As Greece falls in arrears, one man wants to crowdfund €1.6 billion payment

British campaign organizer: “Right come on guys, let's just get this shit sorted.”

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[UltimateLemon]

coslie[/url]":2q6soqj6]

bluesdrivemonster[/url]":2q6soqj6]How true is it that the current PM of Greece won't impose higher taxes on the upper class of Greece to get them out of this mess? And would that even help a lot?

Not even a little true. The current leadership want to crack down in tax evasion. They also offered to defer military spending. However the IMF and company want to dictate cuts to social spending and an increase to taxes that will fall heavily on the poor.

They offered to increase taxation and promised that they would crack down on taxation for the rich. They didn't actually provide plans on how they would go about with the crack down though. Considering such ingrained corruption in their local government, I doubt they can pull it off.

 

[UltimateLemon]

tjones2[/url]":9zdbxaa8]

bluesdrivemonster[/url]":9zdbxaa8]How true is it that the current PM of Greece won't impose higher taxes on the upper class of Greece to get them out of this mess? And would that even help a lot?

How true is it that the IMF won't allow for tax increases, and wants spending cuts? Quite true as they recently rejected a tax-heavy budget .

They did ask for tax increase. They proposed increase in taxes for restaurant and catering, and insurances. At the same time they asked to reduce the taxes in energy, basic food, hotels and water, medicine, theatre. At the same time, they proposed increase in retirement age, reduction in number of public servants, elimination of Ekas by 2017 and removing tax exemption on Greek islands.

Saying IMF doesn't allow tax increase is a vast over-simplification.

Basically Tsipras is running a populist policy for poor, rich and government employees regardless of what it's doing to middle class.

EDIT : Most greek people would not be affected by retirement age increase since they retire at 62 (proposed 67). Public servants on the other hand retires at 58 (or 35 years of service) on 80% of final salary. In Greece, about 18% of population is public servants.

 

[UltimateLemon]

jandrese[/url]":21ztb4rn]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

Inflate drachma with what? They've got no assets, no natural resources or export capabilities. Their credit rating is dirt. After defaulting on IMF and this fiasco with EU, who would think drachma would actually be valuable?

 

[UltimateLemon]

TechnologyDinosaur[/url]":uf2wxlda]

coniferae[/url]":uf2wxlda]I haven't done the math but 3 Euros per person seems like fairly little wealth redistribution to get Greece out of trouble. Besides, the real payoff is the intangible of goodwill and a better Europe? I say lets get this shit sorted!

They already got that. 4 years ago.
When it came time to hold their end of the bargain and make changes to stop spending more than they earn in taxes, like actually start paying taxes and stop retiring at 50 they rioted on the streets and spent the bailout money supporting their relaxed lifestyle instead. And here we are.

They keep electing politicians who promise them the most benefits and keep pumping billions from northern Europe to pay for it. They'll never learn their lesson unless you let them fail and maybe then they'll understand you need to pay taxes to enjoy the benefits of the services and benefits paid for by said taxes.

They also called that bailout illegal yesterday.

Then promptly asked for another bailout.

 

[UltimateLemon]

Peevester[/url]":2984wvzb]

overHere[/url]":2984wvzb]Bail them out so they can continue to mismanage and be right back in this mess next time? No thank you. Greece needs to get their act together. I feel for the working class that is going to take the brunt of this, but perhaps if they'd forced the elite to take better care of their economy, they wouldn't be facing this problem.

Bail them out, and they won't learn a lesson. Let them fail, and maybe, just maybe, they won't do it again. Look at the banking situation here in the U.S. You think they aren't going to do that again? Most of them made a killing on the shitstorm they caused, and no one was held accountable.

You, sir, need to do some research. The EU Central Bank has mismanaged this whole crisis, to the point it's mostly of their own making. Austerity measures are stupid, and add wrecking the country from neglect to all the financial damage that throwing Greece under the bus costs.

A sane EU would consider their member states as, you know, MEMBER STATES, and properly support Greece. They want to call themselves a union, but they also want to force members to fend for themselves? The hell with that. The equivalent of $3 per EU citizen? JUST BILL THEM.

Since 2010, 240,000,000,000 Euros have been poured into Greece. Current population of Greece is 11,200,000. That means Greece has borrowed 21400 Euros per person since 2010, excluding ELA assistance and IMF extensions. That's sounds like a pretty good support.

 

[UltimateLemon]

Peevester[/url]":2yyim16z]

UltimateLemon[/url]":2yyim16z]

Peevester[/url]":2yyim16z]

overHere[/url]":2yyim16z]Bail them out so they can continue to mismanage and be right back in this mess next time? No thank you. Greece needs to get their act together. I feel for the working class that is going to take the brunt of this, but perhaps if they'd forced the elite to take better care of their economy, they wouldn't be facing this problem.

Bail them out, and they won't learn a lesson. Let them fail, and maybe, just maybe, they won't do it again. Look at the banking situation here in the U.S. You think they aren't going to do that again? Most of them made a killing on the shitstorm they caused, and no one was held accountable.

You, sir, need to do some research. The EU Central Bank has mismanaged this whole crisis, to the point it's mostly of their own making. Austerity measures are stupid, and add wrecking the country from neglect to all the financial damage that throwing Greece under the bus costs.

