|
demonicon posted:So if Germany lost a huge market, why did its exports actually increase?   
|
#
?
Jul 16, 2015 05:08
|
|
|
|
| # ? Apr 20, 2024 02:22 |
|
|
Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that
|
|
#
?
Jul 16, 2015 05:13
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that From the same geniuses that brought you "Trickle Down Economics"...
|
|
#
?
Jul 16, 2015 05:15
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that Debt relief should be so painful as to avoid the "moral hazard" of taking out loans you can't pay. The actual economic justifications seem to have mostly disintegrated on contact with the real world.
|
|
#
?
Jul 16, 2015 05:18
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that 1 - Government spending is inherently wasteful and free market solutions are always more efficient. Reducing it reduces waste. 2 - Reducing taxes puts more money in your pocket because you're paying less. 3 - Reducing taxes puts more money in the pockets of the rich and they'll spend that creating businesses. 4 - More freedom. Removing the government from more things means more freedom. Smaller government = freedom. 5 - Laffer Curve. Reducing taxes actually increases government revenue. Yes the arguments in favor of austerity are stupid.
|
|
#
?
Jul 16, 2015 05:19
|
|
|
"The International Bankers that decide a country's credit are wealthy and austerity makes rich people, especially International Bankers, happy." As an added bonus, people frustrated by the machinations of International Bankers tend to vote hard right, so it further shores up a country's conservative cred.
|
|
#
?
Jul 16, 2015 05:21
|
|
|
In the UK you repeat that it's necessary a lot and promise to mostly make the cuts affect a smaller portion of the active voter base, regardless of its wider effects or how large that portion of the population is.
|
|
#
?
Jul 16, 2015 05:23
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that They appeal to a vague notion of spartan virtue which appeals to small-government nationalists of many stripes. They also have tame economists.
|
|
#
?
Jul 16, 2015 05:24
|
|
|
Okay so Germany increased its exports to markets outside the Eu? So you agree that eu countries don't have to be net importers for Germany to be a net exporter?
|
|
#
?
Jul 16, 2015 05:44
|
|
|
ToxicSlurpee posted:1 - Government spending is inherently wasteful and free market solutions are always more efficient. Reducing it reduces waste. Since this thread already mentioned Germany a few times, It might be worth mentioning that this is a very American / UK view. The german word for austerity actually doesn't mean all these things and no german, when hearing the word "Sparsamkeit" would connect it with reducing taxes and government spending. Austerity for Germans just means being financially responsible with your budget. In fact most Germans would say that "Sparsamkeit" is a good thing while at the same time being in favor of a strong government and high taxes to pay for government and social services. Most would also be in favor of strong worker rights and active participation of employees in company politics and decisions while still being in favor of "austerity" overall. For a german, these things aren't mutually exclusive because the nation is able to stay competitive economically even with a strong government and thus is able to afford all this. In the case of Greece most Germans just don't see an alternative to "balancing your budget" because if you don't have money coming in from outside sources anymore and no money saved up, what really is the alternative to balance the budget?
|
|
#
?
Jul 16, 2015 05:54
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that "A national economy is exactly like a household economy and if you are in a lot of debt you have to tighten the belt." It's dangerous because it's intuitive and emotionally appealing, yet completely wrong.
|
|
#
?
Jul 16, 2015 06:03
|
|
|
So is a civil war in greece quite possible at this point because of Austerity measures?
|
|
#
?
