A question for all the Greece-austerity haters: What is your counter-proposal?

[DetlefK]

Greece's debt and deficit were way, WAY beyond the stabilization-criteria agreed upon when the Euro was implemented.
The criteria for entering the euro were a national debt of <60% of gross domestic product and a deficit of <3% of gross domestic product. Greece had 104% and 6%. Nobody believed them when they claimed that they matched the criteria, but on the other hand the greek finance-ministry still mainly operated with paper records, making it extremely difficult to double-check this. Not to mention the legal trouble of demanding insight into the files of a sovereign nation's ministry.

So, once Greece was inside the Eurozone, they came clean, right?
Not quite: They engaged in some creative book-keeping with aid from Goldman Sachs to hide their debt. Postponing expenditures into the future, counting future earnings as income in the present...
Then the recession came and their house of cards collapsed.


Now, my question:
Do you really think, force-feeding Greece money would have encouraged them to stop the cheating and the lying and the bribing and the corruption and the cronyism and the large-scale tax-evasion and the red tape?

[HassleCat]

1. Interesting bed fellows

You mentioned the name Goldman Sachs. Considering what they did to us, and how we rewarded them in return for screwing us, it's only natural they would tell the Greeks, "Hey. Don't worry about it! The worse you do, the better you'll come out in the end!"

[hifiguy]

63. Goldman made a mint selling Greece worthless securities

and leveraging the shit out of the country.

Goldman should be smashed into pieces so small it can never be reassembled. Hanging a few of the chief fraudsters would also be a damned good idea.

[polly7]

70. Absolutely! nt.

[geek tragedy]

2. I think those making a big morality play out of this on either side are making a mistake.

It's not evil German bankers vs lazy, lying Greeks.

It's about the incompatibility of "One Eurozone, everyone's in it together" with the obvious conflict of interests members such as Germany and Greece have.

If you're going to have one economic unit, everyone has to be in the same boat and play by the same rules. It's obviously not in Greece's interest to play by the same economic rules that Germany and France play by, by the same token it's not German and France's interest to treat Greek pensions and welfare payments as their obligations.

Greeks don't want Germans telling them what to do with their pensions, and Germans don't want to subsidize Greek retirements at 63 when their own retirement age is 69.

[Adrahil]

3. I think this is right....

The eurozone was never a good idea. The European economy is just too heterogeneous. It's bound to unravel a bit and it will be messy.

But ultimately, austerity typically makes things worse. And economy cannot grow out of trouble when all the stimulus is sucked out of it.

But it also can't spend itself into oblivion. There is bound to be some pain here, but I'm inclined to think the Greeks should just get it over with, drop the euro, write off some debt and build an actual sustainable economic model, that doesn't include oppressive debt payments. I can't really see anything else that will work. But it will take discipline to develop an affordable long-term model.

[MohRokTah]

7. A confederacy of nations never really works.

Without a strong central government, such unions can never stand long. The US learned that from the lessons of the Articles of Confederacy and the lesson was reinforced with the failure of the Confederate States of America. Releasing central authority doomed them to failure in their endeavor.

[stevenleser]

9. Your post and post #6 below together make the most sense. The problem is the party in power in

Greece, along with their supporters in and out of the country, ARE making it a big morality play. Moreover Syriza and Tsipras don't seem to have much of a plan either way.

[geek tragedy]

18. Plenty in Germany also want to teach the Greeks a moral lesson about sobriety and

restraint.

No shortage of people who have handled this poorly.

Maybe Obama and Yellen get the most praise for keeping us out of this.

[stevenleser]

23. I think the bigger reason German citizens are upset is that they are being asked to bailout Greece

when German citizens are on average and by median have less wealth than Greek citizens. Germans also have to work longer before retiring.

I think the citizenry of any country in that position would be wont to moralize a bit if asked for money.

[truebluegreen]

76. No, they are being asked to bail out Greek Banks.

And I find this statement--"German citizens are on average and by median have less wealth than Greek citizens"--very hard to believe, especially given 7 years of austerity, a tanked economy and 25% unemployment.

ETA: "on average and by median"? If your chart is accurate, the mean (average) is lower in Greece than Germany; the median is higher--which to me reflects a more egalitarian Germany, so imo your statement is half wrong and wholly misleading. otoh I'm lousy at math.

[stevenleser]

78. They don't make that distinction. I was there not that long ago and German citizens are pissed off

about it. They are annoyed at the amounts that Merkel agreed to two years ago and have zero interest in providing more.

[PETRUS]

44. Lies, damn lies, and statistics.

Why do you persist with the retirement age talking point even after you've been told why it's misleading? Germans get much more time off during their working lives. A career in Greece is around 80,000 hours of work, vs. only 65,000 or so in Germany.

[geek tragedy]

45. Well, if you're going to the well of unsourced statistics, one should point out

that household wealth in Greece is much greater than that in Germany.

