Escape Goat
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Ethan Hunt, what have you done
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IMF "experts" finally admit they screwed over Greece
- Thread starter TheLaughingStock
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Abstrusity
Member
> It acknowledges that its forecasts were overly optimistic, which justified the front-loaded and historically deep budget deficit reduction condition that created one of the longest and deepest contractions ever recorded. This, in turn, led to a rising debt to GDP ratio, the opposite of the stated goal.
Read: What the GOP uses as economic policy. Cut budgets and you'll cut deficits!
No, cut budgets and you cut deficits, but you'll cut revenues even further.
I like how the end of the article there says that it was Keynes' lost battle when you didn't fucking listen to what he would have said.
Read: What the GOP uses as economic policy. Cut budgets and you'll cut deficits!
No, cut budgets and you cut deficits, but you'll cut revenues even further.
I like how the end of the article there says that it was Keynes' lost battle when you didn't fucking listen to what he would have said.
To be really fair to the IMF (and they made many mistakes), Greece was an absolute shit-show at the time, and half of the country was adamantly opposed to reigning in spending in any substantial way.
I think what you saw from the IMF, World Bank, EU (especially Germany and the UK) was an extreme over-reaction to the lack of serious movement in Greece to correct their very real systemic issues.
I think most of what the IMF did wrong could very easily be construed as two sides that refused to meet in the middle so staked out untenable extreme positions in opposition to one another.
I think what you saw from the IMF, World Bank, EU (especially Germany and the UK) was an extreme over-reaction to the lack of serious movement in Greece to correct their very real systemic issues.
I think most of what the IMF did wrong could very easily be construed as two sides that refused to meet in the middle so staked out untenable extreme positions in opposition to one another.
It's not like the Greek government had any real power in this relationship. They had to accept everything that was dictated, most of which didn't take the countries realities in to any consideration. This had predictably poor results, partly also because their bureaucracy is ineffective as hell, resulting in more money to just keep everything afloat. Rinse and repeat.
In the end, none of this addresses the real elephant in the room, which is an economy that is not able to produce enough capita such that the taxes could pay back the debts. It's an infinite loop, that is being kept alive by more public money from other EU countries.
Agreed. They should have never been in the euro to begin with but the reaction was out of line and refused to look at the reality on the ground.
I'm still not sure why both parties haven't just bit the bullet and moved the Greeks out at this point. It's the only practical solution.
Kremzeek
Member
Exactly. The IMF exists just to make rich people & bankers even more rich, under the guise of "helping" countries.
Napalm_Frank
Member
gasp
BadenBadenLily
Banned
Economics is a joke and by far the most embarrassing of the soft "sciences".
Yea IMF seems like a Banking Cartel of thugs
sechsterangriff
Member
I'll never say "fuck the IMF/EU/Merkel/etc". People need to understand that no matter how much they think things were/are bad, things could exponentially be much worse. Just like in Greece there were systemic issues that led the country to the point where the government needed to borrow money just to function yet no one was willing to do that at reasonable interest rates. Think about it. No pensions being paid, no salaries for public workers.
They (IMF and the EU) were the only ones willing to lend money and in exchange they rightly demanded for serious reforms. The thing is that not only some demands were unreasonable (if you actually expect being paid back) given the reality and specifics of each country but austerity was many times applied blindly and not accompanied with reforms. Sometimes these didn't happen either because of incompetence, political opposition or because sometimes clash with established interests.
Things are much more stable now thanks to the help from the ECB and the economy recover that while still very fragile is showing good signs.
Didn't the IMF also come out against the 2008 burst and Reaganomics years after they were seen to be failures?
Seems they've done the exact same thing here.
It's okay, IMF. Having Greece shrivel up by a third to where people have to sell their children for sex to afford sandwiches is quite okay because..well, you'll find some excuse to justify it as a Black Swan event.
Seems they've done the exact same thing here.
It's okay, IMF. Having Greece shrivel up by a third to where people have to sell their children for sex to afford sandwiches is quite okay because..well, you'll find some excuse to justify it as a Black Swan event.
I do not know if your numbers prosper because the people i know do not.
Mark Blyth properly explains why the EU creates problems like Greece.
The right response right now is "Fuck the IMF and the system that placates austerity en masse to places like Greece," so that may also mean "Fuck Merkel and the EU," which unfortunately is a neonationalist stance..
Every institution at first mocked and said that we would not have growth or even have a low deficit, now they seem perplexed and puzzled(neo liberals that know jack shit of economics) by how we become the fastest growing economy in the EU and doing it with a left coalition in power and left leaning politics.
Coriolanus
Banned
Indeed, the problem is that those things are endemic to the greek political system, and thus will not be easily solved. Heck, i'd go so far as to say that they simply will not be solved at all, regardless of whoever the greeks elect, as the current administration is showing.
Thus, any solution that expects an endemically corrupt system to... stop being corrupt is doomed to failure. The good thing about a return to the drachma is that it doesn't need to fix corruption to work. Will it be a perfect solution? Of course not. Nothing will. It will, however, be a workable solution, as most of the fantastically corrupt countries in South America continue to show.
If memory serves, the US learned a somewhat similar lesson in afghanistan. And heck, that was with the complete uprooting and replacement of the previous power.
Not really, no. You'd find no shortage of economists saying that there wasn't a whole lot of reason to think that austerity would achieve anything in that setting. The problem is that, much like climate science, there's always some people willing to defend the other stance.
We are not the fastest growing economy.
I concede that the solution is doing better than expected but the whole story was not told.
Growth lower than 2015 - the last year of the previous government, the "austerity" one. Unemployment is decreasing since 2013. Deficit limit was achieved, much easier if starting point from 2015 was 3% and not near double digits plus the help again of extraordinary measures such as lowest public sector investment in 40 years. Debt rate doubled with this government, a big chunk by ECB, which in a few months has to lower the amount for Portugal. Government did also general tax increase last year but called another thing different from austerity. 10 year bonds are 4%, far from normal and ideal. Despite of this it is true there is more general confidence but I'm more sceptical.
A big help was the big tourism increase that was a bless for the last few years.
I agree, a little shake and this can crumble again.
probably because they didn't tell them that Schäuble was pretty much bailing out their private retirement schemes they have been tricked into ~15 years prior. Guess politicians back than didn't expect their Riester-Rente to heavily invest in Greece.
Therefore they were never going to grant Greece a debt relief. not when German pensions were on the line - and as a nice side effect they made millions of of greek debt.
It is very hard to separate economics from the political and the normative, and it's not really safe to assume that economics actually had much input here.
https://np.reddit.com/r/changemyvie...ink_economics_is_largely_a_backwards/cknl9ut/
Also, I'm really sure the scare quotes around the word sciences are really necessary.
Right, the economics were well understood, but economics and politics don't mesh. You have Blanchard on record in a May 2010 memorandum to Thomsen saying that even if the program were followed in full it could easily go off track and it would wreck havoc, not to mention that such cuts were practically unachievable to begin with, paraphrasing Blanchard. The economists with the IMF understood how extremely impractical the program was to begin with, but politics and economics are tough to balance.
My thoughts.. But hey, you can theoretically take over a country financially by making them pay for life... Propping up failing banks is just an added bonus.
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