The creation of the "Eurozone" from the beginning was folly.  The thought that everybody on the continent, with its various political and social ideologies, could simply get along as a common economic unit was a shallow and naive view of the world.

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_FINANCIAL_CRISIS?SITE=PAPIT&SECTION=NATIONAL&TEMPLATE=DEFAULT

Mind you, I do not claim to have predicted specifically this Greece thing, but what I did predict was that some laggard nation would blame all of its woes on its neighbors.  I still see the rise of an ultranationalist politician on the continent, who causes military problems and blames them on the Eurozone (I do not think that this will be an immediate consequence of the Greek situation, though).

Essentially what Greece wants to do is to stiff the other countries' banking systems on billions of dollars of loan made to prop up profligate Greek spending, and to continue to RECEIVE EVEN MORE MONEY.  And blame the whole thing on the lending countries and lending banks. The foreign banks have already volunteered to take 50-cents-on-the-dollar for the debt, yet Greece feel even this is not enough.

The seeds of the next European continent military disaster are being sown in this Greek problem as it will provide fertile ground for legitimate (and illegitimate) political and ultranationalistic unrest and strife.

And they might have gotten away with it, or at least kicked the can down the road for a few more months, if Papandreou hadn't decided to surprise the markets and the rest of the Eurocrats by calling for a wholly-unnecessary referendum.

Just because the Greeks invented democracy doesn't mean they've got any business trying to use it.  It's been an expensive week for me, but it's not without its irony :)

Just because the Greeks invented democracy doesn't mean they've got any business trying to use it. 
Greece today is a rather different proposition to the one where "democracy" was invented - it wasn't representative democracy back then, it was whoever turned up to try and run the city (IIRC)

But, like pretty much everyone else I know, I had no idea of the kludges that were used to get Greece in in the first place: the place was an economic disaster that only got into the Euro by using an estimate of the size of the black economy as part of the GDP calculation to pretend that debt was a manageable proportion.. whoever did their due diligence checks fouled up comprehensively with Greece.

i agree about the EU, it was a bad idea from the get-go. i disagree about the causes of greece's money woes. it's not because the greeks have pensions. it's due to predatory, deregulated banking, same as what's happening here.

i agree about the EU, it was a bad idea from the get-go. i disagree about the causes of greece's money woes. it's not because the greeks have pensions. it's due to predatory, deregulated banking, same as what's happening here.
A couple of corrections: it's not the EU as such, it's EMU/Eurozone - the common currency. The UK is still in the EU, but not in the Euro.

..and Greece's money woes is not really due to banks so much as the way they avoid paying tax to a huuuge amount, retire rather early and do their damnedest to avoid doing any work before then. (And then riot when these conditions look like they're changing :))

A couple of corrections: it's not the EU as such, it's EMU/Eurozone - the common currency. The UK is still in the EU, but not in the Euro.

..and Greece's money woes is not really due to banks so much as the way they avoid paying tax to a huuuge amount, retire rather early and do their damnedest to avoid doing any work before then. (And then riot when these conditions look like they're changing :))
countries all over the world are running insanely high deficits, in most of these countries it's mostly due to deregulated banking. why is it uniquely in greece that the same insanely high deficits are due to the fact that people have pensions? Is it just because greece has a socialist government?

isn't this just another version of blaming the little guy for economic woes, the same silliness we're doing here in the US blaming our economic woes on illegal immigrants? scapegoating feels good but it's not going to solve the problem. goldman sachs had quite an operation going on in greece, if you look into it.

countries all over the world are running insanely high deficits, in most of these countries it's mostly due to deregulated banking. why is it uniquely in greece that the same insanely high deficits are due to the fact that people have pensions? Is it just because greece has a socialist government?
Who has said it's "due to the fact that people have pensions"?

It's a lot more due to the fact that there is a culture of not paying tax.  Starting to receive those pensions at fifty-something doesn't help, though.  The banks also didn't help by crashing out and drawing attention to the Greek economy not being even close to being self-financing, but they're not the main culprit in this case.

I don't think the Greek government being Socialist (in name, anyway) is that relevant, either; they've been too populist in the past - failing to take any decisions which might have gone against them at the polls, putting off the time when they needed to be made.  Now it's coming back to bite them, and the people aren't happy.. but then, the people have continued to vote for a government that is weak, possibly corrupt, but kept throwing money at the voters.  Money it turns out now that they didn't have and at current rates of income/expenditure will never have.


isn't this just another version of blaming the little guy for economic woes, the same silliness we're doing here in the US blaming our economic woes on illegal immigrants? scapegoating feels good but it's not going to solve the problem. goldman sachs had quite an operation going on in greece, if you look into it.

