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Author Topic:   Wither Greece?
Percy
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Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.2


(4)
Message 1 of 46 (761781)
07-05-2015 5:15 PM


It looks like today's Greek vote is moving toward rejection of the bailout deal, but whatever the outcome, what kind of insanity has taken over Greek's creditors? Don't they understand that their best shot at debt repayment is a healthy, vibrant Greek economy? The Eurozone cure for Greece is worse than the disease. They're like a slave owner who instead of treating his slaves well whips them into the hospital, benefiting no one.
The solution is to put Greece on the road to a robust recovery, and to restructure the debts in a way that makes this possible. Only when the Greek economy recovers can Greece afford to begin repaying the debts. Greek's creditors are being strict to the point of hurting their own self-interest.
--Percy

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RAZD
Member (Idle past 1405 days)
Posts: 20714
From: the other end of the sidewalk
Joined: 03-14-2004


(1)
Message 2 of 46 (761782)
07-05-2015 5:51 PM
Reply to: Message 1 by Percy
07-05-2015 5:15 PM


basic
An economy is based on the movement of money, thus anything that improves movement improves the economy.
The poorest elements in any economy spend money as fast as they get it, if nothing else to pay off debts. Feed the base and the economy will grow.
This holds for countries as well as people.
Austerity is nothing more than trickle-down under another name -- a failed concept.
Enjoy.

we are limited in our ability to understand
by our ability to understand
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vimesey
Member
Posts: 1398
From: Birmingham, England
Joined: 09-21-2011


(1)
Message 3 of 46 (761785)
07-05-2015 6:34 PM
Reply to: Message 1 by Percy
07-05-2015 5:15 PM


I would agree with all of that (although I would add that Greece needs to get its house in order too, re tax avoidance/evasion and corruption (matters I can vouch for to some extent, knowing someone who recently lived in and ran a business in Greece for some 15 years)).
The problem is, Germany and the rest of the Northern Europeans are extremely worried that if they forgive as much of the Greek debt as they would need to, in order to allow a recovery, they'd have Portugal, Ireland, Italy and Spain knocking on the door, demanding similar treatment, with much bigger numbers.
Edited by vimesey, : Spelling

Could there be any greater conceit, than for someone to believe that the universe has to be simple enough for them to be able to understand it ?

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Tangle
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Posts: 9489
From: UK
Joined: 10-07-2011
Member Rating: 4.9


Message 4 of 46 (761786)
07-05-2015 6:36 PM
Reply to: Message 1 by Percy
07-05-2015 5:15 PM


Nobody actually knows what to do or what will happen next. There are no good outcomes.
The only way that Greece can recovery inside several generations is if the majority of the debt is written off. But as a large chunk of it already has been and if more is, then the poorer countries that have underwritten it - mostly Eastern European - will be made poorer and more dominos fall.
The question I would like an answer to s how the money was loaned in the first place.

Je suis Charlie. Je suis Ahmed. Je suis Juif.
Life, don't talk to me about life - Marvin the Paranoid Android
"Science adjusts it's views based on what's observed.
Faith is the denial of observation so that Belief can be preserved."
- Tim Minchin, in his beat poem, Storm.

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Jon
Inactive Member


(2)
Message 5 of 46 (761789)
07-05-2015 7:16 PM
Reply to: Message 2 by RAZD
07-05-2015 5:51 PM


Re: basic
An economy is based on the movement of money,
That thinking has led to the last several decades of U.S. decline, the recent recession, and willful government ignorance of the greedy wheeling and dealing of Wall Street bankers. Oh, and the Greek economic crisis.
Economies are based on the creation of actual things that provide actual utility.
Illusions are based on the movement of money.

Love your enemies!

This message is a reply to:
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Replies to this message:
 Message 6 by Phat, posted 07-05-2015 8:01 PM Jon has replied
 Message 8 by anglagard, posted 07-05-2015 11:27 PM Jon has replied
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Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 6 of 46 (761802)
07-05-2015 8:01 PM
Reply to: Message 5 by Jon
07-05-2015 7:16 PM


Greece: From the Frying Pan into the Fire
I have a high school friend whom I have known for 40 years,Chris. He married his Greek wife Zoe five years ago. They are planning to move back to Greece.
According to Zoe, the Greeks never liked Germany nor the austerity program from the very start. They see it as a deal with the devil. Greeks never planned on paying back any of what was owed....and I respect that sort of rebellion. If you cant pay it back you shouldn't kill yourself trying. There is no honor in working yourself into a grave simply to repay a debt.

