The Greeks have fucked themselves in the ass. Again.

[miles]

No pun intended.

I'm guessing Italy is next. We won't be far behind.

 

[Adre]

Equating the Greek economic situation to that of the U.S. indicates that someone flunked Econ 101 spectacularly.

 

[Disgustipated]

1. That's not a pun
2. It will be Spain
3. No "we" won't. Maybe YOU will when your wife/gift horse leaves you
4. You're a moron

 

[Yardley]

Equating the Greek economic situation to that of the U.S. indicates that someone flunked Econ 101 spectacularly.

Why?.

1. That's not a pun
2. It will be Spain
3. No "we" won't. Maybe YOU will when your wife/gift horse leaves you
4. You're a moron

Why not?

 

[Adre]

Why?.

For starters we have exclusive control of our currency. We do not share it with twenty other nations.

 

[Busybody]

The Greeks gave their answer to their creditors Sunday. Take a good look, young people. This is where quasi-socialism, with unaffordably generous pension programs and early retirement, runaway borrowing and spending, and a kleptocratic unenforced system of tax collection leaves you: helpless, penniless, and crying in the streets.

Retiree Giorgos Chatzifotiadis had queued up at three banks in Greece’s second city of Thessaloniki on Friday in the hope of withdrawing a pension on behalf of his wife, but all in vain. The 77-year-old told AFP that he had broken down because he “cannot stand to see my country in this distress”. “That’s why I feel so beaten, more than for my own personal problems,” Chatzifotiadis said. The image of him sitting outside the bank, openly crying in despair with his savings book and identity card on the floor, was captured by an AFP photographer illustrating how ordinary Greeks are suffering during the country’s debt crisis. Athens had imposed capital controls and shut all banks since Monday to stem a haemorrhage of cash, but on Wednesday allowed some branches to reopen for three days so retirees who have no bank cards could withdraw their pensions — capped at 120 euros. That’s about $132. Imagine being told you’re only allowed to take that out, and God only knows when the banks will reopen. You’ve got money in a safe deposit box?

Tough luck, the left-wing Greek government declares: Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place, a deputy finance minister told Greek television on Sunday. This may seem harsh to the Greeks. But they willingly and knowingly tried to build a society where everyone was allowed to retire early – really early: Early: “Trombone players and pastry chefs get to retire as early as 50 on grounds their work causes them late-career breathing problems. Hairdressers enjoy the same perk thanks to the dyes and other chemicals they rub into people’s hair. Then there are masseurs at steam baths: They get an early out because prolonged exposure to all that heat and steam is deemed unhealthy.

” Really Early: “

The Greek government has identified at least 580 job categories deemed to be hazardous enough to merit retiring early — at age 50 for women and 55 for men… The law includes dangerous jobs like coal mining and bomb disposal. But it also covers radio and television presenters, who are thought to be at risk from the bacteria on their microphones.” Really, really early: “In the public sector, 7.91 percent of pensioners retire between the ages of 26 and 50, 23.64 percent between 51 and 55, and 43.53 percent between 56 and 61.” Yes, in the past years, they raised the retirement age, trimmed pensions, and tried to raise taxes – although because they have a deep-rooted culture of not paying taxes, it didn’t do nearly enough good. Once a people get a taste of unbelievably generous entitlement spending, they begin to feel… well, entitled to it. In the case of Greece, they will demand that they keep getting those benefits long after the money runs out, even as it grows clearer and clearer no will loan them any more money. They’ll vote, overwhelmingly, “no” to bailout offers theone y deem insufficiently generous… ignoring that the alternative is unknown, and probably worse.

Read more at: http://www.nationalreview.com/corner...s-jim-geraghty

 

[Yardley]

For starters we have exclusive control of our currency. We do not share it with twenty other nations.

Because Greece is in a position to drag down the currency that affects the other nation that helps, not hurts them in regards to getting assistance whether outright gifts in the form of debt forgiveness or loans.

Not being able to lean on other countries with the prospect of us dragging them down would hurt, not help the US. As it is, we do (somewhat) have an analogous situation in that the dollar is both a preferred reserve currency (because we are supposedly too big to fail) and the preferred medium of exchange in a lot of very large transactions, such as the oil industry. Oil is sold in dollars, worldwide.

If you mean to say by the fact that we "control" our currency that we can create dollars by simply increasing money supply you are correct. That does not increase the pool of available capital, it merely makes more pieces of paper stand for that same pool. It causes (eventually) inflation. It puts off our day of reckoning, but has nothing at all to do with the fact that we, like Greece pay out more than we take in. That cannot possibly go on forever. At some point the books have to balance. Either Americans will have to pay substantially more taxes or expect substantially less from the government. Take your pick, the tax increase or the benefit reduction is 40% presently.

Greece had that in the past and will have that in the future after they are kicked out of the EU. Greece was untenable when they entered the EU as was Spain for that very reason. They had (among other problems) been devaluing their currency by printing Drachmas for the government to pay off their unsupportable obligations. All that does is devalue the actual purchasing power of the promised pensions.

