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nickc - Member
can someone explain why these comparisons with household finance don't apply at the national-scale?because (mostly) you can't print more money when you feel like it.
Almost, but not quite. The essential difference is the ability to print money, correct. But a country cannot simply print money when they feel like it (although some try). If you simply print money, you get inflation which erodes the value of the money, so essentially no point in that.
A government can print money to spend up to the point where government spending plus private sector expenditure reaches the productive capacity of the economy. Beyond that you simply get inflation (at this point economists draw aggregate supply and demand curves and explain their shape).This is actually more important than deficits and surpluses that dominate current headlines, but is notoriously difficult to determine. If you (can be bothered to) read the BOE reports you will see plenty of comment on where they think the UK is in this point of balance.
So the household = government analogies can only go so far, and that is really not that far at all.
Greece to hold referendum on euro bailout deal. The date will be July 5th.
mudshark - MemberBeware of Greeks bearing gifts.
Bit out of date, these days it's "beware of IMFs bearing loans".
So they don't have the money.
Greece has been surviving on the periodical loans to keep its economy afloat.
Now the PM is setting up a referendum to save his ass/sell it to his people that THEY are deciding when the worst thing happens.
Greece cant afford to live without free external money. Harsh but fair comment?
Greece needs to default and leave the Euro.
Take cash with you- card machines etc will stop working
A work colleague has just returned from a holiday on Crete and his straw poll of locals suggested that they want the Drachma back. Possibly because they think they can continue to write their own cheques.
gordimhor - Member
Greece to hold referendum on euro bailout deal. The date will be July 5th.
How much is that going to cost...
So the household = government analogies can only go so far, and that is really not that far at all
There's also the fact that if you spend more than you bring in as a household and it all falls to pieces, you and your £150,000(?) of debt disappears into the bigger picture of, I don't know, £1 trillion of local Eurozone economy. Nobody cares.
You spend more than you bring in as a country and it all falls to pieces, you and your £350 billion of debt makes more of an impression on the local £1 trillion economy. People care.
Greece cant afford to live without free external money.
1. It's not free (although it was mispriced by design)
2. They are not alone. How much do we or others borrow externally?
Harsh but fair comment?
Simply inaccurate, unlike...
Greece needs to default and leave the Euro.
Which has been true for a long time. As is
Take cash with you- card machines etc will stop working
The queues are forming as we speak. Capital controls by Monday?? Meanwhile...
Yanis Varoufakis @yanisvaroufakis
Democracy deserved a boost in euro-related matters. We just delivered it. Let the people decide. (Funny how radical this concept sounds!)
Radical indeed!!!
Greece pushing its game of chicken further, somewhat predictable. If they wanted a referendum they could have had one months ago. By calling it on July 5th they have deliberately picked a date beyond the expiry of the current agreement and the date payments are due to the IMF.
The ECB should suspend aid to Greek banks as Greece is no longer "part of a programme", Greek banks should shut as they dont have sufficient money to honour withdrawals.
Europe faces more serious issues from terrorism so it's time to end the distraction that Greece has become and kick them out of the EU, NATO too if they keep copying up with Russia.
Unless the Greeks can find someone to lend them Drachma they will face the (worse) austerity as their budget won't balance just because the currency changes. It will in fact be much worse as prices of import goods will soar, I doubt Greece is self sufficient in food and it certainly isn't in oil.
I suspect the referendum is a get out of jail card for Syrizia. They know full well that given the certainty of remaining part of an austerity focused greater whole or going it alone, a frightened people subjected to an overwhelming propaganda assault will vote for the status quo. If by some mischance they didn't the EU and the domestic government would do what they always do when the natives get a bit bolshie; change a couple of minor points and then resubmit the proposal again until they get an approval, or failing that nobble the votes...
Fair play to the man
Give the people their say then they will be bought in to what ever happens, is this not democracy at work ?
By calling it on July 5th they have deliberately picked a date beyond the expiry of the current agreement and the date payments are due to the IMF.
This!
Perhaps they should have organised a referendum in less than a week Ninfan
I personally would like to see them leave and see if they can make a go of it, because democracy in Europe might improve if Brussels learnt people can say NO.
