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Can austerity work in Greece? Does it have any lessons for us?

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Beware of Greeks bearing gifts

Post by witchfinder on Wed Nov 02, 2011 11:08 am

First topic message reminder :

When the Greeks wanted to get inside Troy, they built the "Trojan Horse" and presented it as a gift to the people of Troy, however some citizens were very suspicious and hence the phrase was coined "beware of Greeks bearing gifts".

Of course the wooden horse was not what it seemed, it realy was a ploy to get inside the city, the huge wooden structure had soldiers inside it, I guess this is what we term as been "a great deception".

And in recent years, the Greeks have committed another great deception, the modern equivelant of that ancient wooden horse story is the story of the Greek economy, and the unseen enemy has not been soldiers hidden within it like in the biblical story, the dark secret this time has been hidden debt.

If the Greeks had been honest at the time of joining the Euro, and also in the time since then, then this crisis would have been avoided, the Greeks have deliberately hidden the true scale of both their national debt and the defecit they were running.

The problem for Greece has been a story of two lots of debt, the debt run up due to the world-wide financial crisis and recession, and then theres the debt accumulated through uncontrolled government spending, added together pushes Greece s total debt up into the "imminent danger" zone.

CONCLUSION

As a collective, the members of the Eurozone must now surrender their individual fiscal sovereignty to "The Collective", there must be lessons learned from all this, an individual member state should not be able to drag the others down due to incompetence or hiding uncontrolled spending.

THere is only one option open for Greece if they want to return to prosperity and stability, and that is to go along with the bailout including the spending reductions and tax raising plans, stay within the EU and the Euro and do as they are told, there are other options open to Greece, but these other options will not lead to a return to prosperity or stability.









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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Papaumau on Fri Mar 09, 2012 2:14 pm


Thanks for that interesting illustration Stox16 !

I think that after reading all of that you have very aptly proved that both quantative easing and austerity drives simply don't work and all that results is that the people on the ground suffer as that extra paper gets lost in the machine and prices keep going up and up while wages for the ordinary people either stop rising or in many cases contract.

With that thought in mind I have to ask - as you just showed - why do this government think that they can keep blaming New-labour for all of Britain's and Europe's woes when their austerity plans have only succeeded in making the people poorer, the economy contract and have not in fact cut any of the borrowing that the old regime gets so badly vilified for ?.

Regards....

Papaumau.

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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by oftenwrong on Fri Mar 09, 2012 5:40 pm

" why do this government think that they can keep blaming New-labour for all of Britain's and Europe's woes ....?"

Well I suppose they feel they have to say SOMETHING, even though they don't actually give a monkeys.

They're IN CHARGE, and that's all that matters to them.
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Stox 16 on Sat Mar 10, 2012 5:01 am

Papaumau wrote:
Thanks for that interesting illustration Stox16 !

I think that after reading all of that you have very aptly proved that both quantative easing and austerity drives simply don't work and all that results is that the people on the ground suffer as that extra paper gets lost in the machine and prices keep going up and up while wages for the ordinary people either stop rising or in many cases contract.

With that thought in mind I have to ask - as you just showed - why do this government think that they can keep blaming New-labour for all of Britain's and Europe's woes when their austerity plans have only succeeded in making the people poorer, the economy contract and have not in fact cut any of the borrowing that the old regime gets so badly vilified for ?.

Regards....

Papaumau.

hello papa
thanks for what you have said..yes I do believe very strongly that Austerity as a economic policy with out a fiscal growth policy is doomed to fail..this is what Greece is now finding out....as you right..its the ordinary people who are asked to paid the higher price for the failing of a world banking system they have no real control over.. I feel deeply for what is being asked of them...as its just not realistic in my own view..

Well your 2nd point. is in my view most interesting. I have posted on this very subject else where..but as you have asked I feel its quite right to post it here as well.... I hope this will answer your points? sorry its long but then it has too be Papa..What is quite clear is that today's Government is stacking up and hiding a great deal of long term debt..see what you think of what is written and then we will chat some more Papa.

