[Chichikov]

Eagerly await the excuses of the Austrian-schoolers. "We just didn't austerity hard enough!"

Why do they need excuses?
It's not like the believe in empiricism.

[SoulPlaya]

Aren't they expecting record losses this year? Over $2billion or something like that.

Chase just lost $2 bil over a bad deal they did in Europe. I would think that that's chump change to them, though.

[Frankfurter]

Paul Krugman's latest blog: http://krugman.blogs.nytimes.com/201...rodammerung-2/ Complete and total failure of austerity due to Germany's strategy of promoting "market confidence" is about to cause on of the greatest crisis in Europe's recent history. And only 4 years ago, with the implementation of pro-growth strategy, everything could have been prevented.

So in a situation where Greece had a budget deficit of 15% of GDP and a debt to GDP ratio of about 130% (2009 numbers) you actually think that a "pro-growth strategy" could have prevented everything? Now, feel free to call me one of those austerity supporters*, but I'd actually argue that the "pro-growth strategy" (i.e.: let's just throw money out of the window and see if it happens to produce sth.) is what brought Greece into this whole mess.



* I'm (more or less) supporting the initial measures, while on the other hand I'm strongly opposing the stuff that followed. After certain cuts were under way (say in 2010 for a given country) that country should have been given the time to wait and see how the economy, the budget etc. are actually effected and to prevent to get these countries into even more trouble.

[Lagspike_exe]

It's been remarkable to see them double down on this so long. It's like arguing they'll get better if they just slit their wrists more thoroughly this time.

Some people don't want to look at the hard evidence (The Great Depressions), older people are against the inflation as it damages their retirement savings, politicians like to talk about it as people are afraid of the country going "bankrupt". If these groups become the leading force in society, this is the result.

[Cyan]

So in a situation where Greece had a budget deficit of 15% of GDP and a debt to GDP ratio of about 130% (2009 numbers) you actually think that a "pro-growth strategy" could have prevented everything? Now, feel free to call me one of those austerity supporters*, but I'd actually argue that the "pro-growth strategy" (i.e.: let's just throw money out of the window and see if it happens to produce sth.) is what brought Greece into this whole mess.

Eh? No, they should've ditched the Euro to begin with. Wouldn't have prevented all their problems, but they'd be on their way back up by now.

[Frankfurter]

Eh? No, they should've ditched the Euro to begin with. Wouldn't have prevented all their problems, but they'd be on their way back up by now.

Well, I guess they actually shouldn't have joined the Euro to begin with.

[norinrad]

Well, I guess they actually shouldn't have joined the Euro to begin with.

Think Goldman Sachs

[SRG01]

So in a situation where Greece had a budget deficit of 15% of GDP and a debt to GDP ratio of about 130% (2009 numbers) you actually think that a "pro-growth strategy" could have prevented everything? Now, feel free to call me one of those austerity supporters*, but I'd actually argue that the "pro-growth strategy" (i.e.: let's just throw money out of the window and see if it happens to produce sth.) is what brought Greece into this whole mess. * I'm (more or less) supporting the initial measures, while on the other hand I'm strongly opposing the stuff that followed. After certain cuts were under way (say in 2010 for a given country) that country should have been given the time to wait and see how the economy, the budget etc. are actually effected and to prevent to get these countries into even more trouble.

Completely agreed. We seem to be forgetting what hot Greece into this mess in the first place.

That being said, I'm of the camp that Greece would've failed regardless of austerity or stimulus. We were just delaying the inevitable, considering Greece gave away their monetary controls with the adoption of the Euro.

[empty vessel]

Don't blame the EU, blame the morons who keep voting the same assholes into power every four years.

Modern Monetary Theorists in fact do blame the EU. Specifically, the Eurozone's structure. They have predicted failure of the Eurozone from the start based the lack of central fiscal authority.

http://seekingalpha.com/article/3059...-last-20-years

Basically, it was doomed from the beginning.

[Chichikov]

So in a situation where Greece had a budget deficit of 15% of GDP and a debt to GDP ratio of about 130% (2009 numbers) you actually think that a "pro-growth strategy" could have prevented everything? Now, feel free to call me one of those austerity supporters*, but I'd actually argue that the "pro-growth strategy" (i.e.: let's just throw money out of the window and see if it happens to produce sth.) is what brought Greece into this whole mess. * I'm (more or less) supporting the initial measures, while on the other hand I'm strongly opposing the stuff that followed. After certain cuts were under way (say in 2010 for a given country) that country should have been given the time to wait and see how the economy, the budget etc. are actually effected and to prevent to get these countries into even more trouble.