If they wanted a referendum they could have had one months ago.
Before they knew what the deal was they could have asked people to vote on it ?
The election was a referendum to end austerity he tried the bankers said no. he will let the people decide. The date choice is clever though very unhelpful as it forced the EU/IMF hand before the people have spoken.
I do not understand how a Greece outside the EU , out of NATO and now Russias pet toy has helped Europe. Could you explain your thinking here?Europe faces more serious issues from terrorism so it's time to end the distraction that Greece has become and kick them out of the EU, NATO too if they keep copying up with Russia.
So the EZ kiss goodbye to 300 bn and Lagarde presides over the biggest loss in IMF hiistory. Apparently money well spent in pursuit of the neo liberal agenda?
Syriza could have had that same deal and put it to the electorate 4 months ago. They've deliberately stalled the process with the intention of forcing the situation to this point. Austerity means balancing the books, the Greeks could have done much more to collect taxes. Their choice.
Greece should never have been bailed out in 2010, the EU gave them a chance in the same way they did Portugal and Ireland for political solidarity reasons.
Default would be €300bn + but the recovery will not be zero. I still believe a deal will be done but not before capital controls (inc banks shut). Eurozone finance ministers have refused Greek request to extend bailout and thus bank funding for another week. The honour of these default records, if that's what happens, belong with Syriza and the Greek people who elected them and the Greek people who dodge their taxes. This disaster has many fathers.
Russia is an IMF member with 2.5% so the Greeks would default to them too. IMF is a senior creditor and won't just allow the Greeks to walk away from the debt, neither will the EU. I still say a deal will be done but not before capital controls and more shenanigans
You can't have a member of the euro, EU and NATO who won't play by the rules. So as a member they are a drag, a net negative contribution.
The world has more serious issues like IS and the rise of extremism to deal with. The Greeks have been an annoying sideshow, time to prioritise.
Of course another difference from a domestic economy is that if you have trouble with your car loan, it's not normal for the dealer to go round to speak to your bank manager to remove your overdraft allowance, to screw you up completely even if that means you never can pay for the car.
Still less normal - the dealer invites your neighbour out for a drink and suggests that he moves in with your missus instead of you, in the hope that he will be more accommodating in prioritise car payments over food bills.
I see that Jamba has taken over from jhj as stw's main supplier of fantasy and conspiracy. Tin foil hats, everyone!!!
I would agree with you but you just cannot argue nor fault a man who calls it 100% correct 100% of the time.
Cut Greece free, the EU doesn't need a member like that. The losses are huge but will increase the longer Greece is in the EU.
They have cultural issues that don't match up with tax collection and spending in other countries.
Sad for the ordinary bloke in the street but their politicians wanted in on the EU gravy train and the electorate lapped it up.
Time to bring it to an end, anybody who thinks Greece will pay that money back is living in fantasy land.
The consequence of a Greek exit can be dealt with at the time, you could talk about 'what ifs' and continue throwing money at the problem for years yet, no thanks.
Apparently money well spent in pursuit of the neo liberal agenda?
Neo-liberal - really??
How about simply a poorly designed and badly implemented fudge. Neo-liberal economics (to the extent that it actually exists) is a far cry from the folly of imposing a fixed exchange rate on a non optimum-currency area and without fully integrated monetary [b]and [/b]fiscal policy.
It's not neo-liberalism, it's just bad economics and doomed to failure. It has only ever been a question of time.
jambalaya - Member
Austerity means balancing the books
Well not quite, but anyway lets not forget that they are running a budget surplus in the middle of an appalling recession - not exactly what the textbook tells us. In fact it's crippling them.
Compare that with our version of austerity (sic) which is just less accommodative fiscal stimulus. We are moaning when we are still spending more than we earn and pretend that is austerity. Meanwhile in Greece......
mrhoppy - Member
Mostly so I can get home again. This holiday has felt a little like playing Russian Roulette.
Well, we've been here for six weeks and will be here for another five. If it wasn't for the fact that I have work to do in the grim north I'd quite happily stay a hell of a lot longer than that.
Of course, it's nothing like a holiday, seeing that we spend nearly half the year here (and will continue to do so).........