God created war so that Americans would learn geography. —Mark Twain
"A lie can travel half way around the world while the truth is putting on its shoes." —Mark Twain

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Jon
Inactive Member


Message 7 of 46 (761807)
07-05-2015 8:29 PM
Reply to: Message 6 by Phat
07-05-2015 8:01 PM


Re: Greece: From the Frying Pan into the Fire
If you cant pay it back you shouldn't kill yourself trying.
More than that, you shouldn't borrow it in the first place.
Of course, sometimes that unavoidable.
Edited by Jon, : No reason given.

Love your enemies!

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anglagard
Member (Idle past 836 days)
Posts: 2339
From: Socorro, New Mexico USA
Joined: 03-18-2006


(2)
Message 8 of 46 (761813)
07-05-2015 11:27 PM
Reply to: Message 5 by Jon
07-05-2015 7:16 PM


Re: basic
Jon writes:
Economies are based on the creation of actual things that provide actual utility.
Illusions are based on the movement of money.
Point of correction, Jon.
People create actual things that provide actual utility expecting to be compensated so they can obtain other actual things providing other actual utility.
Unless using the barter system, that means of exchange is called money.
Are you familiar with the Monetarist Equation of exchange?
MxV = PxQ
where, for a given period,
M, is the total nominal amount of money supply in circulation on average in an economy.
V, is the velocity of money, that is the average frequency with which a unit of money is spent.
P, is the price level.
Q, is an index of real expenditures (on newly produced goods and services).
Do you now see how the velocity of money is related to the production of new goods and services? You know, that production of new goods and services that means jobs and a vibrant economy?
Using this formula, Paul Volker ended stagflation in 1982. Ignoring this formula Allen Greenspan screwed up the economy in 2003. This equation is why sending all the proceeds from improved productivity to the top 1% does not help the economy as much as sending it to the other 99%. It is because the other 99% spends it on goods and services rather than hoard it, thereby increasing the velocity of money.
This is one of the reasons why forcing austerity on Greece will never work. If you force them to hoard money in anticipation of a worsening economy, they do not spend it on goods and services, thereby weakening the economic base needed to maintain any debt payments.
If you or anyone else can point to a counterexample to the Equation of exchange invariably always working, please feel free to enlighten me via the thread Economics 101 - Evidence Based Decision Making, because I as yet know of not a single one.
Edited by anglagard, : Provide balance to sentences.
Edited by anglagard, : eliminate use of the root word 'example' twice in the same sentence.

Read not to contradict and confute, not to believe and take for granted, not to find talk and discourse, but to weigh and consider. - Francis Bacon

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RAZD
Member (Idle past 1405 days)
Posts: 20714
From: the other end of the sidewalk
Joined: 03-14-2004


(1)
Message 9 of 46 (761826)
07-06-2015 6:51 AM
Reply to: Message 5 by Jon
07-05-2015 7:16 PM


Re: basic
to add to what anglagard said ...
Economies are based on the creation of actual things that provide actual utility.
Which are useless if nobody can buy them.
That thinking has led to the last several decades of U.S. decline, the recent recession ...
And yet the problem was not with manufacturing of product but with an absence of people buying the product ... because they did not have the money to buy them.
Making products doesn't put money in buyers pockets, what puts money in buyers pockets is fair return on their investment in the production -- a proper compensation for work rather than starvation wages.
That is why bailing out the rich did not result in recovery.
... That thinking has led to the last several decades of U.S. decline, the recent recession ...
Giving money to the rich via tax cuts and bailouts has only made the economy worse by removing money from the pockets of the spenders to put it in the pockets of the hoarders.
... Oh, and the Greek economic crisis.
The problem of Greece will not be solved by austerity and the imposition of big bank deals either, the problem of Greece can be solved by feeding the base of their economy. You can't make a horse run faster by starving it.
Enjoy

we are limited in our ability to understand
by our ability to understand
RebelAmerican☆Zen☯Deist
... to learn ... to think ... to live ... to laugh ...
to share.


Join the effort to solve medical problems, AIDS/HIV, Cancer and more with Team EvC! (click)

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Jon
Inactive Member


(1)
Message 10 of 46 (761827)
07-06-2015 7:03 AM
Reply to: Message 8 by anglagard
07-05-2015 11:27 PM


Re: basic
I seem to have been unclear again
I wasn't arguing that money wasn't involved.
I was trying to point out that simply moving money doesn't build an economy even though it shows up as increasing GDP (GDP just measures how much money exchanges hands).
Money has to have something real to back it.
In the case of people borrowing to cover a trade deficit, the money has nothing to back it and such a system will eventual collapseno matter who has the money.
This equation is why sending all the proceeds from improved productivity to the top 1% does not help the economy as much as sending it to the other 99%. It is because the other 99% spends it on goods and services rather than hoard it, thereby increasing the velocity of money.
Exactlyit spurs the production of actual things with actual utility.
Money is just a tool.
Economic prosperity has to come from the production of actual things with actual utility. If it doesn't (as in the case of borrowing to cover a trade deficit or people getting rich in the 'financial sector') the 'prosperity' is an illusion. And it only takes one person to look behind the curtain, expose the con, and send the whole system tumbling down.
Edited by Jon, : No reason given.