Greek was probably fucked either way, but I think they would've been better off if they were able to do some currency devaluation.

But again, Greece is not big enough to drag the eurozone down, it's Spain and Italy, it's the fear of the domino effect.

[Dawb]

The hubris of the unaccountable and unelected elites of the EU finally meets nemesis.

[Chichikov]

The hubris of the unaccountable and unelected elites of the EU finally meets nemesis.

I don't think it's an issue of personal failings.
It's a failure of policy.
And it's best understood through boring ass economic talk, not moralizing tales of the out of touch elites.

Also, Angela Merkel was elected.

[Fallout-NL]

Too bad the game won't work when they turn off the Internet

Hence the hope for a few months of light :P.

[poisonelf]

So in a situation where Greece had a budget deficit of 15% of GDP and a debt to GDP ratio of about 130% (2009 numbers) you actually think that a "pro-growth strategy" could have prevented everything? Now, feel free to call me one of those austerity supporters*, but I'd actually argue that the "pro-growth strategy" (i.e.: let's just throw money out of the window and see if it happens to produce sth.) is what brought Greece into this whole mess. * I'm (more or less) supporting the initial measures, while on the other hand I'm strongly opposing the stuff that followed. After certain cuts were under way (say in 2010 for a given country) that country should have been given the time to wait and see how the economy, the budget etc. are actually effected and to prevent to get these countries into even more trouble.

That deficit of 15% is very, very much debatable. There are articles and interviews supporting both sides. The new Greek Stat head, ex IMF member, included debts of organizations that most countries don't include and it was not required to include them.

He has already been sued for these by other members of Greek Stat and it's an ongoing investigation, along with Papandreou's possible guilt over deliberately driving Greece to the IMF.

There is a Strauss Kahn interview I've provided in past posts during which he reveals that he was in talks with Papandreou long before, but that Papandreou didn't want it to go public (during which time Papandreou claimed there is enough money and no need for borrowing).

After the inflation of the deficit Papandreou, along with then finances minister Papakonstantinou, went on an unbelievable tour throughout Europe slandering Greece, saying everything is about to collapse, the economy is dead, leading the 'markets' to panic and driving the loan spreads sky-high.

It's not as simple as you think

[subversus]

I'm fucking tired of Krugman. It's cool that he's got a Nobel prize but he has been preaching doom and gloom since like forever and I just can't take this shit seriously anymore. Yes, he may be right about 1) but 2) 3) and 4) is too far fetched as usual. I remember everybody was ready for almost immediate Euro's death in 2011, nothing happened. It will die eventually but it won't be as dramatic as everybody imagines.

[Dawb]

I don't think it's an issue of personal failings. It's a failure of policy. And it's best understood through boring ass economic talk, not moralizing tales of the out of touch elites. Also, Angela Merkel was elected.

A centralised monetary policy was never going to suit the 17 diverse economies of the Member States of the eurozone. It was a political project built upon the hubris of the European elites, the economics were never sound.

[IceCold]

Mmmh... I don't know if I should convert the couple hundred bucks that I have in Euros right now.

[Frankfurter]

That deficit of 15% is very, very much debatable. There are articles and interviews supporting both sides. The new Greek Stat head, ex IMF member, included debts of organizations that most countries don't include and it was not required to include them. He has already been sued for these by other members of Greek Stat and it's an ongoing investigation, along with Papandreou's possible guilt over deliberately driving Greece to the IMF. There is a Strauss Kahn interview I've provided in past posts during which he reveals that he was in talks with Papandreou long before, but that Papandreou didn't want it to go public (during which time Papandreou claimed there is enough money and no need for borrowing). After the inflation of the deficit Papandreou, along with then finances minister Papakonstantinou, went on an unbelievable tour throughout Europe slandering Greece, saying everything is about to collapse, the economy is dead, leading the 'markets' to panic and driving the loan spreads sky-high. It's not as simple as you think

Don't get me wrong, but I definitely don't buy that. There is no reason for a Greek politician to inflate the budget deficit of your own country and make it dependend on foreign support. Unless we are expecting that said politician was out of his mind.

[Lagspike_exe]

So in a situation where Greece had a budget deficit of 15% of GDP and a debt to GDP ratio of about 130% (2009 numbers) you actually think that a "pro-growth strategy" could have prevented everything? Now, feel free to call me one of those austerity supporters*, but I'd actually argue that the "pro-growth strategy" (i.e.: let's just throw money out of the window and see if it happens to produce sth.) is what brought Greece into this whole mess. * I'm (more or less) supporting the initial measures, while on the other hand I'm strongly opposing the stuff that followed. After certain cuts were under way (say in 2010 for a given country) that country should have been given the time to wait and see how the economy, the budget etc. are actually effected and to prevent to get these countries into even more trouble.