I asked why because I seriously don't get it. I hear that a lot that "we cannot go the way of Greece." The numbers suggest we are getting close to their problem mathematically, and they reached the tipping point, why not us?

 

[JohnnySavage]

...
I asked why because I seriously don't get it. I hear that a lot that "we cannot go the way of Greece." The numbers suggest we are getting close to their problem mathematically, and they reached the tipping point, why not us?

You poo-poo'd over the answer: We control our money supply. It's just that simple.

 

[Adre]

A friend of mine, a lifelong goldbug, has been warning we are on the brink of disaster for thirty five years. Every time I see him. I'm still waiting. (And I suspect I'm enjoying life more than he.)

 

[Yardley]

You poo-poo'd over the answer: We control our money supply. It's just that simple.

Yes we do. Which enables us to do what Greece did when it controlled its money supply, and what they will be able to do again when they are back on the Drachma, I assume.

How does one of the mechanisms that helped Greece push its "can down the road" and exacerbated their spending programs help us not end up like Greece?

If you line up The Fed's increases n the monetary supply with deficit spending and the very modest increases in the GDP the last several years you will see that the increases are illusionary. One can argue that those illusionary increases were necessary to stave off sharper, short-term economic pain. That doest change the sum total of the pain. We have not grown, without dramtic, and unrealistic growth we have an unfunded liability problem.

We can print money; we cannot paper over the $186,000,000,000,000 in unfunded future liabilities. To put that number in perspective, our annual GDP is running less than 1/10th of that. If GDP remains flat, and we taxed not 100% of profits, 100% of production it would take ten years to fully fund those liabilities. If we had a wildly optimistic growth rate of 15% you could cut the number of years of 100% confiscation to about 6. You would not have to set aside the entire 186,000,000,000,000 today, of course since these are future obligations, but it would in all seriousness take everything produced by every man, woman and child for a couple of years, put into a lock-box that drew interest to solve the problem. The problem is not solvable, politically.

A friend of mine, a lifelong goldbug, has been warning we are on the brink of disaster for thirty five years. Every time I see him. I'm still waiting. (And I suspect I'm enjoying life more than he.)

You have a mortgage which if carried at its market rate would exceed your monthly income by 40%. The thinking in underwriting is you have recently graduated from Medical School and once you complete your residency, you will have sufficient income to meet your obligations at the time the escalator clauses or balloon payment comes due. You lose your medical license and an understanding banker continually extends your note, taking missed payments onto the back of the mortgage and re-amortizing it. You are working in another field but making Medical Resident sized wages. Are you out of trouble?

America has shown it will not cut entitlements, defense, or farm aid. It spends pretty consistently 40% more than it takes in. People are living longer and that has already accounted for any money if had had actually been held in trust for Social Security and Medicare. We have added prescription drugs under Bush and government subsidized insurance premiums under Obama.

Just because a crisis has been delayed 30 years, does not mean it has been averted. I think your time-line is about right, these things were discussed with alarm during the Reagan administration which was, frankly the last chance to get the ship turned around and it did not happen. The retirement age should have been pushed to 70 in 1980. You could have phased it in something like 6 months per year and had sanity by 1990. The moment has passed. Retirees entering the system now will not see their full currently projected benefits. Because mathematics.

 

[Busybody]

https://pbs.twimg.com/media/CJL3TP7WwAANb5u.jpg

 

[JohnnySavage]

Yes we do. Which enables us to do what Greece did when it controlled its money supply, and what they will be able to do again when they are back on the Drachma, I assume.

How does one of the mechanisms that helped Greece push its "can down the road" and exacerbated their spending programs help us not end up like Greece?

If you line up The Fed's increases n the monetary supply with deficit spending and the very modest increases in the GDP the last several years you will see that the increases are illusionary. One can argue that those illusionary increases were necessary to stave off sharper, short-term economic pain. That doest change the sum total of the pain. We have not grown, without dramtic, and unrealistic growth we have an unfunded liability problem.

We can print money; we cannot paper over the $186,000,000,000,000 in unfunded future liabilities.



...

That's where I quit reading. Unfunded liabilities, in a government accounting context, are meaningless. They can be wiped out with the stroke of a pen. Further, the number is puffed up to create hysteria. In government accounting, the assets side of the ledger are ignored. So you can post a huge number in the liabilities column, but what about the unrealized assets?

In government accounting, you can show a trillion dollars as the cost of an Aircraft Carrier, but what is the asset-value of that ship over it's 60 year lifespan? What's the value of all of the land and buildings owned by the government? In a GAAP system, those assets would offset the liabilities. But not so in government accounting. Because... you know, the government is not a business.

 

[Aglaopheme]

https://pbs.twimg.com/media/CJL3TP7WwAANb5u.jpg

Do you have a clue as to how Greece wound up where they're at?

In a word austerity........look it up.

 

[Yardley]

https://pbs.twimg.com/media/CJL3TP7WwAANb5u.jpg

...and since nothing like that fable is told to Americans by politicians on both sides of the aisle, we can never be Greece.