Love your enemies!

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Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.2


Message 11 of 46 (761833)
07-06-2015 8:12 AM


Where have you gone, Yanis Varoufakis?
Yanis Varoufakis, the Greek finance minister, is detested by his European counterparts, but he seems to have gotten the core of the problem exactly right, having once said (paraphrasing), "This is like whipping a sick goat to get more milk." He resigned earlier today. For those other ministers who had emotional issues negotiating with him, maybe this will help.
For those who don't recall how Greek got into this mess or who were wondering how much responsibility the Greek's bear, the answer is complete responsibility. They apparently lied about the true state of their finances for years (basically about tax revenue and entitlement payments) until finally a day came around six years ago when they couldn't make a loan payment, after which the truth gradually emerged. This is all just from memory, if someone knows better or more accurate details please fill them in.
But six years of punishing austerity that seem to stretch unendingly into the future is not the answer. Greece voted no to more austerity, and it should be obvious to even the most anal finance and prime ministers that once Greece is all but dead there won't be any more loan repayments. The same goes for Italy, Portugal and Ireland. Helping them back on their feet is the best way to insure loan repayments. The current approach has all the sense of debtor's prison.
--Percy

Replies to this message:
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Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


(1)
Message 12 of 46 (761835)
07-06-2015 8:18 AM
Reply to: Message 11 by Percy
07-06-2015 8:12 AM


Re: Where have you gone, Yanis Varoufakis?
And I never thought that Debtors Prison made much sense to begin with.
Iceland ended up paying back 7% of its debt after discovering that Great Britain was indirectly responsible for 93% of it.
Why should an individual---or a nation---be responsible after being tricked by predatory lending?

God created war so that Americans would learn geography. —Mark Twain
"A lie can travel half way around the world while the truth is putting on its shoes." —Mark Twain

This message is a reply to:
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1.61803
Member (Idle past 1504 days)
Posts: 2928
From: Lone Star State USA
Joined: 02-19-2004


Message 13 of 46 (761861)
07-06-2015 10:31 AM
Reply to: Message 12 by Phat
07-06-2015 8:18 AM


Re: Where have you gone, Yanis Varoufakis?
Hi Phat, I am not economic major or business grad but from what I have seen in the media and on various documentaries on the subject Greece has been allowing the corporate banks to cook their books and they bought into the credit default swaps too. Now that the chickens are coming home to roost they are the ones left holding the bag.
Very complex problem that has been compounded by from what it seems like, greed and stupidity. Drachmas here we come.

"You were not there for the beginning. You will not be there for the end. Your knowledge of what is going on can only be superficial and relative" William S. Burroughs

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jar
Member (Idle past 394 days)
Posts: 34026
From: Texas!!
Joined: 04-20-2004


Message 14 of 46 (761862)
07-06-2015 10:33 AM
Reply to: Message 12 by Phat
07-06-2015 8:18 AM


Re: Where have you gone, Yanis Varoufakis?
Phat writes:
Why should an individual---or a nation---be responsible after being tricked by predatory lending?
Why should willful ignorance be an excuse?

Anyone so limited that they can only spell a word one way is severely handicapped!

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RAZD
Member (Idle past 1405 days)
Posts: 20714
From: the other end of the sidewalk
Joined: 03-14-2004


Message 15 of 46 (761870)
07-06-2015 11:10 AM
Reply to: Message 11 by Percy
07-06-2015 8:12 AM


Re: Where have you gone, Yanis Varoufakis?
... They apparently lied about the true state of their finances for years (basically about tax revenue and entitlement payments) until finally a day came around six years ago when they couldn't make a loan payment, after which the truth gradually emerged. ...
And the current government did not participate in that, but have inherited the result -- it's like Obama having to pay for Bushes wars ^2 ...
Greece should prosecute the lawmakers and banks\financial institutions as Iceland did.

we are limited in our ability to understand
by our ability to understand
RebelAmerican☆Zen☯Deist
... to learn ... to think ... to live ... to laugh ...
to share.


Join the effort to solve medical problems, AIDS/HIV, Cancer and more with Team EvC! (click)

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