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.”

Read the whole story

 

[bluesdrivemonster]

I'd be really surprised if they pull this off, this is like punching the Moon. But if they do pull this off, I bet the Moon will gladly take the beating.

 

[UnnDunn]

You know what? Fuck it, I can chip in $5...

 

[overHere]

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.

 

[bluesdrivemonster]

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?

 

[theoilman]

overHere[/url]":qpt46api]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.

And you think the IMF and troika are innocent idealists, unlike the US banks? Hah!

 

[beebee]

Technically the banks that loaned Greece money would be bailed out, not Greece itself.

 

[coniferae]

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!

 

[saru-kun]

Give a nation some money, they'll eat for a day.
Teach a nation to balance their own budget (or at least keep their Debt/GDP ratio in check), they'll eat for a lifetime.

A pile of money with no conditions would just put off the inevitable. Greece's problems have been systemic problems, years in the making. The entire Euro currency concept, being fundamentally flawed, has not helped either.

Either way, another bailout, without serious, comprehensive reform, will do them very little good at this point.

 

[Aufgehaben]

As a swede, I must say I'm surprised Sweden managed to leave the European Union without me even noticing it. Sneaky!

 

[coslie]

bluesdrivemonster[/url]":28qk4cx5]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.

 

[Oz7]

overHere[/url]":m5jqvmz7]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.

The original sin involved private banks lending the Greeks using ridiculous assumptions; so the "They" involves foreign private creditor banks as much as it involves Greece. Around 2010, the first bailout involved EU governments paying Greece to pay foreign French and German banks back... so the private banks got off the hook. If it sounds familiar, it is... (see TARP).

The first bailout took those banks off the hook and put EU taxpayers on the hook for those loans. For the next three years, the IMF et al have essentially been paying Greece to pay themselves back, while insisting on austerity measures that crashed the Greek economy, making it so that the Greeks won't ever be able to pay them back. Essentially, bail out money does NOT end in Greece.

Edit: One more link about where things stand right now.

 

[theoilman]

coslie[/url]":16zz54h6]

bluesdrivemonster[/url]":16zz54h6]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.

Mainly because their loans are predatory and they want to ensure continued interest accruing and further loans taken

 

[Thrasius]

Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

And I want to add in an edit that Europe is endangering the whole world economy through its actions. Screw the banks. Make them take a hit. Save Greece!

 

[Nate Anderson]

Aufgehaben[/url]":2k12crbk]As a swede, I must say I'm surprised Sweden managed to leave the European Union without me even noticing it. Sneaky!

We've now managed to get you back in.

 

[nmalinoski]

I've finally made the connection; crowdfunding campaigns are simply internet telethons.

 

[yester64]

Nice idea, but i think it would not help to get that country back on its feet.
It seems to me that the nation needs to be reconstructed from its core to get rid of corruption, getting a working bureaucracy and write the bailout off as a loss and structure the burden fairly between all residents. This would mean some bold moves from within Greece.
Just pumping money in will certainly not fix the problem. Still, the idea is nice.

 

[saru-kun]

Thrasius[/url]":25d5xblk]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

 

[yester64]

Thrasius[/url]":3e9uc49n]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

I don't think this would tell the truth. It is apparent that the current measurements did not work, but at the same time the problems Greece is facing did not result from the collapse of the financial breakdown back in 2008 either. This is a structural problem.

 

[theoilman]

saru-kun[/url]":3vfvmkhj]

Thrasius[/url]":3vfvmkhj]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

States in the US have their own budgets under a national currency managed by the federal reserve which is outside state control. The euro is in trouble for other reasons.

 

[bruins01]

yester64[/url]":1o0av8vz]Nice idea, but i think it would not help to get that country back on its feet.
It seems to me that the nation needs to be reconstructed from its core to get rid of corruption, getting a working bureaucracy and write the bailout off as a loss and structure the burden fairly between all residents. This would mean some bold moves from within Greece.
Just pumping money in will certainly not fix the problem. Still, the idea is nice.

This is not about pumping money into Greece. Any additional money given to Greece will immediately leave Greece and be given to its creditors. In exchange for this "generosity" Greece must agree to ever-harsher austerity measures, measures which are not improving the economic situation in the country and that will guarantee that they will be in this exact same situation the next time Greece can't meet its debt obligations, which will be very soon. This is an endless cycle that will persist as long as the Troika insist on imposing austerity measures (the justification for which is EXTREMELY flimsy, if not downright fallacious) and Greece accepts the deal.

This is the first time Greece has gotten this close to breaking the cycle. Breaking the cycle would, if the Troika's threats are to be believed, necessitate Greece abandoning the Euro.

