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  #21  
Old Nov 4th 2011, 05:31 PM
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Default Re: Greece

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Square this with the article that Michael posted in the other thread and I copied into this one? I guess it's more convenient to ignore it.
Actually, the facts are that Greece has indeed been living far beyond their means for many decades as the most indebted country in Europe.

To be fair, EVERY country in Europe habitually lives beyond their own means as a matter of policy. The Greeks lacked the income to support their desired social service lifestyle so they just used debt to pay the difference.

Bottom line is that no matter how evil you think the EU banksters are, the Greeks brought this down on themselves by refusing to actually pay for their own government spending and using endless amounts of debt to cover that.

I have ZERO tolerance for fiscal deficits - I think it is immoral and criminal for the present generation to demand more than they are willing to pay for in taxes and stick their grandchildren with the bill for present spending. This critique applies to ALL western countries. Greece is just the worst example.

Note: Cyclical Keynesian policy may have some merit, but running nonstop habitual deficits for decades regardless of the economic cycle is not Keynesian policy - it is nothing but the immoral attempt to foist the cost of government onto the next generation that has no say in the policy.
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  #22  
Old Nov 4th 2011, 06:02 PM
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Default Re: Greece

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I have ZERO tolerance for fiscal deficits - I think it is immoral and criminal for the present generation to demand more than they are willing to pay for in taxes and stick their grandchildren with the bill for present spending. This critique applies to ALL western countries. Greece is just the worst example.
If we are talking about countries with western living standars, then I 100% agree.
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  #23  
Old Nov 4th 2011, 06:40 PM
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Default Re: Greece

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Originally Posted by Michael View Post
Actually, the facts are that Greece has indeed been living far beyond their means for many decades as the most indebted country in Europe.

To be fair, EVERY country in Europe habitually lives beyond their own means as a matter of policy. The Greeks lacked the income to support their desired social service lifestyle so they just used debt to pay the difference.

Bottom line is that no matter how evil you think the EU banksters are, the Greeks brought this down on themselves by refusing to actually pay for their own government spending and using endless amounts of debt to cover that.

I have ZERO tolerance for fiscal deficits - I think it is immoral and criminal for the present generation to demand more than they are willing to pay for in taxes and stick their grandchildren with the bill for present spending. This critique applies to ALL western countries. Greece is just the worst example.

Note: Cyclical Keynesian policy may have some merit, but running nonstop habitual deficits for decades regardless of the economic cycle is not Keynesian policy - it is nothing but the immoral attempt to foist the cost of government onto the next generation that has no say in the policy.
Saying that the Greek government lived beyond its means (true) is not the same as saying that Greek citizens have lived "high on the hog" (false).

This reminds me a whole lot of the crisis that developed due to the Argentine peso being pegged to the dollar. It destroyed their economy; I don't see why Greece should be different.
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  #24  
Old Nov 4th 2011, 06:54 PM
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Default Re: Greece

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Saying that the Greek government lived beyond its means (true) is not the same as saying that Greek citizens have lived "high on the hog" (false).
Yes, that's certainly true.

And by North American standards, Greece is comparatively quite poor. But a rather large chunk of all that debt spending was financing the Greek state payroll and pensions (direct to the citizenry/voters).

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This reminds me a whole lot of the crisis that developed due to the Argentine peso being pegged to the dollar. It destroyed their economy; I don't see why Greece should be different.
Well, it is and it isn't. It depends on how long your memory is.

Don't forget that the reason they invented the Euro in the first place was because of the weakness of the national currencies of the various (non-German) European countries. That's why Germany has virtually absolute control over the ECB - because they are the only ones who's currency was consistently strong and well managed.

So yes, Greece would likely survive a theoretical default, though it would hurt. Argentina did have the advantage of having a big agricultural industry as well as mining which allowed them to play the export game with the cheap currency in order to recover. Greece doesn't have a big export commodity to drive a recovery - the only thing they have is tourism - which works in a similar way as exports, but hard to ramp up the scale and also, the wages paid by mining are usually higher than the wages paid by tourism.

So, I'd say yes, the Argentinian example is relevant here, but Greece isn't quite as well equipped to carry out the same policy because of a smaller export economy. Greece also has the added problem of endemic corruption (though Argentina was hardly angelic in that respect, so that probably is a null point).
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  #25  
Old Nov 4th 2011, 07:03 PM
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Default Re: Greece

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Yes, that's certainly true.

And by North American standards, Greece is comparatively quite poor. But a rather large chunk of all that debt spending was financing the Greek state payroll and pensions (direct to the citizenry/voters).



Well, it is and it isn't. It depends on how long your memory is.

Don't forget that the reason they invented the Euro in the first place was because of the weakness of the national currencies of the various (non-German) European countries. That's why Germany has virtually absolute control over the ECB - because they are the only ones who's currency was consistently strong and well managed.

So yes, Greece would likely survive a theoretical default, though it would hurt. Argentina did have the advantage of having a big agricultural industry as well as mining which allowed them to play the export game with the cheap currency in order to recover. Greece doesn't have a big export commodity to drive a recovery - the only thing they have is tourism - which works in a similar way as exports, but hard to ramp up the scale and also, the wages paid by mining are usually higher than the wages paid by tourism.