A sane EU would consider their member states as, you know, MEMBER STATES, and properly support Greece. They want to call themselves a union, but they also want to force members to fend for themselves? The hell with that. The equivalent of $3 per EU citizen? JUST BILL THEM.

Since 2010, 240,000,000,000 Euros have been poured into Greece. Current population of Greece is 11,200,000. That means Greece has borrowed 21400 Euros per person since 2010, excluding ELA assistance and IMF extensions. That's sounds like a pretty good support.

Yeah, in the worst possible way, by giving them money to pay interest on loans, but not enough to actually pay off the loans. The EU should treat their member states like the US does - if one is in trouble, you send grants, not force them to take out more loans and kick the can down the road by forcing more debt.

There's no question Greece is messed up - they have a dysfunctional tax system and a fairly corrupt government (to the point where they try to arrest auditors trying to point out the corruption - I don't remember the guy's name or I'd find a link for that). However, crushing them with Austerity and forcing them to take on new loans isn't going to fix any of that.

It's a loan they asked for knowing full well the conditions and consequences. If the local authorities couldn't handle the conditions, they should have haggled for the conditions before borrowing the money, not after the money is spent.

As for the austerity argument, the core of the problem is that not all them were actually implemented. There is also no question that their economy was improving when Syriza came in power. Yes GDP has lowered and unemployment was high but it was at a rebound at that point.

Finally, they aren't forcing anyone to take new loans. Syriza is and was ASKING for new loans. In fact, the final package would have been unlocked if they had agreed to implement the last bit of the austerity measures and EU was willing to negotiate some of it as well. Varoufakis unfortunately decided to try to play his game theory at the worst time in worst possible way in highly incompetent manner.

 

[UltimateLemon]

anon_coward[/url]":m6hnth8b]

UltimateLemon[/url]":m6hnth8b]

jandrese[/url]":m6hnth8b]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

Inflate drachma with what? They've got no assets, no natural resources or export capabilities. Their credit rating is dirt. After defaulting on IMF and this fiasco with EU, who would think drachma would actually be valuable?

tourism

if they had the drachma then it would drop like a rock because of this and make it very cheap to go to greece on vacation giving them some money to pay off their debts. as it is now, the euro is pretty much the german mark and the franc

Tourism has never been Greece's largest export market interestingly enough. At the same time, tourism also needs alot of imports to function. Petroleum processing is Greece's biggest export at the moment but Greece has to import crude oil. Second biggest export is shipping services, which doesn't pay tax to Greece.

But problem remains that Greece has notorious bad record at collecting taxes. Unless they improve their tax collection and address their local government corruption, any action they take won't do jack.

 

[UltimateLemon]

10thDoctor[/url]":3fxpk5lm]

jandrese[/url]":3fxpk5lm]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

It is a well-known fact to, well, people who don't know much about economics. Yes, some economists would agree, but other would disagree. In fact, there are entire departments of people who insist that austerity is a perfectly acceptable way of regaining financial stability, given certain assumptions about the economy in question. Not to mention that within the sphere of policies that can be called "austerity" there are some that are much more efficient than others.

Now do these assumptions hold for Greece? Most likely not. But this is not to say that no country can make use of austerity measures. Other European nations seemed to have done okay after 2011-2012, just to give a few examples.

jandrese[/url]":3fxpk5lm]
The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

My inner pessimist thinks that Greece won't get away with it unless it gets kicked out the Euro, hyperinflate until their debt is just paper, then settle at a more manageable rate and monetary scheme. Even if they have no assets, the government can just print their way out of the debt.

What I do agree is that it will be painful. I wouldn't want to be a Greece citizen for the next few years.

I'm an economics student who just finished a couple of classes in historical monetary policy, with specific focus in hyperinflations and debt payments.

My guess, based on my limited knowledge of the situation, is that Greece will leave the Eurozone. They will go back to the Drachma, and will begin printing as much of it as they can to hyperinflate their way out of this. Then, as soon as they have paid off their debts (or when the crisis becomes too great for their citizens to bear), they will announce that the Drachma is defunct and will introduce a new currency that is based in some way on something (my guess would be the U.S. dollar-- historically, the currencies used to base other currencies off of have been the dollar and notes from the Deutsche Bank, and since Germany now uses Euros, the latter option is unavailable. They could also base it on a commodity, such as gold or silver, but I find that fairly unlikely). Then, after a period to allow everyone to adjust to the new stable prices, they will transition back to a fiat standard.

The thing to remember with all of this is that money literally is just pieces of paper. A few people further back in the thread were scoffing at that, but it's literally true-- fiat money has absolutely no intrinsic value or backing of any kind. It's the belief in the government that keeps our monetary system running. Interestingly, the same can be said (to a degree) of commodity-backed money as well. Gold and silver have no intrinsic value, at least on a macro scale, and neither do any of the other commodities that are commonly used as a basis of currency-- but that's an entirely different subject, and one that doesn't really pertain to this discussion.

The problem I see with the approach at the moment is that their credit rating is just too shot and they don't really have anything to back up the currency either. They could print whatever they want but if nobody rrusts it, especially if euro recovers, then the new currency won't be worth very much.