Still not sure of your point. Is it
[ul][li]The US national debt doubled under Obama, therefore the EU can’t expect Greece to pay back its loans[/li][li]Greece wasted all their money and didn’t address any of their economic problems, therefore they should be given more money and not expected to address any of their economic problems[/li][li]It isn’t fair to expect Greeks to pay their taxes, therefore they should be subsidized by the taxpayers of Germany, France, the UK, etc.[/li][li]The poor children of Greece will be better off if their banks go bankrupt and their economy collapses[/li][li]American children will starve if the US repays its debts[/ul][/li]Regards,
Shodan
[QUOTE=Kenm]
They’re not in the same boat because the couple next door quietly going about paying their bills can do so because no matter how much they owe, even if it’s more dollars than there are electrons, they can borrow more to pay them.
The guy down the street isn’t allowed to. He has to file for bankruptcy if he and his children haven’t starved to death first.
[/QUOTE]
Well, leaving aside the ‘no matter how much they owe’ part, this is correct. You seem to be missing the point, however. I wasn’t saying they are in the same boat, I’m saying that the situations are analogous between a country that does pay their debts and does keep confidence (thus allowing them to borrow when they need to) and countries that don’t.
Greece has been bailed out with quite substantial amounts of Euros. They can’t really borrow more because their bonds suck and investors aren’t stupid (after all the ‘hair cuts’ it’s hard to blame them either). Greece pretty much did this to themselves, and it’s going to be a long hard slog to get out.
I’m curious about the assertions that children are literally starving in Greece and why this isn’t a EU matter if it’s happening…you would think that no EU member state would be allowed to have it’s children literally starving (to death) in their union, so I’m a bit skeptical about this claim, even though I’ve seen and read the cites provided.
Which means you don’t actually understand a debt to GDP ratio. To use another analogy (that you might not get based on the other one), it’s like saying that Bill Gates spends more money than I do, and then saying that means he’s in real trouble while I’m doing fine. It neglects the fact that he has and makes a LOT more money than I do, which means he can spend (or borrow) a lot more. The size of the debt is only part of the equation…the other part is how much you generate in revenue to compensate for that greater debt, and how much future capacity you have. The US has oodles and oodles of revenue and future capacity and productivity, so we are a good bet for giving a loan to (which is why OUR bonds do quite nicely on the world market :p).
Greece has been running at 100% Debt to GDP since 1995at least. Then jumped to 170%. The U.S. was at around 50 to 60% until 2010, then it jumped to 100%
So, yes the U.S. debt load has increased (to about the highest level you want it to hit) but it isn’t crushing. And we can pay it back if we are smart about it*.
Greece went into the crisis with a debt load that was too high to begin with. So the metaphorical crap hit the fan, they were already in a bad place. At some point, you (even if you is a country) have to pay back your debts. If you don’t and default, all sorts of bad things happen beginning with no one else lending you money. And then you are well and truly fucked.
As a side note, you said:
Which is true in dollar terms, but that is trivial. What matters is the GDP/Debt ratio. Think of it this way, Bill Gates owes someone 10 million dollars. Average Guy on the Street owes someone 1 million dollars. Bill Gates owes 1 thousandth or so of his net worth. AGotS owes 200% of his net worth. Who is in worse shape?
Also, right now on the Debt to GDP scale, the US is doing better than most western countries. Japan is at 237% (Gross government debt, Net 134) while the U.S. is at 106 and 88. Link.
Slee
*Whether we will be smart about it remains to be seen.
The cites AFAICT are rather like cites of hunger/homelessness in the US - long on anecdote but a little short on hard figures or definitions. The only statistic I saw in the NY Times article I was able to read before my browser crashed was that 10% of Greek children were at risk for food insecurity, which is very far from saying that anyone is starving but seems to be intended to be taken as nearly synonymous.
It would be interesting if anyone had hard figures on the incidence of marasmus or rickets or beri-beri or pellagra in Greece, or even how many Greeks are underweight, and how those figures have changed since their economy cratered.
Regards,
Shodan
It might be, but it would be sort of off-topic for this debate, wouldn’t it? Strikes me that whole side bar has been non-productive.
Greece’s debt is only paltry if you look at it in raw terms. If you look at the gross debt to GDP ratio though Greece is quite a bit worse - second worst in the world. Guess which measure economists consider to be important? 
Would Greece be able to work out a repayment plan for their debt if they still decide to leave the Euro? What makes being part of that currency so integral in paying down their debt?
IANAEconomist, but the Euro is worth something since it is backed by more than one economy and many of them are doing okay. IF Greece starts their own currency, then Greece stands alone. Given the history, why would anyone accept Greek currency that will probably be worth less of whatever your currency is by the time you get it to the bank?