Jul 16, 2015 06:32
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that In bullet-points how I understand it, this is not my area of expertise but so far everyone has refused to make an effort post for you. 1.The governments of Greece have structurally for many years spend more money through various programs than it made and fudged the books to hide this. This meant that the government pretended to have to loan 6% of the GDP each year to cover all its costs whereas in fact they had to loan 15%. ( This is also the reason why the troika insists on making the Greek statistics bureau independent, it used to be pretty corrupt.) 2. There are various reasons why this deficit of 15% is so high. For one, tax evasion (by the rich and middle class) was a national hobby, doctors for instance had no trouble to declare on average paying 107% of their total income on debts. Another example often cited is the very low retirement age (55 years) combined with the high amount of public workers. All these result in a lot of government spending and not so much government income. 3. Greece could continue acquiring these loans for low interest rates due to a high trust in Greece as an European union country with a stable currency, and also because the books were cooked. 4. In 2008 the finance world began to doubt whether or not Greece would actually be able to pay back all these loans, as a result all new and future loans would come at a higher interest due to the higher perceived risk. 5. Unfortunately, this meant that paying for the same amount of public spending that the Greek government and its populace was used to would also cost them much much more, further increasing the deficit, the debt to gdp ratio, the percieved risk for lenders and the interest that others would demand to lend greece any money to continue to pay for its programs. 6. The lack of new loans meant that the greek government could not pay its own programs or its creditors. Had no troika intervened then austerity would have had to have had happened: Greece literally did not have any other means to pay for everything. At this point some form of austerity was pretty much guaranteed. If you structurally spend far more then you make and adjustment in spending will have to follow. 7. To save Greece from default the Troika would, among other things such as a reduction of their debt by 53%, lend them money on a very low interest so Greece could continue to pay for its government programs. 8. As you perhaps can imagine, the troika did make the demand that Greece from now on should stop spending 15% more money than it makes and get it closer to 0%, as overspending is what got them into this crisis. There are multiple ways to do this, one is to increases the taxes and make sure that everyone pays their taxes ( a form of austerity). Another is to reduce public spending( for instance, by increasing the retirement age to 67, also austerity). So far makes sense right? 9. The aim of this austerity would be to balance the books, so that the financial markets would once again feel confident that a greek government that spends only 3% more than it makes can actually repay what is lend to them and therefore would offer normal low interest rates and would not need more assistance. ( See Ireland as an example where this happened) 9. A known risk of austerity is that it leads to unemployment: if old people keep working then there are less new jobs for the kids. 10. Another known risk of austerity is that the people will have less money to spend ( because they know have to pay any/more taxes), this results in a decrease in GDP. 11. The result of 10 and 9 is that although the total debt of a country can decrease because of austerity, the ratio of debt/GDP can increase. 12. The alternative to austerity is an increase in government spending: this increase in spending will result in a higher GDP and can therefore result in a lower debt/GDP ratio. The question is however, should you use borrowed money to do this? Keynes himself, the original anti austerity pope, said that government should save money during the good times (you could call this a period of austerity) so it can spend during the bad times where the people themselves refuse to spend. A country that currently does this is much maligned Germany, it has a boom right now and keeps its spending to an austere surplus of 1% so it can pay for future problems. 13. Greece did the opposite of saving during the good times so it would have to rely on the money of the other European countries to spend during the bad times. The other european countries and its citizens are and were not willing to spend the money to keep Greece at or above a 15% deficit, but set a target maximum for 3% of the gdp. Not a completely unreasonable decision. The result is that austerity had to be enforced to make sure that the government could run a 3% deficit. 14. Greece did after much struggle get a mostly balanced budget, but at the cost of higher unemployment numbers and a substantial decrease in GDP. IAMNOTADOCTOR fucked around with this message at 07:44 on Jul 16, 2015 |
|
#
?
Jul 16, 2015 07:32
|
|
|
demonicon posted:Okay so Germany increased its exports to markets outside the Eu? So you agree that eu countries don't have to be net importers for Germany to be a net exporter? Of course anything doesn't have to be a certain way for something else to be other way. Well yes, 99.9% of the world's countries don't have to be net importers for Germany to be a net exporter (as long they sell one single Mercedes to North Korea and don't import anything).
|
|
#
?
Jul 16, 2015 07:36
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that Austerity is said to increase the confidence of foreign creditors, which lowers the interest rate on Greek government bonds, which pushes the Greek budget closer to being on a sustainable course, which further increases the confidence of foreign creditors, unlocking a virtuous cycle that will continue until Greece's credit is as good as Germany's. It also lowers interest rates across the board in Greece, making investments in Greek businesses and so on more attractive. Unfortunately, cutting government spending during a recession is economic suicide, as has been known for about eight decades, and no matter how many bank holidays the Greek government imposes, it's not really possible to stop capital from fleeing the country.
|
|
#
?
Jul 16, 2015 07:43
|
|
|
demonicon posted:Within the Eu Germany isn't a net exporter. The trade is pretty balanced. Well within most countries it's fairly balanced but Germany is a net exporter, not as bad as the netherlands though. The amount is noticeable when you campare it with other countries. And just lol at the UK and France.  Better graph that I made from Eurostat data. Colours are hideous though argh. 
School Nickname fucked around with this message at 14:36 on Jul 16, 2015 |
|
#
?
Jul 16, 2015 12:17
|
|
|
LeoMarr posted:So is a civil war in greece quite possible at this point because of Austerity measures? A civil war is highly unlikely unless there's some gigantic internal cleavage I'm not aware of but if they aren't allowed to recover they'll keep reshuffling governments until they get one that is willing to default and presumably leave the Eurozone.
|
|
#
?