We are Americans. If it becomes necessary, we will just have SCOTUS declare economic law to be unconstitutional. It can clearly be covered by both the the General Welfare Clause and the Pursuit of Happiness Clause. To not do so, would be a violation of the 14th amendment promising every citizen's civil right to be given stuff that they need. Or something.

 

[Yardley]

Do you have a clue as to how Greece wound up where they're at?

In a word austerity........look it up.

That is like saying that an insurance loss was caused by the fireman's hoses, and not the can of gasoline and matches that initiated the conflagration. Yes there was additional water damage, but without it, the entire structure would have ceased to exist.

Austerity was enacted after the horse was out of the barn. They have no money to cover their expenses, they have no way to raise the amount of money that they need. Having no money to pass out is the problem, not the fact that they were too stingy after the money ran out.

 

[Disgustipated]

Why not?

Because I graduated high school.

 

[Aglaopheme]

Well the economists would beg to differ with you.

And, the wealthy not paying their share of taxes.

 

[Busybody]

Do you have a clue as to how Greece wound up where they're at?

In a word austerity........look it up.

yeah, and spelling errors are teh fault of pencils

I have doucmented how they got here

 

[Messier82]

So... No point in us (the UK) letting them have the Elgin Marbles back then, they'll only have to pawn them back to us

There's no reason Greece couldn't have knuckled down and got themselves out of this situation, Ireland had similar problems and are now pretty much home free - well done Enda Kenny.

 

[eyer]

There's only one factor that lends fiat money every ounce of its value:

The confidence in it of the community that trades with it.

It doesn't matter that, or how much, the USSA prints/controls its own currency...

...what gives the $ its value is how much the rest of the world thinks it's worth.

The $ is still the most valued currency on the planet...

...simply because the world still views America as the most stable investment on the planet.

Thus...

...the value of every dollar bill.

When the world's confidence in the $ fades, so does it's value on the world market...

...it truly is that simple.

BTW:

While the mainstream wets itself over Greece...

...the Communist Chinese market - valuator of the so-called second largest economy in the world currently - is tanking big time because its humongously over-leveraged and extremely corrupt financial system makes Greece's look like the banker of a world Monopoly game.

[Note once more that Putin has reached out twice to Obama in the last couple of weeks with "cooperation" on issues...

...Russia is so overly leveraged by "deals" (not $$) with countries which are financially suffering, that if Communist China tanks, Putin will have cut-off his nation from the world's actual market (the EU, the free SE Asia nations, the USSA.

Ie: if Communist China tanks...

...Putin's Novorossiya will tank. too.]

If Communist China's market keeps nosediving...

...poor little socialist Greece's economic cannabalism woes will be naturally put in its proper world financial perspective.

 

[JAMESBJOHNSON]

Parasites believe they can destroy producers and keep eating like always. At some point parasites kill producers then starve, or they destroy other parasites to reduce the burden on producers.

 

[Yardley]

Because China and Russia for that matter control so much including information I have trouble following along with what their monetary policy shenanigans actually are and how they enact them and what the scale of it all is.

The thing about socialism European style is you have all of the economic disincentives for production that are endemic of the big communist regimes, with none of the hoped for synergistic benefits of having control of the means of production, economies of scale and central planning. Not that any of those things have worked anywhere, but in principle, socialism works much better if you go all in, then the half measures.

 

[Busybody]

Parasites believe they can destroy producers and keep eating like always. At some point parasites kill producers then starve, or they destroy other parasites to reduce the burden on producers.

Venezuala

 

[Yardley]

Parasites believe they can destroy producers and keep eating like always. At some point parasites kill producers then starve, or they destroy other parasites to reduce the burden on producers.

Well, common sense as that is, it appears you will get nowhere discussing that here with those sort of labels. Those that are less than fully productive are romanticized as "the little guy" as if it is a noble calling in life to be unproductive. Some people, on a case-by-case basis can be understood for their specific failure to thrive. Bad luck happens and not everyone is endowed by their Creator with equal abilities, but to suggest that huge swaths of people that contribute nothing monetarily to society (and benefit from the labors of others) contain no one at all that contributed to their own circumstances is futile to argue about.

I think there is nothing wrong with taking a compassionate view of the downtrodden, but have people that lead with that never met someone that games the system, never met a lazy person, never met a drug addict or a criminal? That is, of course not even the majority of those that receive more than they produce but it is not a small number by any means.

 

[just4friends]

Perhaps

Going forward I hope they will use referendums to decide whether to borrow again to avoid letting their politicians rob them blind. Hey but great 6 lane highway system!! Built by the Swiss maybe with Albanian labor?
The Greeks helped others suck them dry. The people will continue to pay while their rich lounge overseas with their bribes
How is Goldman Sachs allowed to do business in Europe after helping the Greek right wing hide the debt to get the into the EU? Oh shit.. They were rewarded with controlling Europe's TARP
Why was Siemans CFO not tried for bribery? Oh shit.. Siemans fined him.. And in the end he committed suicide.. How convenient!