 

[bluesdrivemonster]

coslie[/url]":2xez7fxx]

bluesdrivemonster[/url]":2xez7fxx]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.

Oh yeah, I did actually read that tax evasion is rampant in Greece, but the article I read specifically stated that it was adamant with middle-class professionals.

 

[theoilman]

bruins01[/url]":2mrmvpeh]

yester64[/url]":2mrmvpeh]Nice idea, but i think it would not help to get that country back on its feet.
It seems to me that the nation needs to be reconstructed from its core to get rid of corruption, getting a working bureaucracy and write the bailout off as a loss and structure the burden fairly between all residents. This would mean some bold moves from within Greece.
Just pumping money in will certainly not fix the problem. Still, the idea is nice.

This is not about pumping money into Greece. Any additional money given to Greece will immediately leave Greece and be given to its creditors. In exchange for this "generosity" Greece must agree to ever-harsher austerity measures, measures which are not improving the economic situation in the country and that will guarantee that they will be in this exact same situation the next time Greece can't meet its debt obligations, which will be very soon. This is an endless cycle that will persist as long as the Troika insist on imposing austerity measures (the justification for which is EXTREMELY flimsy, if not downright fallacious) and Greece accepts the deal.

This is the first time Greece has gotten this close to breaking the cycle. Breaking the cycle would, if the Troika's threats are to be believed, necessitate Greece abandoning the Euro.

That's a bit backwards. The IMF and Troika are using the default as leverage to try and get Greece to take more loans and austerity. Hypothetically if people paid Greece's debt then they wouldn't need more loans and could get out from under troika.

 

[viscious+ars2]

I went for the Greek wine.

 

[mike_syn]

bluesdrivemonster[/url]":3o6bwykd]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?

It wouldn't accomplish much of anything.

One of the problems with taxing the hell out of rich people is that rich people are welcome to move wherever they want. They bring their money with them and this usually makes the places they move to better off.

The other problem is that rich people, having realized that there are people (such as yourself) who occasionally wonder if taxing rich people is a potential solution to $problem_of_the_day, so they tend to establish cozy relationships with the political types, who quickly realize that there are plenty of campaign contributions, board memberships, and post-political-career connections to be cashed in on provided they remain friends with the rich people.

 

[tjones2]

bluesdrivemonster[/url]":2b04mtmn]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 .

 

[JPan]

coslie[/url]":1o48hrb3]

bluesdrivemonster[/url]":1o48hrb3]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.

Bullshit. The current government was willing to increase taxes on pretty much everybody. Problem is that this does not fix their economic problems. What they need to do is open labour laws and stop early pensioning. Because getting more people to work is essential for it to work out. And yes there were some cuts as well they are running out of money quickly because nobody trusts them anymore.
But especially the IMF wasn't content with that they wanted them to do actual structural reforms that would help the economy to get better in the long run. You know the kind of stuff Spain did which was really painful but now led to them being the fastest growing country in Europe. Still early days but ...

The problem is that this runs anathema to the politics of the current government they are a radical left party who
- reversed privatisations ( they can be bad but the public sector in Greece is so terrible that this is necessary
- stopped opening the labour market ( which is key to get the country back up )
- rehired state employees ( the one thing they need to reduce because a lot of them are just dead weight )

This policy of very strict labour laws and a still very big public sector leads to the fact that greek labour costs are still as high as in 2007 and the whole country is not competitive but lots of people are out of work. With a drachma they could deflate their currency but without it they need reforms. And the current government is completely opposed to them.

Hell Greece still doesn't have a land register. They got 150m from the EU a couple years back which resulted in nothing and the minister in charge said " Well this is Greece".

Or the other Syriza guy who just said regarding pensioners not getting their pension " Money is only paper, it will be found"

So basically the problem is not the money. The problem is that this was a country heavily living over its possibilities and now being ruled by a bunch of guys who think money is just paper. They take their democratic right not to implement the proposed reforms and the rest of Europe takes their democratic right not to give them anymore money.

And yes their debt is unsustainable in the long run but they only have to pay less as percentage of GDP now than France because the interest rates are so low. The problem is that while Spain,Portugal, Estonia, Ireland, Slowakia etc. reformed a lot Greece did not. Don't get me wrong they cut a lot but they didn't make any reforms that would actually make the country work better.

And the biggest problem is that nobody trusts the new government anymore. They always talk about the things they want to reform but they have done jackshit. They had 6 months now they could have heavily done some of the reforms that make sense to everybody. There is enough to do. But the only thing they produce is hot air. First they need to reform THEN the debt can be cut. Not the other way round.