So, I'd say yes, the Argentinian example is relevant here, but Greece isn't quite as well equipped to carry out the same policy because of a smaller export economy. Greece also has the added problem of endemic corruption (though Argentina was hardly angelic in that respect, so that probably is a null point).
Yes, those are excellent points. But as you said, Greeks already live in relative austerity. I suspect they'll be ok.

What I find bemusing about this whole thing is all these attempts to figure out a way to bail Greece out, and all the internal shenanigans with the government, just seem to be kicking the can down the road. Default seems inevitable, whether it is next week or next year or whatever.

Also an interesting development in the land of Aristotle and Athenian Democracy is this unspoken idea that the government must, at all costs, avoid actually letting the people decide anything. It's so transparently authoritarian it's laughable. Who calls the shots in Greece? French banks apparently. No wonder their people are pissed.
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Old Nov 4th 2011, 07:23 PM
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Default Re: Greece

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I have ZERO tolerance for fiscal deficits - I think it is immoral and criminal for the present generation to demand more than they are willing to pay for in taxes and stick their grandchildren with the bill for present spending. This critique applies to ALL western countries. Greece is just the worst example.
"Blessed are the young for they shall inherit the national debt."
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  #27  
Old Nov 4th 2011, 07:24 PM
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Default Re: Greece

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Yes, those are excellent points. But as you said, Greeks already live in relative austerity. I suspect they'll be ok.
Yes, either way, Greece is a comparatively poor country and is likely to stay that way.

(that is to say, they are rich by world standards, they are poor by western standards)

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What I find bemusing about this whole thing is all these attempts to figure out a way to bail Greece out, and all the internal shenanigans with the government, just seem to be kicking the can down the road. Default seems inevitable, whether it is next week or next year or whatever.
Yes, this is an excellent point. Greece is merely the largest of the ongoing 'wave' of sovereign debt crisis - first it was Iceland and Ireland. But both of these are micro-tiny places with economies so small they don't cause much effect, so they were easily delt with. Greece is the real challenge because it is Spain and Italy waiting in the wings and their economies (and actual debts) are physically much larger in real terms. They all have the same problem - a consistent inability or unwillingness to pay sufficient taxes to cover the present cost of their own governments (necessitating deficit financing which just creates a mountain of debt). The USA has exactly the same political problem right now.

The bottom line is that the EU adopted a common currency without adopting a common fiscal policy. That was a loaded gun right from day one, but everyone just ignored it because they needed to. So the one thing that was known from day one that could kill the Euro is in fact happening right now. That's the problem.

Europe is just too diverse in socio-economic development. The north-western part is highly developed and highly advanced. The south and east, much less so. Any monetary policy is going to be good for one and cause serious trouble for the other. Since Germany controls the ECB, the Euro follows the German economy. But that is really bad fiscal/economic policy for Portugal, Spain, Italy and Greece with huge and rising debts and weak economies that desperately need to devalue the currency to survive. Germany would rather face nuclear armagedden than devalue the Euro. That's the Euro crisis in a nutshell and why I tried to create a separate thread for that larger topic rather than just focusing on Greece.

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Also an interesting development in the land of Aristotle and Athenian Democracy is this unspoken idea that the government must, at all costs, avoid actually letting the people decide anything. It's so transparently authoritarian it's laughable. Who calls the shots in Greece? French banks apparently. No wonder their people are pissed.
No surprise to me.

Suffice it to say that the Greek people who live in Greece today have very little historical linkage with the 'Greeks' of the ancient era. With the fall of the Roman Empire, almost the whole population of Western Europe was over-run and supplanted by new peoples - particular places were more heavily over-run than others - Greece being one of them. And that was before Greece was conquered by the Muslims and ruled by the Ottomans for a few centuries.

That's beside the fact that Aristotle was far too much of an elitist to be considered an actual democrat, though some of his writings might lead one to believe that he was a democrat. Aristotle himself lived most of his life [comfortably] under Macedonian 'tyranny', and famously as the tutor of Alexander the Great.
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  #28  
Old Nov 4th 2011, 07:57 PM
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Default Re: Greece

Aristotle was kind of a piece of shit, but he was certainly more democratically oriented than the likes of Plato, for example.
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  #29  
Old Nov 4th 2011, 08:10 PM
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Default Re: Greece

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Aristotle was kind of a piece of shit, but he was certainly more democratically oriented than the likes of Plato, for example.
Well yes, but Plato is famously one of the greatest of democracy-haters of all time - rather in a class all by himself (or rather, a place he shares with his alter-ego Socrates). That's why I have always found Plato so facenating.
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  #30  
Old Nov 4th 2011, 08:51 PM
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Default Re: Greece

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Well yes, but Plato is famously one of the greatest of democracy-haters of all time - rather in a class all by himself (or rather, a place he shares with his alter-ego Socrates). That's why I have always found Plato so facenating.
Imho I find radical anti-authoritarians more fascinating than the alternative, but to each their own I guess.
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