UK, who recently adopted an austerity strategy, is also in a recession. The first in decades.

Greek issue is of course more complex than just austerity vs. pump more money. But their debt did skyrocket after austerity was implemented.

http://upload.wikimedia.org/wikipedi..._1999-2010.svg

[poisonelf]

Don't get me wrong, but I definitely don't buy that. There is no reason for a Greek politician to inflate the budget deficit of your own country and make it dependend on foreign support. Unless we are expecting that said politician was out of his mind.

It's not about buying it or not. It's about facts.
From some past posts of mine:

Regarding the deficit:
Georgiou was the head of Hellenic Statistical Authority (ELSTAT), former member of the IMF (...), who is being accused of inflating Greek deficit during 2009, along with Papandreou and financial minister then Papakonstantinou, as to make the coming of the IMF look necessary.
He included public hospital debts, which is not required, to present a much higher deficit.

Charges were first pressed by member of ELSTAT, and professor of econometrics, Zoe Georgantas, and have since been supported by various findings and by the DEAs on the case.


Regarding Papandreou's total fraud in order to get elected, and you decide whether he seems schizophrenic or simply works to deliver the country to specific mechanisms:

1: The "Lefta Iparhoun" videos (Money is here - no need to borrow):

http://www.youtube.com/watch?v=V3RVWA7uLmw
http://www.youtube.com/watch?v=NyPX6...eature=related

In Greek obviously I'm afraid. There are tens of videos making fun of that phrase at this point.
He essentially keeps claiming he knows that Greece has enough money and does not need austerity or borrowing.


The Strauss Kahn interview about how going to the IMF was pre-planned: http://www.youtube.com/watch?feature...&v=vIsvVZl16VA

Starts at 0:43 - saying that "we worked for months before, underground. The Greek authorities didn't want the people to know, Papandreou didn't want them to know for political reasons".

Video starts with a Greek guy presenting the video, skip the first 42 seconds. Interview is in French, I can't find it with captions. I think there are quite a few French speaking people here to confirm what he's saying if needed.

Interview with Papandreou about IMF, before being elected, unfortunately in Greek.

http://www.youtube.com/watch?v=f4xvmNs6AVE I

He says that "IMF goes to nations and cuts spending from important sectors,
such as education, destroying the future of the nation and condemning it to devolution. We have no reason to ever do this, it would be negative for our country."

These are 3 interesting videos with Papandreou interviews, in English:
He's claiming in each one of them, after being elected of course, that he is a proponent of global financial government and that this is what we need:
http://www.youtube.com/watch?v=N4D_Q...layer_embedded
http://www.youtube.com/watch?v=keC4r...layer_embedded
http://www.youtube.com/watch?feature...&v=TFSapBTHxrU

Here he is holding a T-Shirt saying EYATH (public tap water) is not for sale, which he is now selling:




An interesting video of the incident, where this schizophrenic politician claims that "under no circumstances should a Democratic country country face social issues through the use of tear gasses", and then shows Papandreou's use of immense quantities of chemicals during the June protests:

http://www.dailymotion.com/video/xjm...2009-2011_news


About his journey throughout Europe along with Papakonstantinou claiming that Greece is corrupt, collapsing, dead economically etc, I'll need to search some more. It's common knowledge here in Greece, not even disputed since there endless statements he made, but I understand how weird these must look to you.

[Learn2read]

I'm fucking tired of Krugman. It's cool that he's got a Nobel prize but he has been preaching doom and gloom since like forever and I just can't take this shit seriously anymore. Yes, he may be right about 1) but 2) 3) and 4) is too far fetched as usual. I remember everybody was ready for almost immediate Euro's death in 2011, nothing happened. It will die eventually but it won't be as dramatic as everybody imagines.

Please provide links.

He's been saying since the crisis started that all the austarity measures have been counterproductive - and he's been right.

He's been saying since the crisis started that all the "bailouts" have been doing is kicking the can down the road, not fixing anything - and he's been right.

Also, I believe he just came back from the EU and 2) 3) and 4) isn't an some proclamation of doom, but just sharing his conversations with others that are familar (maybe more than him) with the politics of the situation.

[Speedymanic]

UK is going to be hit hard by this, if it does happen.

I wonder if Osbourne will finally accept his plan isn't working and come up with a new plan.

[megateto]

So what can a Spaniard gaffer do with his savings now?