[PETRUS]

46. Ah, right a source.

You can find the relevant data here: http://stats.oecd.org/

Re household wealth: I remember reading about that, and thought that was misleading too (Hint: it involves the difference between the mean and the median.) And are we measuring before or after taxes and transfers? What about wealth held by government and businesses? And what's the relevance to this discussion?

[Democat]

104. Why are German taxpayers evil in the eyes on many on DU?

If German middle class or lower class taxpayers don't want their taxes spent on bailing out Greece, they must be evil.

[geek tragedy]

110. It's the classic victim/villain archetype

Amongst many on the left, the assumption is: debtor good, creditor bad.

Creditors are guilty of two crimes under this model: lending money, and refusing to lend more money.

[magical thyme]

4. "Nobody believed them..."

but they let them in anyway.

Not unlike our liars loans mortgages.

And just like with our liars loan mortgages, the banksters were bailed out and bonused, and the 99% were stuck with the tab.

The Greek people are as responsible as we are here in the US. But where they fail to enforce their tax laws, we just make it legal for the 1% to not pay taxes.

They are as responsible as the Icelandic reindeer herders were for the 1% bankers. And they should do what Iceland did -- default, jail their criminals, tell the troika to shove it and move on.

[GliderGuider]

10. Bingo! That's the appropriate comparison here.

Vampire squids and all.

[hill2016]

13. so

do you agree that Europe should stop lending them money from now on? Since lending money is taking advantage of them?

[magical thyme]

20. yup. let them go. by all means.

I think the current Greek government wants to leave the EU, but the majority of Greek people aren't there yet. The Greek government is buying as much time as possible to 1. prepare for default and exit, and 2. enable the population to prepare for default and exit.

The meetings with Putin weren't golfing vacations. They've already signed an agreement to allow Russia's gas pipeline (the alternative to the Ukraine pipeline, which has been abandoned) to pass through Greece. Who knows what other business deals are under discussion.

The actions of the troika ensured there would be no recovery by destroying Greece's already damaged economy. There is no way forward with continued austerity. Only a slow exanguination.

Make the break, then stop the hemorrhage. Only then can there be a way forward for Greece.

The fact is, though, that Europe can't afford to let them go. They were trying to make an example of Greece, but have suddenly awoken to the fact that Greece is just the first in a series of dominos that will unwind the Euro.

[polly7]

33. +1,000,000 nt.

[polly7]

39. They've also been negotiating with BRICS, and China has said they would help, as well as Russia. nt

[DetlefK]

80. So, what exactly did the creditors do wrong?

And I think it would be bad for a country with massive debts (debts it openly admits it will never be able to repay) to be forced to suddenly stand on its own feet again. What does Greece have to offer to investors? Agriculture, tourism and a "complicated relationship" with paying taxes.

[magical thyme]

93. failure to follow due diligence

It used to be that if a business didn't follow due diligence, they paid the price. It's one of the risks of doing business. You don't follow due diligence, you lose.

That was, of course, before we had the financial industry owning governments everywhere. Now, they blow up an economy, the little people lose.

Greece is bankrupt. In the olden days, one could declare bankruptcy and the creditors shared the losses because they took on risk in making the loans. The loans were re-written to be payable and then paid off.

These days, business believes it is above taking losses. Everybody loses except them because they have become sacrosanct.

So Germany continues to force Greece to buy a bunch of weapons it has no use for, and to pay for them by stealing pensions from the elderly. That's what the EU is -- a bunch of rich thieves forcing a country to stick to a bad deal that a former corrupt leader stuck them with. Well fuck the EU.

The entire western world is bankrupt at this point, courtesy of totally corrupt, bought and paid for government owned by the financial industry. Why do you think Yellen can't raise interest rates? Do you think the US can ever pay its debts?

[DetlefK]

94. Wait, how is Germany forcing Greece to buy weapons?

No offense intended, but your approach sounds paranoid to me: You make it sound as if all the bad things in the world happen because bad people make them happen on purpose.

[magical thyme]

98. a previous corrupt government made weapons purchase deals. they refuse to let them out of the deals.

It continues to today. But call me paranoid if it makes you feel better.

http://www.theguardian.com/world/2012/apr/19/greece-military-spending-debt-crisis

German 'hypocrisy' over Greek military spending has critics up in arms

"Just under 15% of Germany's total arms exports are made to Greece, its biggest market in Europe," Papadimoulis said, reeling off figures from a scruffy armchair in his party's parliamentary office. "Greece has paid over €2bn (£1.6bn) for submarines that proved to be faulty and which it doesn't even need.

"It owes another €1bn as part of the deal. That's three times the amount Athens was asked to make in additional pension cuts to secure its latest EU aid package."

According to the Stockholm International Peace Research Institute (Sipri), France is not far behind. Some 10% of its total arms sales go to Greece, which is a member of Nato. From 2002 to 2006, Greece was the world's fourth biggest importer of conventional weapons. It is now the 10th.

"As a proportion of GDP, Greece spends twice as much as any other EU member on defence," said Papadimoulis, who is also a former MEP.