Cheers my friend
STOX

MYTH: Government debt is the highest it's ever been

The UK's government debt is at around 70 per cent of GDP (the total amount of goods and services produced in one year). That is certainly high, but it is far from unprecedented.

Government debt never fell below 100 per cent of GDP between 1920 and 1960. It is only in the past decade or so that it has become normal to think of government debt being stable at around 40 per cent of GDP.

It is worth noting that government debt reached 250 per cent of GDP around the end of the second world war, as the result of a 'once in a generation' economic and political crisis. It is certainly arguable that we are now living through a similarly momentous crisis.

MYTH: The UK's debt crisis is one of the worst in the world

Just as the current level of government debt is not unprecedented historically, neither is it substantially higher than that of other countries.

IMF data (IMF World Economic Outlook Database, April 2010) shows the UK has the lowest government debt as a proportion of GDP among the G7 countries (the US, Canada, Germany, Britain, Japan, Italy and France).

Much has been made by Cameron and Osborne of Gordon Brown's 'imprudent borrowing record'. They say that before the spending to stabilise the financial system, public debt was high.

But again, IMF comparisons of the level of public debt prior to 2007 showed the UK in a much better position than many comparable countries, such as France, Canada, the US and even Germany, the home of fiscal rectitude.

MYTH: Government debt is 'unsustainable'

The sustainability of government debt is not just dictated by its size, but by its make up. We have already seen that government debt is at a comparable level to other similarly sized economies. Where the UK is in a much stronger position, however, is in the nature of its debt.

While countries such as Greece tend to owe money to external financiers, the vast majority of UK debt - about 70 to 80 per cent - is held within the country.

And the UK's debt is not so short term. Countries such as Greece, Ireland and Portugal have average debt maturity rates of between six to eight years, but UK government debt stands out among international comparisons as being much longer term at well over 12 years on average.

This means that the UK has to ask the financial markets to refinance its debts much less frequently, making it less vulnerable to short-term speculative pressures and much more able to continue to finance its debts on a sustainable basis.

MYTH: The government shouldn't get into debt, just as your own household shouldn't

This overlooks the fact that, for the past 30 years, governments have positively encouraged households to get into debt.

In fact, it can be prudent for households to take on debt - particularly if they are borrowing to pay for something (a house or educational qualification) that might reasonably be expected to improve the household's income and well being in the long run.

In just the same way it is often sensible for governments to take on debt to pay for investments (such as housing or transport infrastructure) that will make the economy work better and so pay for themselves over the longer term.

But the public economy is also different from the household economy. What might make sense for a household could, for the government, deepen a recession. When times are hard households tend to tighten their belts - reducing their spending and borrowing. But if everyone does this at the same time, the effect is counterproductive: total demand for goods and services falls, which makes it harder for businesses and individuals to generate an income, and everyone ends up worse off.

This is exactly what is happening now, which is why it is essential for the government to compensate for households' reluctance to spend and invest.

MYTH: Public spending got 'out of control' under Labour

It is true that the Labour government gradually raised public spending in the early part of the decade, but it was from what were historically very low levels.

Levels of public spending are now about the same as they were in the early 1990s, at the time of the last economic crisis. This is because spending always rises during a recession as a result of welfare spending on unemployment.

In fact, levels of public spending as a proportion of GDP were much lower for most of the 2000s than they were than at any point since the 1960s.

Where Labour did spend more in the years after 2000, it was necessary to repair the visible effects of long-term under-investment. Who can forget schools and hospitals with buckets in the corner to catch the leaks, or grim city centre landscapes with crowds of homeless people sleeping rough?

Labour's increased spending also addressed workforce shortages in schools and the NHS, where more staff were needed to raise educational standards and care for an ageing population.

Rather than cutting such spending, the crisis could be an opportunity to build the infrastructure of a more energy-efficient, green economy. That would prepare us for the longer-term structural barriers to growth presented by climate change and the depletion of natural resources.


ECONOMIC MYTHS

MYTH: The UK has a big public sector compared to other countri
es

Public spending in the UK is lower as a proportion of the economy than in the likes of France, Italy, Austria and Belgium, as well as the Scandinavian countries (OECD World Factbook 2010).