It's just depressing to lack proper knowledge of basic economics when reading stuff from Krugman. Even worse, it scares the shit out of me.

[Piecake]

So what can a Spaniard gaffer do with his savings now? It's just depressing to lack proper knowledge of basic economics when reading stuff from Krugman. Even worse, it scares the shit out of me.

invest in US stock or bonds?

[itxaka]

So what can a Spaniard gaffer do with his savings now? It's just depressing to lack proper knowledge of basic economics when reading stuff from Krugman. Even worse, it scares the shit out of me.

Buy gold, do not let anyone know you have it. Buy it without receips, no written transaction of it. That is the best I got.

It is funny isn't it? I been working the last 7 years, paying my taxes and spending money locally and now suddenly we are fucked and it's all the people's fault.

I just don't understand this shit anymore. The faster we fail and wake up the better IMO. Some politicians need to be walking the plank, and the only way it's if we lose it all.

[Alpha-Bromega]

it's pretty much accepted by everyone now that the austerity politics of Europe have fucking failed

[jchap]

it's pretty much accepted by everyone now that the austerity politics of Europe have fucking failed

But the policies that got them to the point where they tried austerity were awesome :)

Nothing was going to save Europe.

[Flatline]

Didn't he get schooled by Ron Paul recently? http://www.youtube.com/watch?v=WEoGKpnutyA

Are you kidding me? Ron Paul is talking out of his ass repeating the same crap about liberty and freedom while Krugman argues giving specific evidence and specific examples.

[Phoenician_Viking]

Shit. This crisis will fuck up Europe really bad. The best thing for the Greek people is to get out of the Euro.

[dude]

Didn't he get schooled by Ron Paul recently? http://www.youtube.com/watch?v=WEoGKpnutyA

I think most people would chalk me up to the "free market" camp, but in this debate Ron Paul is mostly just blabbering buzzwords and nonsense...

[SlipperySlope]

Paul Krugman's latest blog: http://krugman.blogs.nytimes.com/201...rodammerung-2/ Complete and total failure of austerity due to Germany's strategy of promoting "market confidence" is about to cause on of the greatest crisis in Europe's recent history. And only 4 years ago, with the implementation of pro-growth strategy, everything could have been prevented.

Yeah, because spending more is really helping the US :/

(hint, since the recession began, yearly federal expenditures have increased by $600 billion).

[Jonm1010]

I think most people would chalk me up to the "free market" camp, but in this debate Ron Paul is mostly just blabbering buzzwords and nonsense...

Yeah half the time his first sentence had nothing to do with his second sentence and then he just name dropped how evil the Fed was in the third sentence.....most of what he said came off completely incoherent.

[dude]

Yeah half the time his first sentence had nothing to do with his second sentence and then he just name dropped how evil the Fed was in the third sentence.....most of what he said came off completely incoherent.

I want to try a drinking game - Drink every time he says "Big Government".

[Zaraki_Kenpachi]

Buy gold, do not let anyone know you have it. Buy it without receips, no written transaction of it. That is the best I got. It is funny isn't it? I been working the last 7 years, paying my taxes and spending money locally and now suddenly we are fucked and it's all the people's fault. I just don't understand this shit anymore. The faster we fail and wake up the better IMO. Some politicians need to be walking the plank, and the only way it's if we lose it all.

What does "Lose it all" mean?

[johnsmith]

Yeah, because spending more is really helping the US :/ (hint, since the recession began, yearly federal expenditures have increased by $600 billion).

US GDP has kept rising, while many European countries still have lower GPD than they had in 2008, and unemployment is lower than Europe's. Overall we've done much better and it's because we didn't cut spending at the Federal level. Things aren't great in the US, but they'd be much worse if we had tried European style austerity.

[criesofthepast]

So what does this mean to people traveling to Europe soon? Will the Euro drop heavily from this or what?

It means my dream home in the south of Italy is about to get a lot cheaper than it already is.

[ElectricBlue187]

Yeah, because spending more is really helping the US :/ (hint, since the recession began, yearly federal expenditures have increased by $600 billion).

Federal expenditures probably kept a lot of Gafers from standing in bread lines. Keynesian economics have been an unqualified success in this crisis for the US.

[Jonm1010]

I want to try a drinking game - Drink every time he says "Big Government".

I'll be in the ambulance before the 12 minute mark.

[Ripclawe]

For the last 4 years people keep making threads talking about impending economic doom and it never happens. Just saying...

Hi!

Been saying it for years and the #1 reason was shitty budgets and overspending beyond their means. Everything is coming together as predicted because Europe never normalized financial conditions across the board.