They would automatically default if they did that. And they would make a lot of folks very unhappy once they converted their debt from Euros to Drachma, since they could print up as many of those as they wanted and basically pay off the debt in Drachma instead of Euros, which gods know what the exchange would eventually be. Once they convert to their new currency and set what the debt in Drachma would be, they could (and would) then use inflation to magically wipe some of that debt away.
Of course, they’d be fucked once they did any of this…no more bailouts from the EU and no one would loan them money, and their own people (who are already hording Euros in anticipation of just something like this) would be on a basically worthless currency that, due to inflation or hyper inflation is losing value from day one. As ugly as it is now, it would be a hell of a lot more ugly if they go down this path I think.
Simple. The fat-cat countries that continually commit the same sins as Greece while “bailing it out” are loan sharks, and with the same sense of ethics.
Well, I’ll ask you a modified version of what I asked Der Trihs; what’s the solution?
What a loan shark should do is stop loaning money to his marks. That’s the ethical thing. Should the EU therefore stop loaning money to Greece?
That said, I’m not sure you even understand why the Greek economy collapsed. But that aside, what should be done?
Still don’t know what your point is. The fat-cat countries are loan sharks, therefore Greece should not have to address any of their economic problems? Or the fat-cat countries shouldn’t have restructed the Greek debt in 2012?
And if the fat-cat countries are doing the same things as Greece, why do they have any money to lend? Shouldn’t their economies also be on the verge of collapse?
Regards,
Shodan
Not necessarily, because maybe with class sizes so big now, kids aren’t learning as much and don’t grow up to become as smart. With the average IQ of your country so low, smarter people start leaving in droves for other countries. You become a third-world country with no exports. Your tourism prospects are also limited because your citizens aren’t smart enough to serve as tour guides or produce glossy brochures.
It’s all a feedback loop.
I know why Greece is in trouble, and so does Greece.
When the cure is as bad as the disease, it’s time to cut back the medicine, or at least provide a bowl of gruel — but no seconds; Unca Scrooge would shit in his own swimming pool — to blunt the worst of the want and despair.
As to knowing where to stop, it doesn’t take a government expert to know that children — anyone — shouldn’t be going hungry and families tossed into the streets.
Then should Greece address its economic woes, or not?
So they should have restructed the loans once, but not twice. Is that what you’re saying?
Well, that’s a noble sentiment. What exactly does it mean?
Regards,
Shodan
So your solution is a vague non-solution with no specifics other than to “make sure Greek kids don’t starve.”
Yeah, you don’t know the depths of the Greek problem, why they needed a bailout to avoid default, why the Euro partners did bail them out, why Greece is mad at the terms of the bailout, why the Greek people are considering leaving the EU, and why Greece leaving the EU would be the biggest mistake they ever made.
[QUOTE=Kenm]
I know why Greece is in trouble, and so does Greece.
[/QUOTE]
Ok…why are they in trouble? Can you list why you think they are in trouble?
Except that the disease is worse. And they have been provided with several bowls of gruel. So, they have already gotten seconds.
But really, you are saying nothing here. What SHOULD they do? What should they have done? What should the EU do? What should the bankers and investors do?
While this may make some sort of sense to you, it’s gobbly gook to me. Could you perhaps translate this into some sort of English that is meaningful to the discussion?
A lot of things shouldn’t happen. The thing is, do you know WHY it has happened? Do you understand WHAT has actually happened? And do you have anything at all to offer on what Greece SHOULD do (or, wrt the OP, whether Greece should or shouldn’t leave the Euro).
So now I’m wondering why is a unified currency supposed to be ipso facto a “liberal” idea. An academo-technocratic idea, sure, but I’m not sure academo-technocracy is inherently “liberal” either.
I appreciate that at least you don’t claim the financiers act with the intent of making children starve because it gives them pleasure to see that happen (*). They just want their payout and don’t care where it comes from.
The expansion of the EU/Eurozone beyond the original core was a bit too hastily carried out and some of the weaker countries seem to have thought of the access to eurocredit as if it were “found money”. At the same time I don’t think that the thoughts “there should be easy credit, or else all the workers in the poor countries will just pack up and move to the rich ones”, or “there should be easy credit so the poor countries will buy a lot of the capital-intensive goods produced by the rich ones”, or “there should be easy credit so europhile parties can build stuff and hire people and keep winning elections in the poor countries” did not cross the decisionmakers’ minds.
(Seriously, Der Trihs, it does sound like that at times when you get agitated, and one wonders how the bloody hell can you live in a world where most of the institutions are run by monsters and a majority of the population are dangerously mentally deranged…)
As a general matter, it would be fair to say that conservative European governments (small or large C) have been less favorably disposed toward the EU and/or monetary union over the years. Of course, that is not to say that the governments who pursued monetary or political union were necessarily liberal.
And, of course, ‘liberal’ and ‘conservative’ don’t mean the same thing to Europeans (and it even changes a bit from country to country) that it does in the US, and many US conservatives are shocked by the policies and stances of European conservatives. This would be one of those times where US liberals wouldn’t get the connection.