic impact." All bad impact is bad, even a small amount of bad impact. Good investment in real need does not have bad impact, other than paying the cost, but the net result is a good impact -- the cost is worth it, the net result is positive. That's what should define whether the debt is legitimate or not. "Negligible economic impact" only means that we can put up with some bad impact, as long as we get so many million new "jobs" in return.

This is the wrong standard or rule to apply in deciding whether the debt is justified or not. Not how much negative impact we can put up with in return for so many more "jobs" created. No, but rather --

1) is this spending going to improve our economy, with new needs being met, better long-term economic performance, more savings in the future and higher revenue so we can pay down this debt and sometimes run a surplus instead of a debt? If the answer to this is yes, then it's good investment. But if the answer is:

2) well, it will harm us a little in the long run, but it's only a few billion dollars of harm, "negligible" damage, so it's a small price to pay in return for the instant gratification of so many hundred thousand or million new "jobs" to help reduce the unemployment numbers -- then no, that's bad debt. Even if it would be only a 5% debt/GDP ratio -- That bad debt is still too high.

This is why the Greek debt has been wrong: It's been done for the sake of "jobs" and "economic stimulus" and boosting "demand" of workers rather than efficient future production to increase revenue and pay down that debt.

But there's really no consensus on where to draw the line.

As long as they keep thinking this way, the debt should stop, the Greeks should DEFAULT, and a new philosophy of evaluating debt needs to be found.

 

[barbos]

You really need to do something with your obsession with Putin and Russia.

Just following your lead...comrade.

Looks more like you are leading.

 

[Axulus]

This is why austerity can't work. The economy contracts faster than the debt can be paid off. They end up with exactly what we see in Greece today after nearly six years of austerity, a severely damaged economy with more debt than they had before the the austerity. How can this make any sense to anyone?

If any government runs a budget surplus it is taking money out of the economy. The only place that this money can come is the savings of individuals and companies. There is no other place for it to come from.

- - - Updated - - -

They should repo the Greek islands and give them to Germany.

- - - Updated - - -

It is important for the Greeks to be able to get their economy running well again.

Yet they elected an extremist government that makes that all but impossible.

The Greeks voted out the government who they fell mismanaged the economy and got the country into such a mess.

All that the new government is saying is the obvious fact that austerity doesn't work to pay off this huge level of debt. This is nothing more than the truth. There is nothing extremist about this.

Are we to believe that debt is so destructive that any attempt to pay it down sends an economy into an inescapable downward spiral? In that case, taking on any debt is a slow form of suicide.

 

[Ford]

Just following your lead...comrade.

Looks more like you are leading.

How's that whole Ukraine invasion working out for your President?

 

[tupac chopra]

Are we to believe that debt is so destructive that any attempt to pay it down sends an economy into an inescapable downward spiral? In that case, taking on any debt is a slow form of suicide.

It depends.
An Economic Hit Man Speaks Out: John Perkins on How Greece Has Fallen Victim to "Economic Hit Men"

The fact of the matter is their bankers told them to do this, and around the world, we've come to trust bankers - or we used to. In the United States, we never believed that a banker would tell us to buy a $500,000 house if in fact we could really only afford a $300,000 house. We thought it was in the bank's interest not to foreclose. But that changed a few years ago, and bankers told people who they knew could only afford a $300,000 house to buy a $500,000 house.

"Tighten your belt, in a few years that house will be worth a million dollars; you'll make a lot of money" . . . in fact, the value of the house went down; the market dropped out; the banks foreclosed on these houses, repackaged them, and sold them again. Double whammy. The people were told, "you were stupid; you were greedy; why did you buy such an expensive house?" But in actuality, the bankers told them to do this, and we've grown up to believe that we can trust our bankers. Something very similar on a larger scale happened in so many countries around the world, including Greece.

 

[laughing dog]

This is why austerity can't work. The economy contracts faster than the debt can be paid off. They end up with exactly what we see in Greece today after nearly six years of austerity, a severely damaged economy with more debt than they had before the the austerity. How can this make any sense to anyone?

If any government runs a budget surplus it is taking money out of the economy. The only place that this money can come is the savings of individuals and companies. There is no other place for it to come from.

- - - Updated - - -

They should repo the Greek islands and give them to Germany.

- - - Updated - - -

It is important for the Greeks to be able to get their economy running well again.

Yet they elected an extremist government that makes that all but impossible.

The Greeks voted out the government who they fell mismanaged the economy and got the country into such a mess.

All that the new government is saying is the obvious fact that austerity doesn't work to pay off this huge level of debt. This is nothing more than the truth. There is nothing extremist about this.

