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LeoMarr posted:so austerity doesnt work and its obvious People make bad decisions when they don't have any easy options.
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Jul 16, 2015 00:33
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Lumberjack Bonanza posted:People make bad decisions when they don't have any easy options. why didnt eu just invade greece and force them to pay their debts off at gunpoint, seems easier than waiting 3 years to just give them money again
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Jul 16, 2015 00:40
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There are easy options, unfortunately for all involved these are antithetical to the idea of capitalism as a whole, so better to starve the beast until optimal conditions for capitalism are re-established so hopefully they won't have to deal with this problem again in their lifetime.
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Jul 16, 2015 00:40
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Ddraig posted:There are easy solutions, unfortunately for all involved these are antithetical to the idea of capitalism as a whole, so better to starve the beast until optimal conditions for capitalism are re-established so hopefully they won't have to deal with this problem again in their lifetime. i dont think this is going to work
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Jul 16, 2015 00:41
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i would say that a solution that requires a major political realignment is not really an easy solution
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Jul 16, 2015 00:42
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So Greece is hosed unless they just default on everything and turn into a fascist pariah state basically
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Jul 16, 2015 00:43
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LeoMarr posted:So Greece is hosed unless they just default on everything and turn into a fascist pariah state basically oh yeah totally e: dont get me wrong. greece would still be hosed if it did that instead, just a different kind of hosed Gum fucked around with this message at 00:50 on Jul 16, 2015 |
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Jul 16, 2015 00:45
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So back to austerity. why did austerity work for Germany, is it because most of their loans were forgiven and thus even though they cut government spending they didnt have to pay all profits to the loan collectors?
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Jul 16, 2015 00:54
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the only good ending for greece i can see is if we can figure out a way to pretend greece is repaying its debt when it actually isnt. the money's not there, but the money not being there hasnt stopped us before.
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Jul 16, 2015 00:55
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so hypothetically, if greece collapses what happens. Do the loans stay there if another entity takes over the country or are they magically forgiven
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Jul 16, 2015 01:12
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i actually dont know. i guess it would depend a lot on if this hypothetical 'post-collapse' greek state is seen as the same entity as the pre-collapse one, but im really not sure
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Jul 16, 2015 01:23
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LeoMarr posted:so hypothetically, if greece collapses what happens. Do the loans stay there if another entity takes over the country or are they magically forgiven Everything I've heard short term is 'privatization' which means a fire-sale of Greek government property to whoever will pay for it. This will obviously gently caress the Greeks long term, but at least some rich guy from Dubai can build his summer home on his very own Greek island.
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Jul 16, 2015 01:24
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ewiley posted:Everything I've heard short term is 'privatization' which means a fire-sale of Greek government property to whoever will pay for it. This will obviously gently caress the Greeks long term, but at least some rich guy from Dubai can build his summer home on his very own Greek island. So the way to fix the debt is to sell off everything the government has, which will pay off the debt but leave the country in financial ruin after the debt is paid. So they take more loans out to build up their assets and the cycle countinues?
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Jul 16, 2015 01:31
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LeoMarr posted:So back to austerity. why did austerity work for Germany? Germany chopping $30 billion a year out of a budget of $1.6 trillion is poo poo all. It would be like asking the Greek government to cut $3 billion. But they're not. Interest on Greek debt was 20 billion Euro in 2014. That's like Germany having to cut $300 Billion per year which would cut 0.75% out of their GDP straight off the top, not counting secondary effects. Germany's real foray into capital-A austerity was in the 1920s and it precipitated the rise of a particular mustached Austrian man you may have heard of.
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Jul 16, 2015 01:40
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What if Greece just declares itself a bunch of city-states again? e: This was just a dumb joke but now I'm genuinely curious - if the national government completely dissolves does the debt dissolve with it?
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Jul 16, 2015 01:45
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LeoMarr posted:So the way to fix the debt is to sell off everything the government has, which will pay off the debt but leave the country in financial ruin after the debt is paid. So they take more loans out to build up their assets and the cycle countinues? it's commonly known as 'the austerity death spiral'
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Jul 16, 2015 01:45
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ductonius posted:Germany chopping $30 billion a year out of a budget of $1.6 trillion is poo poo all. It would be like asking the Greek government to cut $3 billion. But they're not. Interest on Greek debt was 20 billion Euro in 2014. That's like Germany having to cut $300 Billion per year which would cut 0.75% out of their GDP straight off the top, not counting secondary effects. so Greece is going to fall into a fascist pariah state because the last time Austerity got this bad hitler came to power. That makes sense with the riots that are going on right now
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Jul 16, 2015 01:47
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Hopefully they will be communist instead.
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Jul 16, 2015 01:48
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LeoMarr posted:so Greece is going to fall into a fascist pariah state because the last time Austerity got this bad hitler came to power. Destabilize people's lives enough and they'll fall behind the first strong man rear end in a top hat who will guarantee they can walk down the street safely and not starve.