"Well after the economic crisis had begun, Germany and France were trying to seal lucrative weapons deals even as they were pushing us to make deep cuts in areas like health."


https://dearkitty1.wordpress.com/2014/01/04/buying-german-french-weapons-bankrupts-greece/
Buying German, French weapons bankrupts Greece

While Angela Merkel of Germany and other Thatcherite politicians in rich northern European countries insist that the Greek government should cut spending on “useless” things like health, education, and art … Ms Merkel and other pro-big business politicians have contributed greatly to budgetary problems in Greece.

They have insisted that the Greek government should spend more on war … sorry, I should use the Newspeak euphemism “defence”. They have insisted that the Greek government should buy more German, French, etc. weapons.

Both NATO and the European Union put pressure on their member countries to spend more on war “defence”. In the case of Greece, because supposedly an invasion threatens by some imiginary non-NATO enemy army? Even the most cunning military-industrial complex lobbyist would have a very hard time making people believe that. There are military tensions with a NATO ally of Greece: Turkey. Meanwhile, NATO pressures Turkey as well as Greece, to buy more weapons, increasing those dangerous tensions.

[polly7]

100. +1000. nt.

[itcfish]

117. German 'hypocrisy' over Greek military spending has critics up in arms

German 'hypocrisy' over Greek military spending has critics up in arms

http://www.theguardian.com/world/2012/apr/19/greece-military-spending-debt-crisis


German arms firms in bribery claims over sale of Leopard tanks to Greece
http://www.independent.co.uk/news/world/europe/german-arms-firms-in-bribery-claims-over-sale-of-leopard-tanks-to-greece-9029546.html

The Submarine Deals That Helped Sink Greece

http://www.lepointinternational.com/it/politica/europa/550-the-submarine-deals-that-helped-sink-greece-.html

http://www.wsj.com/articles/SB10001424052748703636404575352991108208712

[1939]

86. A pipeline????

Since Greece is, by shape, a peninsula, why would a pipeline do anybody any good? I can't imagine a pipeline in Greece that would do anything other than be a distributor to the Greek market. No way a "throughput" pipeline would be of any advantage.

[magical thyme]

92. You'd have to ask Putin

Russia and Greece signed a deal Friday to build an extension of a prospective gas pipeline that would carry Russian gas to Europe through Turkey. Russia promised Greece hundreds of millions of dollars in transit payments yearly if it agreed to build the pipeline. Construction of the pipeline is expected to start next year and be completed in 2019.

Russian Energy Minister Alexander Novak said Russia and Greece would be equal partners in the project, with Russia's half owned by the state bank VEB.

The talks were held after both leaders addressed investors and Russian government officials at Russia's biggest annual economic forum.
http://abcnews.go.com/International/wireStory/greece-signs-deal-russia-build-gas-pipeline-31882897

[magical thyme]

108. fwiw, I'm going to guess that the advantage is alternate access to the western European market

from Greece on through to Italy. That's what the map projections show.

Right now, Germany has a monopoly via the North Stream project. This will end Germany's monopoly and keep control of the gas flow to Europe in Russia's hands.

[hifiguy]

64. Yep. Selling loans to people or countries you know cannot pay them back

is fraudulent. You purposely go out of your way to make bad bets while skimming your vigorish off both ends of the deal, banksters, and the only ones who should be on the hook are the shitheels you see in the mirror each morning.

[HooptieWagon]

5. I don't know most of the details...

...but one item I've read in several reports is that Greece has a high percentage of high income citizens ducking taxes, and the various govts have done nothing to combat it. True? That would seem a good place to start.

[madville]

12. Wouldn't even make a dent at this point

They have dug a hole so deep now that the only way out is to default and start over.

[magical thyme]

21. the difference between the 1% in Greece and the 1% here

is that we made it legal for our 1% to not pay taxes.

The reason we are not in the position of Greece is because we can print our own currency.

[pampango]

26. It has been quite legal for Greece's 1% not to pay taxes. Even their consitution

exempts certain members of their 1% from taxation.

For decades the Greek 1% escaped taxation and while their government borrowed money from elsewhere to finance government expenditures.

Tax exemptions

There are several cases of Tax exemptions under the Greek taxation system, these are as follows:

Proceeds from the sale of shares that are traded on the Athens Stock Exchange.
Income from ships and shipping.
A dividend received from a Greek company.
Capital gain from sale of a business between family members, as defined by law.

https://en.wikipedia.org/wiki/Taxation_in_Greece

Greek shipowners warn SYRIZA against abolishing tax break

Greek ship owners who remitted more than $175 billion in untaxed earnings to the country in 10 years say they would relocate the businesses if a new government scraps the fiscal exemption, risking as many as 60,000 jobs.