Jul 16, 2015 13:13
|
|
|
trucutru posted:Of course anything doesn't have to be a certain way for something else to be other way. That's not what being a "net exporter" means. And it doesn't matter anyway, since American debt (both national and consumer) is what is driving the world's economic engine right now.
|
|
#
?
Jul 16, 2015 15:32
|
|
|
TheOtherContraGuy posted:Debt relief should be so painful as to avoid the "moral hazard" of taking out loans you can't pay. The actual economic justifications seem to have mostly disintegrated on contact with the real world. It's important to remember that moral hazard is never, ever experienced by banks, resulting in them making loans they shouldn't have to people that can't pay them back. Only debtors can ever experience moral hazard.
|
|
#
?
Jul 16, 2015 16:09
|
|
|
how am babby formed
|
|
#
?
Jul 16, 2015 17:42
|
|
|
Austerity works perfectly once you understand the actual purpose is different from the stated purpose. The actual purpose is to do away with things you don't like, like "welfare" and "a workforce that expects a decent standard of living." Create a large enough mass of desperate starving people and they'll do your bitch work for pennies. You don't even have to worry about them quitting because if they do there's another 3000 people standing behind them desperate for an income. This has nothing to do with "fixing the economy" in any sense a humane person would want it to be fixed. But if you subscribe to "more money for us; gently caress you", it's very favorable.
|
|
#
?
Jul 16, 2015 17:53
|
|
|
demonicon posted:Okay so Germany increased its exports to markets outside the Eu? So you agree that eu countries don't have to be net importers for Germany to be a net exporter? The Euro allows Germany to export more cheaply and easily than it would be able to with a much higher valued Deutsche Mark. Even if they import more to balance it out, it keeps the factories running and unemployment low, leading to a happier populace.
|
|
#
?
Jul 16, 2015 18:06
|
|
|
demonicon posted:Okay so Germany increased its exports to markets outside the Eu? So you agree that eu countries don't have to be net importers for Germany to be a net exporter? Make a question in which all things are equal please.
|
|
#
?
Jul 16, 2015 18:09
|
|
|
I wonder how many posters in this thread 10 years ago during the Bush presidency complained about how the US national debt was too high. That was a pretty popular opinion back then. If someone has archives (I don't), I bet they'd find some interesting stuff . . . silence_kit fucked around with this message at 20:20 on Jul 16, 2015 |
|
#
?
Jul 16, 2015 20:16
|
|
|
silence_kit posted:I wonder how many posters in this thread 10 years ago during the Bush presidency complained about how the US national debt was too high. That was a pretty popular opinion back then. Yeah, the opinions of a bunch of forum posters 10 years ago would be suuuuuper interesting 
|
|
#
?
Jul 16, 2015 21:00
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that I think for most supporters it's the (erroneous) generalization from personal finances to society-wide finances. If you, personally, are in debt, it makes sense to try to spend less--particularly on things you don't really need--and to save more. The strategy could hold on a society-wide level in some situations. A country with a debt that grows in good times and bad might be spending beyond its means and benefit from some austerity. But even in those cases, an austerity program during an economic downturn will only lengthen the downturn and make both the economic and financial situation worse.
|
|
#
?
Jul 16, 2015 21:23
|
|
|
So I'm so super ignorant in this topic. Greece is heavily in debt and in a financial crisis while the US is deeply in debt but doesn't seem to be on the verge of economic collapse. Is this purely because of political power? The owners of Greece's debt are actually larger than their debtor while the U.S. has its debt spread amongst many lesser economic powers who would suffer majorly if the U.S. collapsed and thus have no interest in forcing the issue? Also, is there a way to merely compartmentalize Greece's current debt with NO further interest? Have them set a new balanced budget that is set to pay back the current debt slowly overtime with no threat of further accumulating interest?
|
|
#
?
Jul 16, 2015 21:58
|
|
|
Uroboros posted:So I'm so super ignorant in this topic. Greece is heavily in debt and in a financial crisis while the US is deeply in debt but doesn't seem to be on the verge of economic collapse. Is this purely because of political power? The owners of Greece's debt are actually larger than their debtor while the U.S. has its debt spread amongst many lesser economic powers who would suffer majorly if the U.S. collapsed and thus have no interest in forcing the issue? One part of the answer is that about 2/3rd of the US federal debt is held domestically by US citizens and institutions, which is even better than than debt held by like Luxembourg.
|
|
#
?