And spending on core areas such as health and education remains comparable or low in relation to other OECD (broadly speaking, 'rich') countries.

For example, the UK spent just 8.4 per cent of its GDP on health in 2007, roughly half that spent in the United States (once the large private sector is taken into account) and well behind Germany, France and most other west European nations.

On education, the UK again spends less per pupil than most comparable OECD countries.

The UK is not profligate in public spending and does not have an oversized public sector compared to similar countries.

MYTH: Spending on the public sector is 'crowding out' private sector growth

It is argued that public spending comes at the expense of overall growth, because potential investment is being re-directed into taxation to fund an 'unproductive' public sector. But in fact investment in public infrastructure and services is essential to private sector productivity, and so is no less critical to future growth than private sector investment.

Furthermore, the UK is not a highly taxed economy. The OECD's comparative figures on taxation as a proportion of overall economic output show the UK way down the list, only just above the average.

It is sometimes suggested that taxes hit the private sector in such a way as to discourage job growth. Again, though, the data shows the UK to have very low levels of taxation per job: far lower than the OECD average.

The second way in which the public sector might be said to be crowding out private sector growth is by taking workers it needs, but this would only really be the case where the labour market was operating close to full employment.

With the unemployment rate at about 8 per cent, this is clearly not the case. and in many areas of public provision - from child protection, to education and training, to care for the elderly - there is a pressing need for more, not fewer, public service workers.

Finally, some argue that public investment 'crowds out' private investment, because government borrowing pushes up interest rates and inflation. But there is no evidence that this is currently a problem - real interest rates are low, and the economy is still operating well below its potential output, which means there is lots of room for non-inflationary public sector expansion.

In fact, in current circumstances, public spending is more likely to stimulate private sector investment by maintaining levels of demand and preventing a deeper collapse of economic activity.

MYTH: Public sector workers are overpaid

It is true that very recently average wages in the public sector have moved marginally above those in the private sector. This is mainly because privatisation has pushed many low-paid jobs out to the private sector.

The trend is not that public sector wages have risen sharply, but that private sector wages have fallen - a characteristic of the economic crisis. If we take a longer view, since the 1990s average public sector pay has not seen significantly more growth than the public sector.

And when private sector wages are split up to consider different sector and occupational patterns, a rather different picture emerges. Wage rates differ widely, with the average pulled down by very low wage sectors such as distribution, retail and hospitality.

What the data shows, therefore, is not that public sector workers are overpaid, but that some private sector workers are severely underpaid.

MYTH: The financial crisis was caused by a lack of money in circulation

This one is true to some extent, but it requires careful explanation. The system of finance capitalism pursued in the UK and US since the 1970s has continuously recycled economic surpluses away from the poor toward the rich. In both countries, the share of economic output taken up by wages (as opposed to profit) has fallen, and inequality has risen. The very affluent have got wealthier, at the expense of the rest of the population. In 2007/08 the richest tenth of the population had more than 30 per cent of total income ('Income Inequalities', poverty.org.uk).

In the post-war period, part of the role of the state was to redistribute economic surpluses to the wider population so that they could keep spending on goods and services. This was seen as so important precisely because large inequalities had been identified as one cause of the 1929 stock market crash and the subsequent depression.

For a while, the problem that rising inequality presented for growth was overcome by the use of credit and the super-exploitation of workers in the developing world, which allowed consumers to keep buying cheap products. This is one of the factors that fed the debt crisis.

So, yes, there is not enough money in circulation - but this is precisely because it has been captured by the super-rich.

MYTH: Cutting public spending will help us avoid economic disaster

A range of economists, from Larry Elliott of the Guardian to Nobel prize winning professors like Paul Krugman and Joseph Stiglitz, are warning that making cuts now raises the very real possibility of undermining the fragile economic recovery.

As every first year economics student knows, there are four main components of economic growth: (1) exports; (2) investment; (3) household spending; and (4) government spending.