The country’s estimated 762 vessel owners pay no tax on international earnings brought into Greece under rules incorporated in the country’s constitution since 1967. The SYRIZA party, which opposes Greece’s international bailout and is shown by polls as vying for first place before a June 17 election, says it wants to abolish the tax break.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_12/06/2012_446527

[riderinthestorm]

6. The past is the past. The troika and Greece can only move forward from here

It's extremely hard for a leadership in Greece to form around a platform of necessary changes.

Austerity has failed but it did let the world know, and the Greek people know, that the leadership of Greece recognized that their past policies were not sustainable. Austerity as it was done was a poor choice. But it was arguably better than pretending the checks from overseas were going to forever prop up their failed model. Austerity has done real damage. While we can only imagine the effect of Greece losing in a showdown with its creditors, had it chosen to do nothing, it's not hard to envision utter chaos as all elements of their financial sector crumbled once losing their support

There were better choices, but the obstacles to putting together better packages were enormous. I think Greece missed an opportunity, earlier on, by not targeting the large numbers of middle class people who scoffed at the idea of paying their share of taxes. I think if Greece had shown earlier on that they recognized what was so blatantly wrong with their economy, and were actively and very publicly taking serious steps to correct them, then Greece would have been in a better position today in so far as having a trusting relationship with foreign lenders.

Foreign lenders, for their part, are much less connected to the irrationality of political demands and should have gotten a handle on this much sooner.

Greece needs to have their economy structured around growth. A large package of loans, interest reduction, and long term repayment restructuring, could be the catalyst for that. In exchange Greece needs to come up with a solid plan that won't repeat the well known mistakes of the past. Such a plan needs to recognize their dire straits, and it needs public approval.

The loans, and this last chance restructuring, should be conducted as seriously and realistically as used to be the case during SALT negotiations, and other similarly serious matters. The standards that both sides are held to should be that high.

Like with SALT, good faith goes a long way. For example, in exchange for some limited funding, and lower interest rates, Greece could devote some of that cash to hiring enforcers of the tax code, and actually collecting money from the worst offenders. To paraphrase what has been said here and elsewhere, foreign governments can't have their workers thinking their tax dollars are going to pay Greek workers more than they are getting. 99% of the time that might be an unfair characterization. But the Greek government did help create it, and now their actions have to continue its undoing.

http://www.democraticunderground.com/10026919918
Babel_17's post #76

[Taitertots]

8. Your question is irrelevant.

My question is: Why pursue austerity when it's a proven failure?

My counter proposal is: The ECB needs QE for Greek debt, zero % interest rate loans, and direct cash transfers from other EU nations.

[stevenleser]

11. Hard to convince citizens of any country to give money away to a country who is in trouble at least

in part because they don't enforce their tax laws, allowing various citizens to not pay, and who lowered their retirement age to an age lower than that of the citizens of the countries being asked to bail them out.

Also consider that the average and median wealth of Greek citizens is higher than that of, for instance, German citizens, and you have a toxic recipe in terms of asking for bailout money.

[hill2016]

16. why just from the EU nations

Why shouldn't the US give direct cash transfers?

[Taitertots]

38. Because the EU has a shared currency

And the US has it's own money.

[geek tragedy]

19. And if voters in Germany and France reject the idea of giving Greece money

out of the kindness in their hearts?

[jwirr]

35. Because like it or not they are connected.

[geek tragedy]

36. So, the fact that they're connected means French and German citizens just hand

the Greeks a blank check?

Sounds like a good reason for them to welcome the Grexit.

[jwirr]

57. I have read that if Greece exits the EU that it will callapse. That means all of them. As to a blank

check is that what they are asking for? I thought they did not want to use austerity (trickle down economics) to help fix their economy. Since it has never worked anywhere else I can't say I blame them. The alternative to trickle down is Keynesian economics and I suppose you could call that a blank check but there is proof that it works.

[geek tragedy]

58. The EU is not going to collapse if Greece leaves. However, it will collapse if countries

can ignore its internal rules and demand boatloads of cash by threatening to default and leave the currency.

And that's where Tsipras overplayed his hand.

[Taitertots]

41. then France and Germany can deal with the default/Grexit

And it will be obvious that the shared currency failed because French and German voters won't accept the practical realities of a shared currency.

[geek tragedy]

42. What are the practical realities of a shared currency?

That Germany and France have to cut every other member of the EU a blank check?

Note that no other countries in the EU are taking Greece's side in this. Not Italy, not Spain, not Portugal, not Romania, not Bulgaria.

[Taitertots]

48. Monetary policy needs to be expansionary enough...

To prevent deflation/internal devaluation in the weakest nation.

Fiscal policy needs to be expansionary enough to prevent deflation/internal deflation in the weakest nation.

[geek tragedy]

49. Or, in the view of the Germans, that the poorer countries who sign up have to suck it up

and align their monetary and fiscal policy to the rest of the Eurozone.

[Taitertots]

50. That is an opinion which leads to inevitable collapse

or as Paul Krugman puts it "it's been obvious for some time that the Euro was a terrible mistake"

[geek tragedy]

51. Well, admitting Greece certainly was. As was letting it get away with fraud all those years nt

[Taitertots]

55. That's irrelevant. What are they going to do now?

Keep in mind that austerity and tight money are certain to make the problem worse.