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Jul 16, 2015 01:53
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Do you guys think Putin would send Greek humanitarian aid? Preferrably in the form of T-80s, Grazni rocket platforms and AK47s
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Jul 16, 2015 01:59
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LeoMarr posted:Do you guys think Putin would send Greek humanitarian aid? Preferrably in the form of T-80s, Grazni rocket platforms and AK47s Well, I don't see what could go wrong.
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Jul 16, 2015 02:03
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I think we forgot to actually define what we're talking about when we say if austerity does or doesn't work. It does work extremely well if you're rich because it disproportionately affects you depending on how austere a society chooses to be. Also austerity works well for maintaining a stable currency in that it's MUCH easier to regulate how much inflation your economy is going to have when you have control of the press and there is little to no spending that needs to be done. If that's what you value then yes, austerity works. You can make the decision of whether or not you're an rear end in a top hat though. LeoMarr posted:So back to austerity. why did austerity work for Germany, is it because most of their loans were forgiven and thus even though they cut government spending they didnt have to pay all profits to the loan collectors? Germany saves money like loving crazy and does very little spending. If you look at where the banks are in Europe that matter (hint, germany and switzerland) you'll find that not only does the government save massive amounts of money, the people do also! Because of that their spending is more regulated through and through. Plus germany is special cause it can produce itself through anything. At the end of the day austerity works for Germany because they're austere people.
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Jul 16, 2015 02:19
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Veskit posted:I think we forgot to actually define what we're talking about when we say if austerity does or doesn't work. It does work extremely well if you're rich because it disproportionately affects you depending on how austere a society chooses to be. Also austerity works well for maintaining a stable currency in that it's MUCH easier to regulate how much inflation your economy is going to have when you have control of the press and there is little to no spending that needs to be done. so Austerity works if people are austere in a sense. But greek people still live in the city state mindset and dont work towards a common goal?
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Jul 16, 2015 02:31
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LeoMarr posted:so Austerity works if people are austere in a sense. In a sense yes. LeoMarr posted:But greek people still live in the city state mindset and dont work towards a common goal? In a sense no. Austerity works for you if you have the money to be austere. The only way you can choose not to spend money is if you spend less than you make. For example if I as an american make 50k a year, but it costs 50k a year to maintain my lifestyle of having a wife, two children a dog and a modest 3 bedroom house, I'm going to have a very hard time being austere regardless of what my mindset is or the country's goal. Then you have to ask how much easier is my country making it for me at that lifestyle? Are there available public transportation so I don't need to own a car, or do I have to eat automobile costs? Do I have subsidized rent? What about healthcare costs, ect ect the lists goes on. An austere country would make you pay for all of these things, but hey if I make enough money, that's not really a pain to be austere now is it? Say I make 50,000,000 dollars a year. I'd certainly want an austere culture because I can afford a grand lifestyle and still pocket a million a year in hard cash and put another half of that into growth opportunities and grow more and more. It's EXTREMELY easy to be austere in this scenario. HOWEVER if you're Greece, and you have 25% unemployment in 2014, do you even have a choice to be austere? If so how? Well, if your rich people have uneven power based on their wealth and vote for austerity, then the poor have little power and want things like medical care, retirement benefits and so forth, and the rich wins and you're an austere nation then it doesn't matter if you're on board with the mindset to be austere, you're hosed. Veskit fucked around with this message at 02:58 on Jul 16, 2015 |
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Jul 16, 2015 02:49
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LeoMarr posted:so Austerity works if people are austere in a sense. But greek people still live in the city state mindset and dont work towards a common goal? Stop it. As other people said, Germany hasn't had any significant austerity at all. Plus their economy is export base and the reason these southern countries took on so many debts is because Germany (and others) boosted the economy , so that people in the eurozone could buy German exports getting the cash back in their economy. Result: Germany has a huge trade surplus when the crisis hit. Greece in particular has major problems of corruption and clientelism, but it was all good with Germany when the times where good. (Plus it helped Germany by lowering the value of the Euro and giving them an edge export wise.) So stop it with the "Southern retards, lazy swarthy bums" vs the "industrious Germans and their protestant work ethic". If everyone behaves like Germany, nobody imports anything, and Germany can't export. My debts are your assets and vice-vers. My expenditures are your income and vice-versa. Edit: (In the same vein, see Veskit's response above and below). ponfed fucked around with this message at 03:03 on Jul 16, 2015 |
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Jul 16, 2015 02:50
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LeoMarr posted:So back to austerity. why did austerity work for Germany, is it because most of their loans were forgiven and thus even though they cut government spending they didnt have to pay all profits to the loan collectors? Germany is a good case study because it provides a nice control with the former DDR. Austerity policies in the former DDR create lots of problems with unemployment, factories closing and all sorts of awful poo poo. Austerity in the well-to-do industrialized areas in Western Germany has resulted in less government spending and increased investor confidence so a few debts get forgiven and others get restructured. While I think there are better approaches, if you can afford it, austerity is a viable response to loss of investor confidence. If you have a lot of money and are spending too much money, it makes sense to just spend less money. On the other hand, if you can't afford it, austerity makes things much, much worse.