 

[tjones2]

theoilman[/url]":1fivaa7j]

saru-kun[/url]":1fivaa7j]

Thrasius[/url]":1fivaa7j]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

States in the US have their own budgets under a national currency managed by the federal reserve which is outside state control. The euro is in trouble for other reasons.

US states don't face this issue because the federal budget is enough to stabilize the business cycle. Fiscal and monetary policy can be coordinated on a national level.
I would guess that the Eurozone's issues would go away if most health, retirement, and military spending was ran in Brussels.

 

[saru-kun]

theoilman[/url]":g90191mt]

saru-kun[/url]":g90191mt]

Thrasius[/url]":g90191mt]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

States in the US have their own budgets under a national currency managed by the federal reserve which is outside state control. The euro is in trouble for other reasons.

The relationship between the US States and the sovereign nations in the Eurozone is fundamentally different. That being said, the legal situation with US state debt is interesting on its own.

http://scholarship.law.duke.edu/cgi/vie ... ext=djclpp

(That's just something I found in a google search, IANAL, etc.)

One important difference I noted is that, instead of extending loans to the states, the US Federal government generally tends to just give the states money in grants during hard times.

 

[peppeddu]

First they cook the books for years and then then they cry foul and ask for a bailout.
Hell no, not until we make sure it won't happen again.

The general greek population is not to blame, but the higher ups are.
To date (afaik) not a single person has gone to jail for screwing up the Greek economy and now they want free money and a free pass to go back and do it all over again.

No thanks.

 

[jonah]

saru-kun[/url]":3esw267e]

Thrasius[/url]":3esw267e]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

There are numerous countries in Africa that do exactly that. Their economies are decidedly shaky, but not because they don't control their own currency.

 

[jonah]

Greece's problems are legion:

1) A relatively unproductive economy (by the standards of the rest of Europe)
2) Outrageously large government spending, relative to the tax base, which is linked to
3) Ridiculously high rates of tax evasion. People in Greece look at paying taxes the same way most people in the US look at cleaning out their house's drains - something you do as infrequently as possible.
4) High debt levels relative to economic productivity

When nobody pays taxes, the government can't afford to pay for anything. Then you have the government employing a fourth of the country. How are they supposed to pay all those people? By borrowing money, of course.

Greece should default on its debt, withdraw from the Eurozone, and have to suffer through the fact that nobody will lend them money at low rates for a while. They can use the next few years to try actually building a productive economy where 25% of the population doesn't work for the government.

 

[saru-kun]

jonah[/url]":114gh4e2]

saru-kun[/url]":114gh4e2]

Thrasius[/url]":114gh4e2]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

There are numerous countries in Africa that do exactly that. Their economies are decidedly shaky, but not because they don't control their own currency.

The way I see it there's three tiers of currency.

Worst: Badly managed fiat currency (Wiemar Republic, Argentina, etc)
Ok: Someone else's, well managed fiat currency. Or a commodity like gold or stone wheels or bitcoin.
Best: Your own, well managed fiat currency, tailored to the needs and current state of your nation's economy.

 

[theoilman]

tjones2[/url]":23gpjjv4]

theoilman[/url]":23gpjjv4]

saru-kun[/url]":23gpjjv4]

Thrasius[/url]":23gpjjv4]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

States in the US have their own budgets under a national currency managed by the federal reserve which is outside state control. The euro is in trouble for other reasons.

US states don't face this issue because the federal budget is enough to stabilize the business cycle. Fiscal and monetary policy can be coordinated on a national level.
I would guess that the Eurozone's issues would go away if most health, retirement, and military spending was ran in Brussels.

The federal budget is mostly loans itself. The US has managed not to miss any payment deadlines thus far by taking more and more loans each year, but there's been a number of close calls.

 

[ZhanMing057]

JPan[/url]":3vfwukit]

coslie[/url]":3vfwukit]

bluesdrivemonster[/url]":3vfwukit]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.

Bullshit. The current government was willing to increase taxes on pretty much everybody. Problem is that this does not fix their economic problems. What they need to do is open labour laws and stop early pensioning. Because getting more people to work is essential for it to work out. And yes there were some cuts as well they are running out of money quickly because nobody trusts them anymore.
But especially the IMF wasn't content with that they wanted them to do actual structural reforms that would help the economy to get better in the long run. You know the kind of stuff Spain did which was really painful but now led to them being the fastest growing country in Europe. Still early days but ...