[geek tragedy]

56. They're going to play extreme hardball with Greece.

Because, otherwise every time a country experiences some down time, they can threaten to default, leave the Eurozone, unless they get their way, in the form of being allowed to opt out of Eurozone policies on debt, taxation and spending, plus of course you guys better pony up $250 billion.

Tsipras went from trying to cut his country a better deal to trying to unravel the entire fabric of the EU and Eurozone.

From their perspective, they're better off with Greece leaving than rewarding its threat of leaving the Eurozone and defaulting.

[Taitertots]

59. "some down time" = depression level contraction

From what you've said:
The Germnans are intentionally sabotaging ("play extreme hardball&quot Greece so that the next country that needs expansionary monetary/fiscal (M/F) policy won't try having expansionary M/F policy.

I believe the human cost of intentionally destroying Greece (to Greece and the rest of the world) outweighs the potential moral hazard concerns. The moral hazard argument is absurd because it assumes that nations will intentionally cause great depression level contractions to get monetary relief.

Think about the US. Do States intentional sabotage themselves to get aid from the federal government and/or the Fed?

[geek tragedy]

61. US states lack the legal capacity to declare bankruptcy.

They have no choice but to pay their debts.

Also, they have to deal with the Supremacy Clause.

This isn't Germany vs Greece. This is the rest of the Eurozone vs Greece.

Tsipras is playing chicken with the EU and Eurozone. He's certainly willing to risk the Grexit and the humanitarian costs.

If you allow each state to pursue its own monetary policy, you don't have a common currency.

The rest of the Eurozone countries do not think Greece is worth blowing up the Euro.

[DetlefK]

81. HAHAHAHAHA!

Remember what Wall Street did during the recession when the US gave them piss-cheap loans to pay off their debts?
THEY INVESTED THE MONEY INSTEAD OF PAYING THE DEBT.

And what do you mean with "direct cash transfers"?

[GliderGuider]

14. This is not just a Greece/EU problem

What we're seeing here is the thin leading edge of a much larger problem related to the inherent financial unsustainability of the entire interlocked global economy.

All the debate over the best response in this situation amounts to arguing over what colour of bandaid one should put on a world-sized sucking chest wound.

Ultimately, the laws of thermodynamics, ecology and systems science say that the whole edifice has to come down. We will all get to play our parts in the dissolution. So while we can (and should) weep for the Greeks who are taste-testing the bitter stew, our turn is coming.

My preference is to let the fustercluck unfold however it goes - you can't second-guess reality.

[sendero]

69. Exactly...

.... blaming this all on Greece is pretty bogus. Several other countries are in more or less the same boat, and there will be remedies OTHER THAN "debt repayment" for all of them because "debt repayment" is simply not possible under any scenario, austerity, breakaway, you name it.

This is all about central banks and international organizations handling money badly and now wanting the plebes to pay instead of them. Not going to happen.

[itcfish]

15. Let German Pay

Restitution for WWII that Greece forgave with interest. Germany should stop forcing Greece to buy all their military equipment from Germany. Greece does not need such a large military (sound familiar?)

[hack89]

17. Greece wants a larger military

they still view Turkey as an enemy.

[geek tragedy]

27. And if the Germans refuse?

People forget that Germany is a sovereign nation, not an investment bank that can be regulated.

[stevenleser]

32. And as this graph shows that median wealth in Germany is less that of Greece, it would be

understandable.

[itcfish]

115. Greece Forgave Germany's

Debt after WWII. They would not be where they are today if the European countries didnt forgive Germany's debt and damage.

[geek tragedy]

116. You mean that 'debt' that Greece was trying to collect 2 months ago?

That 'debt' is a talking point. Not an actual legal obligation. If it were, Greece would have collected on it long ago.

In any event, not up to you, or to me, or to any American, or to any Greek for that matter.

Germany is a sovereign nation, its government is accountable to German votes.

[DetlefK]

82. Germany is forcing Greece to buy military equipment from Germany? WTF?

How THE FUCK is Germany forcing Greece to buy stuff?

The greek military was actually a major reason for their debt because they always wanted the newest stuff while Turkey bought used equipment.

[Dyedinthewoolliberal]

22. How is the average man and woman in Greece

supposed to react to these stories of high level finance hanky panky?

[mmonk]

24. Austerity is stealing a nation's assets while limiting revenues and tearing down safety nets.

What's yours?

[DetlefK]

83. I notice that you don't have a better plan of action than austerity.

[KingCharlemagne]

25. A simple three-point plan:

1) Declare any and all Greek debt owed to the ECB, IMF and other agencies of international capital "null and void."

2) Expropriate the means of production from the Greek bourgeoisie and place it in the hands of the Greek proletariat. From each according to his or her abilities, to each according to his or her need.