To be honest, the only things that I miss about my "other life" are a few people that are important to me (including a couple of riding mates, nobody around here rides what I like to).
Europe faces more serious issues from terrorism so it's time to end the distraction that Greece has become and kick them out of the EU, NATO too if they keep copying up with Russia.
The threat from terrorism is insignificant - fuel poverty for example kills far more than terrorism does.
Indeed it is the perceived terrorist threat which is used as a distraction to the real issues facing Europe.
Got to agree with THM here. This has got sod all to do with neoliberal economics. This has everything to do with the rank stupidity of creating a single currency to cover countries of such wildly divergent economies as Germany and Greece. It was never ever going to work. Thank god we had nothing to do with it. Say what you like about Gordon Brown, but he had enough nouse not to touch this one with a barge pole.
The Euro is a disaster. It was never going to be anything else. Its a fundamentally unworkable idea, being propped up for political reasons, by people completely removed from reality, and insulated from the dire consequences of their completely flawed idealogical project. The problem is that it could actually get a damn site worse! It could end up bankrupting an entire continent. And for what?!
Madness!
So , just to clarify, these events have not altered either binners or THM's view of the Euro.
Who could have predicted this ?
teamhurtmore - MemberCompare that with our version of austerity
It's funny isn't it. The Greek version is cuts that could be designed to damage their economy. The UK version is to just disregard the economy except as an excuse to make the cuts you want to, while not actually saving the money you say you will. It's like everyone likes saying the word but nobody really knows what it means.
JY - If you could give us any reasons why this ongoing car crash would change our opinions, I'd love to hear them
You can start your essay "the Euro isn't a totally bloody stupid, unworkable idea because..... "
GO!!!
I think I would rather try the essay that starts
Liverpool are the greatest team and they deserve to win the league because
More chance of persuading you
😉
😀
NW - one of the most misused terms of the last few years!!!
Northwind - Memberteamhurtmore - Member
Compare that with our version of austerity
It's funny isn't it. The Greek version is cuts that could be designed to damage their economy. The UK version is to just disregard the economy except as an excuse to make the cuts you want to, while not actually saving the money you say you will. It's like everyone likes saying the word but nobody really knows what it means.
Common theme seems to be that the most vulnerable people pay the dearest price
@gordimor the least wealthy people are more reliant on the state for help so when the state gets it wrong they suffer disproportionately. There might never be a more stark example than Greece
I would agree with you but you just cannot argue nor fault a man who calls it 100% correct 100% of the time.
You persistently misquote me JY. However lets be clear I am right on this topic
DrJ all you make is emotional arguments, that doesn't cut with me and it won't cut it with the Troika. There is no conspiracy in my post, the EU standing firm will benefit the euro and Tsipras photo ops with the near bankrupt Russia aren't worth taking seriously. Greeks don't want out of the euro and they certainly don't want to live Russia/mini Soviet Union. So this bluff from Greece is easily called. The IMF where as tough with Labour in the 1970's as they are being with Greece, it's always been their way.
When this is all said and guys you can search through and point out where I was wrong. The EU was prepared to fudge things and grant an extension to the bailout when Greece doesn't warrant one, the EU wasn't prepared to be as tough as I suggest it should be (and as tmh suggests is required) but Greece may well have pushed them into the place where they should have gone but didn't have the cahoonas
The threat from terrorism is insignificant - fuel poverty for example kills far more than terrorism does.
@ernie Hot weather kills more people than cold, humans are quite good at dealing with the cold provided they can keep dry. We didn't have much in the way of heating 100 years ago. Also pure numbers aren't the point, more people die in the UK in car accidents. Obviously the 400,000 who've died in Syria and Iraq skew the overall numbers
Hot weather kills more people than cold,
https://www.google.co.uk/search?q=Hot+weather+kills+more+people+than+cold&oq=Hot+weather+kills+more+people+than+cold&aqs=chrome..69i57&sourceid=chrome&es_sm=93&ie=UTF-8
There is the google result if you just use that claim. Its fair to say that statement is just wrong.
Unless you bother to address this point there is not much point "debating" with you as you just ignore the [many] bits where facts show your statements to be incorrect and still just say you are right this time. Perhaps you wish to claim I misquoted you again?
