Post #402,646
6/19/15 8:05:26 AM
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Simon W-L: We're being played on the Greek "bailouts"
MainlyMacro: Whenever I write about Greece, a large proportion of comments (maybe not a majority) could be summarised as follows: how can you side with Greece when its economy is so inefficient and its governments so inept and after everything we have done for them. I have no illusions about the inefficiencies and corruption endemic within the Greek economy. Nor do I want to become an apologist for any Greek government.
What does seem to me very misguided is the idea that European policymakers have already been generous towards Greece. The general belief is that had they not stepped in austerity in Greece would have been far worse. This seems simply wrong. If European policymakers have been generous to anyone, it is the Greek government’s original creditors, which include the banks of various European and other countries.
[...] Yup. The sooner the idea that loans are risk-free, ever inviolable, holy writs that have to be honored no matter the cost, no matter the risks, and no matter how circumstances change, ... - the sooner that idea dies, the better. Creditors are supposed to recognize that risk exists when they make a loan. There are no guarantees, and loaning someone or some country money does not give you an eternal right to make their lives miserable when circumstances change. You took a risk, man-up and accept it. (via EconomistsView) Cheers, Scott.
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Post #402,647
6/19/15 9:03:49 AM
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You Communist!
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Post #402,648
6/19/15 9:06:02 AM
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You must be one of those "foreclosure is not a moral failing" people
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Post #402,649
6/19/15 9:24:35 AM
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ah, so you are willing to admit the USA can default on it's debts
and print money right up until it can't. good to know. Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 59 years. meep
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Post #402,652
6/19/15 10:18:09 AM
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Non sequitur.
The US government (via the Fed, etc.) is the only legal authority that can create dollars. As such, there is no conceivable circumstance where it cannot pay debts denominated in dollars.
As such, it cannot default due to lack of dollars.
On the other hand, any debt or other financial obligation taken on by the US government is (AFAIK) legally the same as any other. If one says that the US has to pay bonds on time, then it has to pay Social Security and salaries on time, too. Treasury Bills aren't special in that regard. We can't "selectively default" by paying off bonds but not other things.
When there are periodic scares about the government shutting down because it doesn't have money, its not due to the US being unable to create or raise dollars. It's due to the budget rules and insane Teabaggers wanting to burn the federal government down.
Greece is different because it cannot make its own currency. At the moment...
But you knew all that. ;-)
HTH.
Cheers,
Scott.
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Post #402,653
6/19/15 10:25:54 AM
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zimbabwe "used" to print their own dollars too. how did that work out?
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 59 years. meep
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Post #402,654
6/19/15 10:52:22 AM
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You tell me how Zimbabwe applies to the US and we'll talk.
Hint (11 page .pdf): Zimbabwe’s economic crisis and subsequent hyperinflation were preceded by several years of economic decline and mounting public debt. Weakening began in 1999, coinciding with periods of drought that adversely affected the agriculturally dependent nation. External debt as a share of GDP increased to 119 percent in 2008 from 11 percent in 1980. Land reallocation in 2000 and 2001, which redistributed large agricultural tracts, depressed commercial farming output. Output fell 50 percent between 2000 and 2009, led by a decline in the country’s major foreign-exchange cash crop, tobacco, which slid 64 percent in 2008 from 2000 levels (Chart 3). Commercial production of maize, the national staple, dropped 76 percent during the same time (FAOSTAT Database 2011).
Uncontrolled government spending accompanied the weak economy. In 1997, authorities approved unbudgeted expenditures, amounting to almost 3 percent of GDP, for bonuses to approximately 60,000 independence war veterans. Efforts to cover the payment with tax increases failed after trade-union-led protests, prompting the government to begin monetization (printing additional money to “pay” for the expenditure). In 1998, the government spent another significant share of gross national product (GNP) for its involvement in Congo’s civil war. Additionally, authorities faced debt obligations to the IMF. In 2006, Zimbabwe still had substantial overdue obligations to the IMF’s Poverty Reduction and Growth Facility and Exogenous Shocks Facility Trust, totaling about US$119 million. 6 These funds were intended to foster development and reduce poverty.
The dire economic conditions prompted a wave of emigration to neighboring countries, contributing to a population and labor force decline beginning in 2003 (Chart 4). Zimbabwe emigration totaled 761,226, about 6 percent of the population in 2005. This number increased to 1.25 million in 2010, representing 9.9 percent of the population (World Bank 2008 and 2011). With a shrinking tax base and revenue that could not support expenditures and obligations, the government printed yet more money. Currency lost value at exponential rates amid an imbalance between economic output and the increasing money supply (Chart 5). Just like the USA!!11 Amirite? :-/ Cheers, Scott.
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Post #402,662
6/19/15 1:00:04 PM
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read the second half of the first sentence in your link
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 59 years. meep
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Post #402,663
6/19/15 1:09:32 PM
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I did. And?
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Post #402,658
6/19/15 11:53:48 AM
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I was hoping Greece would make a deal with Putin.
Let the vampire live off another victim. Alex
"There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge."
-- Isaac Asimov
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Post #402,660
6/19/15 12:29:38 PM
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That was rumored to be in the works, but now maybe not.
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