3) Organize local self-defense forces and militia to defend against imperialist aggression by the U.S. and northern EU partners.

[geek tragedy]

28. so, revert back to an 18th century agrarian society?

I guess Greeks don't need stuff like cell phones and computers.

[KingCharlemagne]

29. Well, I guess the German and French bourgeoisie don't need to summer in the Aegean either,

come to think of it.

[geek tragedy]

31. No they don't. The Greeks will miss the tourist dollars a lot more than

Germans who travel to Spain's Costa del Sol or Italy's Ligurian coast or the Riviera would miss Greece.

[KingCharlemagne]

95. News flash: Germans and French will continue to visit Greece and will contine to spend

Euros there (or see them exchanged into Drachma). Your concern about Greeks' cell phones, while touching, seems a bit overwrought.

BTW, I hardly think Greeks will miss "the tourist dollars" (although your Freudian slip speaks volumes).

[geek tragedy]

96. Greece's economy depends on tourism

Who knows what kind of unrest and violence Greece will experience? Can't imagine German tourists feeling particularly safe, as there'd be double incentive for them to be targeted.

And then there's the immigration/currency exchange uncertainty.

[KingCharlemagne]

97. I'll grant you that tourism, at least in the short term, may take a big hit. However, the

beauty of the Greek islands, the warmth of its people and the cultural patrimony it has bequeathed to Western civilization should ensure that visitors will continue to visit after the consequences of the Grexit have manifested themselves.

[geek tragedy]

99. Eventually. nt

[stevenleser]

30. Yep. The Khmer Rouge called, they want their policies back. nt

[socialist_n_TN]

74. Being Maoists (an offshoot of Stalinism), the Khmer Rouge....

would never have advocated any of those policies. In fact, the only ones who ever advocated those policies were the original Bolsheviks and the Trotskyists. The rest of the so-called "Communist" countries were degenerated or deformed states advocating a form of bureaucratic centralism, aka, Stalinism. Certainly not actual workers' power in society.

[mmonk]

37. You mean like we were when we created the middle class?

We didn't have all these deficits and stagnant wages.

[geek tragedy]

40. when did we create our middle class and how did we do it?

I must have missed the Marxist phase of US history.

[Adrahil]

52. LOL..... yeah. That'll work!

Some of you folks here crack me up.

Advocating a communist revolution...... how very 1960's.

[socialist_n_TN]

73. Advocating neo-liberal austerity. How very 90s......

1890s that is.

[hughee99]

62. "From each according to his or her abilities, to each according to his or her need."

Exactly right. It's time the Greeks stepped up and demanded that the Germans send them money! The Germans have it and the Greeks need it.

[KingCharlemagne]

67. The Germans should pay the Greek massive reparations for World War II and what Hitler

and Mussolini did to the Greeks. Not that I'm holding my breath, mind you.

[polly7]

71. Yep! nt.

[hughee99]

79. Why does any of that matter if it's from each

According to their ability?

[socialist_n_TN]

72. Agreed. eom

nm

[jwirr]

34. Simple: The difference that exists between trickle down and Keynesian economics. Between

Hoover and FDR.

The trickle down theory including austerity has been tried for over 30 years and it has not worked but yet that is exactly what the bankers want to do one more time with Greece. On the other hand we all know that the Keynesian theory worked for us and in recent years it has worked for Iceland.

But of course bankers will be bankers - they have never liked the Keynesian method of recovery because it works for all levels of society. Trickle down only works for the 1%.

[DetlefK]

84. I notice that you have no proposal of what actually to DO.

[jwirr]

114. The actions need to be specific to Greece. I agree that the wealthy in Greece need to start paying

some real taxes otherwise the whole burden will fall on the shoulders of the poor and it is my guess that the poor were not at the table when Greece borrowed all this money or when Greece made the decisions that got them into this troubel. Nor did the poor make the profits off of that money.

I do not believe they should cut vital social programs because once again that makes the poor responsible for the acts of the wealthy profiteers. They could withhold those social programs from the wealthy in order to save money but I am not sure that would be good in the long run.

What specific actions of the government and the wealthy caused this crisis - deal with that on their level - again the poor did not cause this. Illegal actions - fine the criminals to pay for the loans even if they are too big to fail. Profiteering - fine them as well.

Use jobs programs and other Keynesian programs to get the economy going again. In this I give no suggestions because I am not familiar with the needs of Greece: infrastructure? Alternative energy?

The problem in the long run is that the bankers in the EU never planned for a down turn in any economy. Or at least they did not plan what to do if some of their members fell on hard times. It was not part of their great plan. Their only plan assumed that everyone would get rich quick.

And I think we need to stop talking about just Greece because we miss the point. Not all areas start out on the same basis and do not have the same resources. (Kind of like large families in the US years ago - Dad helps the older kids get set up and they do fine but by the time the younger kids time comes Dad is still helping the older ones and has less to help the others - they end up being the poor branch of the family). Yet the bankers use the same playbook for them all. There are at least 5 countries that I know of who came in with less than England, Germany and France and they are all having trouble. There is more wrong here than just someone who is not paying their bills - someone made a risky loan. And there is a trend.