Slow motion train wreck being put on pause for the sake of not being perceived as a systemic failure, undermining the bullish EU moral high ground in front of the disgusting peasants and serfs, who haven't suffered enough, sweet dreams little prince 😀
Obviously the 400,000 who've died in Syria and Iraq skew the overall numbers
Terrorism is a big problem in Syria and Iraq, no small thanks to us in the West with our meddling, it isn't a big problem in Europe, as you seemed to suggest.
@jamba - on the contrary - you are the one who talks about guilt and obligation, spiced up with anecdotes and misunderstanding of basic facts. I have pointed out, as indeed have the IMF along with countless commentators, that the troika plans cannot and will not work, as indeed they have not in the past. As a matter of pragmatism another way should have been found. Unfortunately personal issues seem to have clouded the rational judgement of the EZ finmins who have now tipped over their pram. Interesting times.
JY my comments about the elderly come from speaking to my friends who specialise in that type of care. Old people die in the winter not sue to cold (and specifically fuel poverty) but due to things like respiratory illnesses etc. I'm sure DrJ can enlighten us further but it's off topic really, I was just responding to ernie.
Terrorism is a massive threat to us in the west. In terms of security and economic impact. We can agree to differ on that. We don't see the number of incidents here as our security forces are working hard to keep us safe. Let's see during the remainder of Ramadan how many other incidents there are particularly on Fridays.
My grasp of the facts and realities of Greece's financial position and the rampant corruption and tax evasion is unassailable and totally aligned with the lenders here. You yourself spoke of how you had to make payments to get medical treatment. Without the bailout in 2010 the banks would have forced a Greek bankruptcy, the 2010 was political and not justified from a financial perspective, Varoufakis is seen by the finance ministers as a timewaster which is why he was sidelined, it frankly would make no difference which personalities Greece put in front of the EU their strategy was always to push this to the very edge. We shall see whether lemming like the Greeks jump to financial suicide
Syriza is playing a very dangerous game and a Greek default will be far worse than any austerity they've seen to date. The pre crises Greek economy was a fraud, it has begun its correction towards the correct level. It's a poor country with significant structural issues trying to behave like a modern, rich country which it most definitely is not
Plenty of market research notes have been published this weekend, people are ready for whatever outcome we see this week. Whatever they say publically the eurozone have been preparing for a Greek default and euro exit for months
Anyway off riding now, will check in around 10pm
My grasp of the facts and realities of Greece's financial position and the rampant corruption and tax evasion is unassailable and totally aligned with the lenders here.
He he! Classic Jamba!
Think this is the end of the line for Greece staying in the euro now that ECB has pulled life support for the Greek banking system. The Government and banks will probably be insolvent tomorrow.
My grasp of the facts and realities of Greece's financial position and the rampant corruption and tax evasion is unassailable and totally aligned with the lenders here.
There is a non sequitur there given that the lenders have got this badly wrong in the first place. Perhaps that is the issue?
Worse than austerity? A programme with no end and no solution that has devastated the economy, caused massive wage deflation and unemployment. Worse? How exactly...?
Compare the stats on recovery after default and devaluation - even Argentina. The story is inconvenient for the € elite hence the lack of coverage. But after the negative J curve effect, Greece would get a chance to recover. At the moment, there is no chance.
Enjoy the ride, sorry to miss it. Hospital visit now 🙁
JY my comments about the elderly come from speaking to my friends who specialise in that type of care. Old people die in the winter* not sue to cold (and specifically fuel poverty) but due to things like respiratory illnesses etc. I'm sure DrJ can enlighten us further but it's off topic really, I was just responding to ernie.
That is a fascinatingly long winded anecdote and interesting way to avoid addressing this claim and attempting to move the goalposts - you made no mention of age you just said this
Hot weather kills more people than cold,
Could you explicitly state whether you still agree with the factually incorrect statement that heat kills more people than cold ?
I imagine its easy to be right if you re-interpret what you said and ignore the evidence that its wrong. In essense none of us would ever be wrong if we ignored the facts.
He he! Classic Jamba!
Indeed it would be amusing if he was doing it for a reaction but i think he means it . It is very FRED like in posting style