The problem is that this runs anathema to the politics of the current government they are a radical left party who
- reversed privatisations ( they can be bad but the public sector in Greece is so terrible that this is necessary
- stopped opening the labour market ( which is key to get the country back up )
- rehired state employees ( the one thing they need to reduce because a lot of them are just dead weight )

This policy of very strict labour laws and a still very big public sector leads to the fact that greek labour costs are still as high as in 2007 and the whole country is not competitive but lots of people are out of work. With a drachma they could deflate their currency but without it they need reforms. And the current government is completely opposed to them.

Hell Greece still doesn't have a land register. They got 150m from the EU a couple years back which resulted in nothing and the minister in charge said " Well this is Greece".

Or the other Syriza guy who just said regarding pensioners not getting their pension " Money is only paper, it will be found"

So basically the problem is not the money. The problem is that this was a country heavily living over its possibilities and now being ruled by a bunch of guys who think money is just paper. They take their democratic right not to implement the proposed reforms and the rest of Europe takes their democratic right not to give them anymore money.

And yes their debt is unsustainable in the long run but they only have to pay less as percentage of GDP now than France because the interest rates are so low. The problem is that while Spain,Portugal, Estonia, Ireland, Slowakia etc. reformed a lot Greece did not. Don't get me wrong they cut a lot but they didn't make any reforms that would actually make the country work better.

And the biggest problem is that nobody trusts the new government anymore. They always talk about the things they want to reform but they have done jackshit. They had 6 months now they could have heavily done some of the reforms that make sense to everybody. There is enough to do. But the only thing they produce is hot air. First they need to reform THEN the debt can be cut. Not the other way round.

This. Tax evasion is massive in Greece. Labor costs are noncompetitive compared to pretty much every other nation in the EU. Integration efforts have largely fallen flat. Greece places last in virtually every single metric for EU integration. How do you help a government who seems flat out unwilling to help itself?

I'll acknowledge the stupid ideas the IMF has had over the years. But time has proved that the policies they pushed in the EU actually works. It worked for Spain and France, and to a lesser extent Estonia and Italy. These are precisely the policies that Greece seems hell bent on rejecting. As you've pointed out, the Greek government has actually taken steps in the exact opposite direction.

 

[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.

 

[Oz7]

yester64[/url]":37z4futa]

Thrasius[/url]":37z4futa]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis.

Maybe this one

In 2007, Greece had public debt of slightly more than 100 percent of GDP — high, but not out of line with levels that many countries including, for example, the UK have carried for decades and even generations at a stretch. It had a budget deficit of about 7 percent of GDP. If we think that normal times involve 2 percent growth and 2 percent inflation, a deficit of 4 percent of GDP would be consistent with a stable debt/GDP ratio; so the fiscal gap was around 3 points, not trivial but hardly something that should have been impossible to close.

Now, the IMF says that the structural deficit was much larger — but this reflects its estimate that the Greek economy was operating 10 percent above capacity, which I don’t believe for a minute. (The problem here is the way standard methods for estimating potential output cause any large slump to propagate back into a reinterpretation of history, interpreting the past as an unsustainable boom.)

So yes, Greece was overspending, but not by all that much. It was over indebted, but again not by all that much. How did this turn into a catastrophe that among other things saw debt soar to 170 percent of GDP despite savage austerity?

 

[tjones2]

theoilman[/url]":2072wnv7]

tjones2[/url]":2072wnv7]

theoilman[/url]":2072wnv7]

saru-kun[/url]":2072wnv7]

Thrasius[/url]":2072wnv7]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

This is basically what I meant when I said that the Euro is flawed. You can't have a nation that controls its own budget, but does not control its own currency. Its just a bad idea, and Greece is the proof. Greece is obviously not blameless, but they are also not entirely responsible (except in that they joined the Eurozone in the first place, but it probably seemed like a good idea at the time).

States in the US have their own budgets under a national currency managed by the federal reserve which is outside state control. The euro is in trouble for other reasons.

US states don't face this issue because the federal budget is enough to stabilize the business cycle. Fiscal and monetary policy can be coordinated on a national level.
I would guess that the Eurozone's issues would go away if most health, retirement, and military spending was ran in Brussels.

The federal budget is mostly loans itself. The US has managed not to miss any payment deadlines thus far by taking more and more loans each year, but there's been a number of close calls.

Loans in a currency you control are way different than loans in one you don't.
The close calls in the US were because the Tea Party was holding up debt payments for political leverage.
Greece's issue is there is no way they can pay their debts without a massive recession. Such an issue would be effectively impossible in the US.

 

[gmerrick]

coniferae[/url]":2npio7lr]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!

no the 3 euro is to make this specific 1.6 billion euro payment that is about to be missed. Greece borrowed about 220billion euros. So this is a drop in the bucket. almost an interest payment really.