Are we to believe that debt is so destructive that any attempt to pay it down sends an economy into an inescapable downward spiral? In that case, taking on any debt is a slow form of suicide.

You can believe any straw man you wish. But it is economic suicide to act to reduce one's ability to repay debt in order to repay that debt.

 

[Lumpenproletariat]

The right kind of "austerity" would work.

This is why austerity can't work. The economy contracts faster than the debt can be paid off. They end up with exactly what we see in Greece today after nearly six years of austerity, a severely damaged economy with more debt than they had before the the austerity. How can this make any sense to anyone?

If any government runs a budget surplus it is taking money out of the economy. The only place that this money can come is the savings of individuals and companies. There is no other place for it to come from.

- - - Updated - - -

They should repo the Greek islands and give them to Germany.

- - - Updated - - -

It is important for the Greeks to be able to get their economy running well again.

Yet they elected an extremist government that makes that all but impossible.

The Greeks voted out the government who they fell mismanaged the economy and got the country into such a mess.

All that the new government is saying is the obvious fact that austerity doesn't work to pay off this huge level of debt. This is nothing more than the truth. There is nothing extremist about this.

Are we to believe that debt is so destructive that any attempt to pay it down sends an economy into an inescapable downward spiral? In that case, taking on any debt is a slow form of suicide.

You can believe any straw man you wish. But it is economic suicide to act to reduce one's ability to repay debt in order to repay that debt.

Right, so just DEFAULT and don't do any more debt. Then you can increase your ability to pay not in order to repay debt but in order to improve your life.

The purpose of debt should NOT be to pay off previous bad debts, but to improve your life.

"Austerity" would work if the previous irresponsible debt is written off as the first step.

 

[dismal]

This is why austerity can't work. The economy contracts faster than the debt can be paid off. They end up with exactly what we see in Greece today after nearly six years of austerity, a severely damaged economy with more debt than they had before the the austerity. How can this make any sense to anyone?

If any government runs a budget surplus it is taking money out of the economy. The only place that this money can come is the savings of individuals and companies. There is no other place for it to come from.

- - - Updated - - -

They should repo the Greek islands and give them to Germany.

- - - Updated - - -

It is important for the Greeks to be able to get their economy running well again.

Yet they elected an extremist government that makes that all but impossible.

The Greeks voted out the government who they fell mismanaged the economy and got the country into such a mess.

All that the new government is saying is the obvious fact that austerity doesn't work to pay off this huge level of debt. This is nothing more than the truth. There is nothing extremist about this.

Are we to believe that debt is so destructive that any attempt to pay it down sends an economy into an inescapable downward spiral? In that case, taking on any debt is a slow form of suicide.

Though the economic joys of racking up foreign debt may be great, the whole debate becomes somewhat moot when you run out of foreigners willing to lend you money.

 

[untermensche]

Though the economic joys of racking up foreign debt may be great, the whole debate becomes somewhat moot when you run out of foreigners willing to lend you money.

Lending money with no real plan for economic growth is the fault of lenders.

There is no known strategy for economic growth in a depressed economy besides Keynesian proposals.

 

[ksen]

Are we to believe that debt is so destructive that any attempt to pay it down sends an economy into an inescapable downward spiral? In that case, taking on any debt is a slow form of suicide.

It's not the debt itself that's destructive. It's the severe austerity that makes it even liklier it can't be paid back that is destructive in this case.

 

[dismal]

Though the economic joys of racking up foreign debt may be great, the whole debate becomes somewhat moot when you run out of foreigners willing to lend you money.

Lending money with no real plan for economic growth is the fault of lenders.

Lucky for Greece it appears the lenders are not willing to make that mistake any more.

 

[untermensche]

Lending money with no real plan for economic growth is the fault of lenders.

Lucky for Greece it appears the lenders are not willing to make that mistake any more.

Yes. Things are better because the major lenders in Europe don't have a clue what it takes to stimulate an economy in distress.

 

[ksen]

Lending money with no real plan for economic growth is the fault of lenders.

Lucky for Greece it appears the lenders are not willing to make that mistake any more.

Lenders are always willing to make mistakes.

 

[dismal]

Lucky for Greece it appears the lenders are not willing to make that mistake any more.

Lenders are always willing to make mistakes.

Good, then Greece should be able to borrow lots more money. Banking crisis: averted.

- - - Updated - - -

Lucky for Greece it appears the lenders are not willing to make that mistake any more.

Yes. Things are better because the major lenders in Europe don't have a clue what it takes to stimulate an economy in distress.

It seems like they have figured out one reasonable rule: don't give your money to Greece.

 

[untermensche]

Lucky for Greece it appears the lenders are not willing to make that mistake any more.

Lenders are always willing to make mistakes.

As long as they have governments protecting them from the consequences.