If their bankers over there are like our bankers they do not consider the real needs of the country (let alone the people) and borrow money on a basis of THEIR plan for the country not on the basis of the real needs or ability to pay the money back. Banks often borrow more than the applicant can pay back and are angry when it is not paid back. I am assuming that you see nothing wrong with this. There need to be better regulations on banks and lenders.

As to selling the assets of the country - how does that help the country get up on their feet again? I am thinking of Argentina and Detroit with the sale of their water supplies to the bankers. Why not take a look at who profited from these loans and make THEM pay? In both of these examples it is the poor who got the responsibility of paying. If this was the plan for settling this issue from EU then they should collapse because they are actually dangerous.

Iceland IMO did exactly what should be done in this case - they went after the bankers not the people. But of course EU is the banker. They let the country deteriorate while they collect their money from the poor.

Since I am not an economist I am just looking at history and thinking about the needs of people all over the world. What we are seeing is the future in this crisis. Slavery for the poorer people of all nations and more profits for the wealthy. More wealth inequality. Globalization on a regional scale. Corporate rule. And in fact that is the goal of organizations like EU, IMF, WTO, etc. We are never going to be able to fix these problems until that changes.

[mother earth]

43. Austerity haters realize austerity is failed policy meant to further suffering and continue

predatory capitalism.

[DetlefK]

85. I notice that you have no proposal of what actually to DO.

[Recursion]

47. Well, higher Eurozone inflation is part of my counterproposal

I think the ECB should target a nominal growth of around 4%. At this point it's too late to help Greece, but it could do a lot for Portugal and Italy.

Basically, German bondholders will need to take something of a haircut.

[DetlefK]

87. Making savings worth less so Greece's debt is worth less?

I have doubts about that.

[Recursion]

90. I didn't say it was a great idea

But I don't think Europe is looking at several bad choices here.

[upaloopa]

53. We should have austerity for the creditors.

When the people took the hit to me it was unfair since most of them never benefited from the loans.
So now it is time for creditors to take the hit. You can't squeeze the people any more.

[hunter]

54. Yep.

Keep the small accounts liquid and the ATM's open. Have no sads for the corrupt wealthy and politically powerful.

[hack89]

60. Right now the other EU countries are the creditors

the banks have managed to significantly reduce their expose over the course of two previous bailouts. EU taxpayers will be taking the hit - which is why they are not willing to give more money to Greece.

[upaloopa]

65. I'm guessing that if they don't want Greece to

leave the EU the creditors will take a hit

[hack89]

66. I think the EU tax payers understand they will take the hit eventually

it is the future blank checks they are balking at.

[jwirr]

118. There are at least 4 more contries in trouble. EU needs to rework their ideas to include a

real solution to the problem and that should at the very least include more regulations of bankers who borrow more than countries can reasonably pay back and more taxes on the wealthy if there is a default. Maybe a specific tax to pay back the loans. Since it is the wealthy who are probably making the deals for the loans letting them realize up front that they will be asked to pay it back is a must. If it is their money at risk I would assume that they would be more careful about the loans in the first place. As long as the bankers can expect bailouts they will continue the risks. Both in EU and the USA.

[hack89]

119. Greece broke existing EU law when they conspired with Goldman Sachs

to hide their debt so they could gain entry into the EU. Laws are all well and good providing governments are willing to abide by them.

[jwirr]

120. Okay, I was not aware of the exact law they broke but knew that they did. In a post above I

suggested that the criminals be fined to help pay the debt. Is this being done? And can they hold Goldman Sachs accountable for this?

[hack89]

121. I doubt there is anything that can be done

The EU doesn't have the power to punish government corruption - member nations haven't given up that level of sovereignty. And I suspect it will be very hard to prosecute Goldman Sachs - they will simply say that they were helping Greece restructure their debt and didn't realize the Greek government's intent was to defraud the EU.

[jwirr]

122. Always some way to get out of responsibility if you are rich.

[DetlefK]

88. The creditors are the people.

Ultimately it's taxpayer-money. Are you suggesting that the rest of the EU's citizens should be punished because Greece has been cooking the books since 2001?

[CreekDog]

68. How about an approach that works?

Austerity doesn't.

Pretty simple really.

[DetlefK]

89. I am so colossally, unimaginably, indescribably stupid!!!!!!!!!!!!!!

Of course!!!!!!!!!!!!!
Doing something that works!!!!!!!!!!!
Why has nobody ever thought of this!!!!!!!!!!!!!
You are a genius, you are the savior!!!!!!!!!!!
If something doesn't work, do something that works instead!!!!!!!!!!!!!

You, Sir, deserve the Nobel-price of economics for your bold and brilliant idea of doing something that works!!!!!!!!!!!!