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Jul 16, 2015 02:56
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Lastly, the only way you can be austere is if you have export surplus because you have to not only produce,  you also have to sell your goods to someone and if your nation is austere, you can't really sell to your austere people now can you?Shbobdb posted:Germany is a good case study because it provides a nice control with the former DDR. Austerity policies in the former DDR create lots of problems with unemployment, factories closing and all sorts of awful poo poo. Austerity in the well-to-do industrialized areas in Western Germany has resulted in less government spending and increased investor confidence so a few debts get forgiven and others get restructured. Germany can easily afford it but doesn't want to because it'd piss off rich people. You print the money and inflate your currency.
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Jul 16, 2015 03:00
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So austerity isn't working in greece because they aren't changing anything in terms of economic growth, because austerity is limiting economic growth
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Jul 16, 2015 03:51
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LeoMarr posted:So austerity isn't working in greece because they aren't changing anything in terms of economic growth, because austerity is limiting economic growth Alright boys and girls close it down our work here is done. Also you can apply that logic to X country because it's just true.
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Jul 16, 2015 03:55
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Veskit posted:Alright boys and girls close it down our work here is done. Also you can apply that logic to X country because it's just true. well yeah, I knew that. I really wanted to believe that austerity would have some way to work. and I guess it does if your economy can support it, but Greece's debt outweighs its GDP so it can't.
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Jul 16, 2015 03:56
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LeoMarr posted:I guess it does if your economy can support it Once again, you have to go back and explain what your definition of "work" is. In Greece you would be hard pressed to say it could work on any level, but how is austerity working for Germany?
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Jul 16, 2015 04:10
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Austerity works by slashing government programs so private interests can point to failing government programs and go 'look how lovely this is, let us privatize instead and also de-regulate' and then rich people get richer. Also lower taxes for them is a happy bonus. hth Veskit posted:Once again, you have to go back and explain what your definition of "work" is. In Greece you would be hard pressed to say it could work on any level, but how is austerity working for Germany? Germany doesn't have austerity programs; they have a strong social safety net and semi-private health insurance that provides a minimum of coverage with a sliding payment scale depending on income. Moridin920 fucked around with this message at 04:29 on Jul 16, 2015 |
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Jul 16, 2015 04:26
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LeoMarr posted:well yeah, I knew that. I really wanted to believe that austerity would have some way to work. and I guess it does if your economy can support it, but Greece's debt outweighs its GDP so it can't.
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Jul 16, 2015 04:31
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LeoMarr posted:so austerity doesnt work and its obvious There are some really, really rich people that can become even richer if governments swing toward austerity. Lower taxes tend to mean more to the rich than the not rich and the rich can use their now larger incomes to become even more rich. Really that's all it boils down to. It "works" in that governments going big on austerity programs means the rich get short term gains. Of course in the long term it causes problems and reduces the velocity of money because the rich will take the money that they're now getting more of and largely just sit on it like it's a video game scoring system.
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Jul 16, 2015 04:33
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Veskit posted:Lastly, the only way you can be austere is if you have export surplus because you have to not only produce, This is the central contradiction within the that Mark Blyth highlights in Austerity: History of a Dangerous Idea. To boil down a very complex and compelling argument to it's core, Germany's post-war aversion to inflation and centralizing power within the government or cartels allowed them to quickly rebuild an extremely competitive manufacturing sector by keeping wages and inflation artificially low. This led to a fantastic export-based economy but that lesson is impossible to apply to Greece/the rest of the EU because someone needs to buy what you're selling. EDIT: It should be noted that as soon as the going got tough Germany abandoned the strict austerity policy and developed their social safety net.
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Jul 16, 2015 04:36
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ponfed posted:Stop it. As other people said, Germany hasn't had any significant austerity at all. Within the Eu Germany isn't a net exporter. The trade is pretty balanced.
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Jul 16, 2015 04:39
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demonicon posted:Within the Eu Germany isn't a net exporter. The trade is pretty balanced. But outside of the EU they are, so...???
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Jul 16, 2015 04:40
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Abner Cadaver II posted:But outside of the EU they are, so...??? So that means that Germany actually exports most of its stuff to the US and Asia. That means that the argument, that within the Eu some nations have to import everything germany produces is bullshit.
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Jul 16, 2015 04:53
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demonicon posted:So that means that Germany actually exports most of its stuff to the US and Asia. That means that the argument, that within the Eu some nations have to import everything germany produces is bullshit. Ohhh please. PIIGS is like what, 11% of the economy and they have barely any ability to import so yeah the trade will be balanced because Germany lost a huge market to export to within the EU. They can't afford to import anymore.
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Jul 16, 2015 04:59
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Veskit posted:Ohhh please. So if Germany lost a huge market, why did its exports actually increase?
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Jul 16, 2015 05:00
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