Jul 16, 2015 22:03
|
|
|
Uroboros posted:Also, is there a way to merely compartmentalize Greece's current debt with NO further interest? Have them set a new balanced budget that is set to pay back the current debt slowly overtime with no threat of further accumulating interest? I think you need to take 5 steps backward on how economics works and that'll kind of answer your question, or I am not understanding what you're asking. What exactly do you mean by compartmentalize the debt with no interest? If it's confusing can you draw a comparison to a mortgage?
|
|
#
?
Jul 16, 2015 22:14
|
|
|
Abner Cadaver II posted:One part of the answer is that about 2/3rd of the US federal debt is held domestically by US citizens and institutions, which is even better than than debt held by like Luxembourg. Isn't the U.S. debt actually a smaller percentage of the GDP than Greece's was? I remember reading that the interest on Greece's debt alone was like 60% of their GDP or something insane.
|
|
#
?
Jul 16, 2015 22:16
|
|
|
OwlFancier posted:In the UK you repeat that it's necessary a lot and promise to mostly make the cuts affect a smaller portion of the active voter base, regardless of its wider effects or how large that portion of the population is. UK austerity isn't like Greece austerity, mostly because UK never actually implemented austerity; we've contined to go deeper and deeper into debt, and, shockingly, whenever an election comes around or a tax cut is on the table we find more money, and when it comes to big cuts or privatization suddenly we've run up the national credit card. "Austerity" in the UK is just a codeword for ideologically driven mass privatization; it's Thatcherism with a mildly more current face. As I understand it, export economies just function differently then regular countries, debt functions completely differently (they get it written off much easier, for example) as does inflation. To put it simplier: like with world wars and pornography, Germany, Japan and to a lesser extent Italy are all hosed up and weird.
|
|
#
?
Jul 16, 2015 22:26
|
|
|
Uroboros posted:So I'm so super ignorant in this topic. Greece is heavily in debt and in a financial crisis while the US is deeply in debt but doesn't seem to be on the verge of economic collapse. Is this purely because of political power? The owners of Greece's debt are actually larger than their debtor while the U.S. has its debt spread amongst many lesser economic powers who would suffer majorly if the U.S. collapsed and thus have no interest in forcing the issue? The United States has control over its own money supply; it can weaken the dollar, do quantitative easing, and ultimately just print a ton of money and hand it to its creditors, without Angela Merkel or Mario Draghi getting in the way.
|
|
#
?
Jul 16, 2015 23:55
|
|
|
US also has a pretty good economy. And the IRS is roughly on par with the loving gestapo. If bin laden owed US taxes they'd have found him in a year.
|
|
#
?
Jul 17, 2015 00:08
|
|
|
Uroboros posted:So I'm so super ignorant in this topic. Greece is heavily in debt and in a financial crisis while the US is deeply in debt but doesn't seem to be on the verge of economic collapse. Is this purely because of political power? The owners of Greece's debt are actually larger than their debtor while the U.S. has its debt spread amongst many lesser economic powers who would suffer majorly if the U.S. collapsed and thus have no interest in forcing the issue? As Hobologist said the problem is that they owe other people Euros and they can't print Euros like the U.S. could with dollars. They actually need to produce goods to pay back the debt but their economy stinks and austerity and crisis made it far worse. Of course other countries could forgive their debt or stop charging interest but they simply don't want too. They want their money back and the interest too.
|
|
#
?
Jul 17, 2015 00:50
|
|
|
How much of the original Greek debt was "real" debt (money received as loans) and how much was fake debt (Rollover fees on loans, authorized by corrupt politicians in exchange for a cut of the loot)? The latter should never have been repaid, but of course it was.
|
|
#
?
Jul 17, 2015 03:43
|
|
|
Harik posted:How much of the original Greek debt was "real" debt (money received as loans) and how much was fake debt (Rollover fees on loans, authorized by corrupt politicians in exchange for a cut of the loot)? The latter should never have been repaid, but of course it was. Considering Goldman Sachs was cooking their books, probably a lot was the latter.
|
|
#
?
Jul 17, 2015 04:59
|
|
|
Bwee posted:Can someone please explain the pro-austerity argument, I understand that it's a "rich get richer" thing but they can't sell it like that 
|
|
#
?
Jul 17, 2015 07:42
|
|
|
 I love that line just blow up.
|
|
#
?
Jul 17, 2015 09:02
|
|
|
Mark Blyth probably explains this better than anyone here will: https://www.youtube.com/watch?v=JQuHSQXxsjM
|
|
#
?
Jul 17, 2015 09:07
|
|
|
|
| # ? Apr 20, 2024 02:22 |
|
|
Paul Ryan has the cure for death and he's going to use it to blow up the economy with debt.
|
|
#
?
Jul 17, 2015 09:46
|
|