Now, please, please, please, oh wise one: I beg you to enlighten us and tell us what this "something else" is.

[Marrah_G]

105. Is there a reason you are being so nasty to everyone

or is this just how you normally are?

[Orrex]

106. ^^Thread win.

[DetlefK]

107. Nasty?

People on DU LOVE bashing the austerity in Greece. So, I wondered whether I'm overlooking something. Is there a solution I don't see? Is there a solution that goes unmentioned and that the EU refuses to implement?

I figured, if I ask what exactly should have been done except for austerity, I would get an answer.

Let me try to summarize the suggestions I found in this thread:
- "What to do instead of austerity? Not austerity! Duh!"
- a violent communist revolution and collectivization of private assets
- The EU, and especially Germany, should give Greece all the money, no questions asked.

There were TWO suggestions that would be somehow partially useful: A controlled increase of inflation in the EU and a massive tax-increase on rich Greeks.

A thread with 80+ replies. 5 answers, 3 of which are bullshit and 2 of which are only partially useful.

Would you react in a nasty way if you tried to discuss a serious topic and got these results?

[Marrah_G]

109. You are not behaving like someone who wants a discussion

Instead your responses to many are nothing but snark and come across as someone who is really only looking for a fight. It makes it almost impossible to get anything out of the thread because your responses get in the way.

If you really are looking for a discussion on the topic perhaps you should delete this OP and start over again. Try to imagine you are talking to people you just met in a coffee shop.

[DetlefK]

112. I'm definitely not getting in the way.

I posted this thread and then left it alone for 20 hours. (Look at the time-stamps if you don't believe me.) I expected 5-10 replies, with maybe 2 telling me about that Greece-strategy without austerity that everybody except me seems to have read or heard about. Paul Krugman and several others routinely mention that austerity is wrong, so there must be a plan that doesn't include austerity, right? Someone surely must have laid it out and written about it, out there, somewhere on the internet. I just haven't found it yet...

Instead I got a huge bloated thread where everybody agrees that austerity is bad and nobody talks about alternatives to austerity.

[HooptieWagon]

75. So, if Greece is kicked out of EuroZone...

And Russia offers them a bailout, do they leave NATO? I'm sure Russia would be happy to have Naval and Airforce Bases in the Eastern Mediterranean in exchange for propping up Greeces economy.

[bobalew]

77. Make the Greek Shipping Tycoons & billionaires pay their Fair SHARE of Taxes, which they absolute

DO NOT do now. They think they are exempt from it, entirely, and have been operating as such for the last 15 years, & maybe even more. One was even asked on Squawk on the street business report wy he wasn't & he said he shouldn't have to.. GRRR!

[DetlefK]

91. I doubt that would be enough money. But it would be a start.

[Orrex]

101. Your basic assertion is a fallacy.

Your argument boils down to "if you can offer no viable alternative, then we must continue with austerity."

That's a classic false dichotomy and pretends that one course of action isn't terrible simply because a good alternative hasn't yet been tried or implemented.

You might as readily say "I'm going to keep stabbing you in the leg to treat your ADD until you cure it."


Austerity is a cruel burden and a punishment inflicted upon the most economically vulnerable. It was a failed experiment from the outset and should be abandoned.

[DetlefK]

102. Then, what are the alternatives to austerity?

- You give Greece loans and force it to cut spending. -> shrinks economy

- You give Greece loans and force it to increase spending to grow economy. -> rampant corruption soaks up the money instead and the greek economy doesn't grow

- You don't give Greece any loans. -> Greece defaults on its debts, threatening the Euro.


Do you have more to offer than "your idea sucks"?

[Orrex]

103. That's not the right question either

At least, it's not the whole question at this point.

The real problem is that austerity is the wrong course at this point and was the wrong course at the outset, so whatever solution might have been sufficient in the first place, we now also have to correct the disaster wrought by austerity.

Incidentally, that's very similar to the GOP's economic gameplan for most public projects: cut funding for those programs in the name of fiscal responsibility, then complain when those programs don't work, then propose to cut funding further until those programs magically snap into shape.

Instead of punishing the economically vulnerable in the first place, Greece (and any country foolish enough to consider austerity, like the US) should greatly increase the tax rate for the wealthiest and use those proceeds to pay for whatever programs were nominally supposed to be funded by the savings allegedly resulting from austerity.

They should cut military spending (e.g., the useless and hugely expensive submarine program discussed up-thread).

They should invest heavily in infrastructure and public works, because these have immediate and longterm benefits for the greatest number of people, even if it limits the number of solid gold toilets that the wealthy can install in their mansions.

If all else fails, they should straight up default on their loans from the EU, because what else can they do? Bound to those debts, Greece will face decades of economic depression that will ultimately benefit them not at all, so what's the incentive for paying them?


In any case, even if literally no other solution is found, austerity is a terrible way to handle the situation.

[Starry Messenger]

111. Thread win.

[Orsino]

113. Fuck austerity. Tax the rich. n/t