Federal expenditures probably kept a lot of Gafers from standing in bread lines. Keynesian economics have been an unqualified success in this crisis for the US.

Good thing we never have to pay for all that credit spending and interest payments because its just government spending.

[Jonm1010]

US GDP has kept rising, while many European countries still have lower GPD than they had in 2008, and unemployment is lower than Europe's. Overall we've done much better and it's because we didn't cut spending at the Federal level. Things aren't great in the US, but they'd be much worse if we had tried European style austerity.

I really just don't understand the logic of people like slipperyslope.

I mean do these people not realize that cutting spending has consequences during a period of low private employment growth?

If the private sector is unable to absorb those people that will be layed off as a result of spending cuts you INCREASE unemployment and reduce revenue. Furthermore you INCREASE consumption of government safety net programs and increase a burden on the various governments. Be it state, local or federal. Cuts don't occur in a vacuum and in a time of such low employment they have very harsh costs. It's not to say everything is sacrosanct but in a period like this it is a very delicate game to play. We see what drastic austerity has done in various countries under these circumstances and I just don't follow why people think the outcome will be so different here?

[Chris1964]

Greek issue is of course more complex than just austerity vs. pump more money. But their debt did skyrocket after austerity was implemented.

This is a reality known to very few people outside and even inside Greece and media very carefully hide it.

Debt isn't the only problem that skyrocketed after austerity was implemented.

[Dawb]

Hi! Been saying it for years and the #1 reason was shitty budgets and overspending beyond their means. Everything is coming together as predicted because Europe never normalized financial conditions across the board.

The expectation was that the economies would converge with the single currency, the opposite happened. A Greek default and devaluation is the most likely outcome of the present situation, and perhaps the 'least bad' situation in the long term.

[Ripclawe]

I really just don't understand the logic of people like slipperyslope. I mean do these people not realize that cutting spending has consequences during a period of low private employment growth? If the private sector is unable to absorb those people that will be layed off as a result of spending cuts you INCREASE unemployment and reduce revenue. Furthermore you INCREASE consumption of government safety net programs and increase a burden on the various governments. Be it state, local or federal. Cuts don't occur in a vacuum and in a time of such low employment they have very harsh costs. It's not to say everything is sacrosanct but in a period like this it is a very delicate game to play. We see what drastic austerity has done in various countries under these circumstances and I just don't follow why people think the outcome will be so different here?

these countries are broke, they can't keep spending what they don't have so you either take the pain now for better growth management in the future or you just get screwed even worse.

If you can't cut now then when? in the good times? all these government programs are funded by revenue taken from the private sector. The more you tax them the worse it will be. Take the lumps now.

[empty vessel]

Yeah, because spending more is really helping the US :/

It has. Quite substantially, in fact.

(hint, since the recession began, yearly federal expenditures have increased by $600 billion).

Far too little, but it did prevent a sustained depression and even higher unemployment.

Hi! Been saying it for years and the #1 reason was shitty budgets and overspending beyond their means. Everything is coming together as predicted because Europe never normalized financial conditions across the board.

The problem wasn't government spending. It was the lack of currency sovereignty (dependence on an effectively foreign currency) that imposed on the governments a requirement of borrowing and ultimately fealty to private capital. But that was a political choice. A terribly ill-advised one, but a choice nonetheless.

[Jonm1010]

these countries are broke, they can't keep spending what they don't have so you either take the pain now for better growth management in the future or you just get screwed even worse. If you can't cut now then when? in the good times? all these government programs are funded by revenue taken from the private sector. The more you tax them the worse it will be. Take the lumps now.

I'm specifically referring to America where the ability to deficit spend to increase growth and employment is still available(political ability not withstanding).

[shira]

It would be sad day to see Euro go, I really hope it won't come to that :( Can't we plan stimulus packages like US did? Well, anyway I do hope euro zone gets through this.

Lol, don't sell your future

[Sealda]

Is this not just very simple.


If you export less than you import. If you loan money to finance your import. Eventually things will get bad!

They are basically doing the opposite of what China are doing.

[Flatline]

But the policies that got them to the point where they tried austerity were awesome :) Nothing was going to save Europe.

They came to the point where they tried austerity not because of the policies they had but because of the global banking meltdown.

[Neo C.]

I still got a nice amount of Euros in the bank, I would hate to see it becoming worthless. But besides that, I'm ready for a wild ride.

Anyway, the austerity policy failed. The greeks should take the money from the rich greeks by force, they have enough money to save the country.

[2San]

It wasn't the policies that got them to that point, it was the economic recession and the austerity that followed.

Keeping the spending on the same level, doesn't seem like a durable strategy.