No, I don't think it is: it's an economy whose income even in the good years didn't match its outgoings, a whole people who have got used to the government providing things without twigging that the government needs the money to pay for these things.  When the first stories of a culture of perks and tax avoidance came out, my first reaction was "it's just the Torygraph being xenophobic again - this sort of thing *can't* be going on", only to find that those first articles were understatements that didn't even scratch the surface.

I knew the GDP/debt figures were finagled before Greece joined the Euro, I didn't realize Goldman Sachs were behind a lot of those machinations.  The political desire for Greece to be in the Eurozone was so high that it wasn't investigated in anything like the depth it should have been.. sowing the wind & reaping the whirlwind and all that.

Greece's problem is due to its own avarice and incompetency.  Bottom line is they kept spending and spending, to the point where their debt has become intractable.  Of course membership in the "Eurozone" made borrowing easier for them.  Time for the Greek people to pay for their screwup, and the time has come for the other Eurozone countries/bankers to pay the price for a really stupid concept.

But... in all of this... there is a lesson for America to learn.  Greece is a window to America's future if it does not get the deficit under control.

Greece's problem is due to its own avarice and incompetency.  Bottom line is they kept spending and spending, to the point where their debt has become intractable.

It's more than that - a lot more than that.  They're not getting the money in - tax take in Greece is half what it is elsewhere in the EU, and what is documented as "tax take" isn't always received, either: bribing tax inspectors is a problem, too.  You're right that being in the Eurozone made it easier to borrow & cover up.


But... in all of this... there is a lesson for America to learn.  Greece is a window to America's future if it does not get the deficit under control.

Not really. If the US decides it needs another few wars that need to be paid for but the IRS takes backhanders for its staff rather than collect the tax.. then you might start looking like you have the same sorts of issues as Greece.

But... in all of this... there is a lesson for America to learn.  Greece is a window to America's future if it does not get the deficit under control.


Actually, it's the other way around.

The US - unlike Greece - can print as many dollars as it needs.  If you own hard assets (be it precious metals, real estate, farmland, or even shares in oil and gas producers), you'll do fine in the ensuing inflation.

Greece (and the US) cannot cut its way to prosperity.  At the risk of sounding like a Keynsian (I'm not, unless the situation is dire, and in Greece it is dire), if the private sector isn't spending, and the central banks aren't printing money, and the government isn't filling the gap by running a deficit, (which implies a future printing of money :), deflation rears its ugly head.  Then it becomes more profitable for the "job creators" to stick their money in the proverbial mattress, and spend it only on consumables.

That means no spaceships, no life-extension hacks, just truckloads of cocaine and hookers for the nomenklatura, and enough money for the armed guards of the compound to afford enough cheap vodak and whores to keep the guns of the robotic drones pointed in the right direction.

Never mind.  Move along.  Nothing to see here.  The wallfence isn't there to keep people from leaving the USSAR.  It's there to keep the rest of the world's impoverished masses out of the glorious paradise that is the DDR.

But I digress.  This isn't about inflation vs deflation, this is about Video Professor Papandreou

http://www.pollsb.com/photos/o/90298-quot_the_video_professor_quot_john_scherer.jpg
http://t.qkme.me/358pol.jpg

and that money thing that still seems to confuse him no matter how many bogus CDs he sells on his scam informercials.

Disclaimer: I'm now up to a 3-beer handicap vs. LyricBoy.

With that in mind I remind everyone reading we're in fundamental agreement that the Greeks farked up their own economy - where we disagree is how to save the world.  

I'm pulling for a solution that delays the end of the world by reposessing Greece slowly enough to keep the system intact, and he's arguing for ripping the bandaid off all at once.  In his scenario, I don't think anybody knows who wins, so I prefer mine, where I might end up on the winning side :)

(The irony here is that my position on macroeconomics is similar to LyricBoy's on the Arab Spring.  I argued on behalf of "topple the dominoes, nobody said democracy was easy!" in Tunisia, Egypt, and Libya, and he argued that "better the devil we know than the one we don't".)

Back to macro:

If it were about the Eurozone, the Eurozone would print as many Euros as required to bail out its failed province of Greece.  (Sorta like how the US Federal Reserve prints as many Dollars as are required that - despite receiving a net surplus extracted from the taxpayers in the Commie States of CA, OR, WA, and NY - the US Congress can bail out the failed Red States of Mississippi, West Virginia, and the Dakotas)

Except that the Eurozone isn't like the US.  It's an economic union (single currency) without a political union (Federalism).  The EU can't demand that the Germans bail out the Greeks. The US can demand that the Kalifornistanians bail out the Good Ol' Boys from Arkanasas.  That's the EU's (and the ECB's) fundamental problem.  And the US's fundamental advantage.