Over the past two years, governments around the world have stepped in to bridge the gap in the first three by providing debt-financed public sector stimulus packages. There is precious little evidence that the private sector or households are ready or able to step up their activity to fill the gap, or that exports will increase in a world where our major trading partners are also reining in spending.

As such, any austerity programme may prematurely remove the foundations of the recovery and lead to a return to recession - a 'double dip'. This would be disastrous, not just for growth, but in turn for tax receipts and the capacity of the state to reduce the deficit and government debt.

How will that help to stabilise the world economy? How will it deal with the frequent, persistent and cumulative financial crises that are endemic to it, or overcome the pressing resource and environmental constraints that are so clear for all to see?

The economic crisis was a golden opportunity to move toward a more economically, socially and environmentally sustainable national and international economic system. For a while all countries were so concerned about the whole system that there was at least a chance to overcome narrow self-interest and look toward a more co-operative and sustainable future.

We are about to squander a once-in-a-generation opportunity for progressive change - unless, that is, we organise and campaign for an alternative.

MYTH: There is no alternative to cuts

The beginnings of an alternative have already been discussed. For example, Unison's alternative budget ('We can afford a fairer society', Unison Alternative Budget 2010) suggests that almost £4.7 billion could be raised each year from introducing a 50 per cent tax rate on incomes over £100,000.

About £5 billion could be raised every year from a tax on vacant housing; £25 billion a year could be raised by closing tax loopholes; and the IPPR think-tank has estimated that a 'Robin Hood tax' on financial transactions could raise another £20 billion a year (T Dolphin, Financial Sector Taxes, IPPR 2010).

All these taxation measures would be 'progressive' in the sense that they would divert wealth from the rich to the poor, in contrast to measures such as the government's VAT increase, which hits the poor hardest.

In addition, some of these ideas might have behavioural advantages: they could work against destabilising speculative financial flows, or lead to fewer empty houses.

Similarly, we could look at spending that really should be cut. For example, while estimates of the true costs of replacing the Trident nuclear weapon system vary widely, they tend always to come in above £80 billion over 25 years.

Getting rid of the cost of the war in Afghanistan, massive consultancy fees on private finance deals and contractors' profits in privatised public services would also make a difference.

We could also decide to manage the deficit and public spending in a long-term manner, targeting social issues such as inequality, under-investment in education and child poverty, and strongly regulating international financiers, banks, hedge funds and the like.

All of these are political choices.

We don't have to live in a world where unemployment co-exists with a long-hours culture in which workers are so stressed that mental health problems are on the rise.

We don't have to live in a world where bankers gamble millions across the world in elaborate financial casinos at the same time as 1.4 billion people live on less than $1.25 a day.

We don't have to live in a world where there is no limit to how much of our collective economic output goes to the rich, yet others do not have enough to eat.

It is worth remembering that after the last crisis of this scale and significance, and with public debt something like three and a half times the size it is today, we established the NHS, created the welfare state, put in place comprehensive education and built a vast number of public housing estates.

History tells us that there is more than one way out of an economic crisis.

I HAPPEN TO BELIEVE THIS A MOST FAIR SUMMARY OF THE UK ECONOMY..



Thanks to my friend Dr Alex Nunn of Leeds Metropolitan University

Public Net Debt
Fiscal Years 1979 to 2011
Year GDP
£ billion Public Net Debt -total
percent GDP


1979 199.22 43.61 a
1980 233.184 42.11 a
1981 256.279 44.40 a
1982 281.024 44.55 a
1983 307.207 43.13 a
1984 329.913 43.59 a
1985 361.758 43.45 a
1986 389.149 41.81 a
1987 428.665 39.14 a
1988 478.51 34.98 a
1989 525.274 29.30 a
1990 570.283 26.69 a
1991 598.664 25.27 a
1992 622.08 26.70 a
1993 654.196 30.97 a
1994 692.987 36.05 a
1995 733.266 39.55 a
1996 781.726 41.20 a
1997 830.094 41.9
2 a
1998 879.102 40.14 a
1999 928.73 37.86 a
2000 976.533 35.37 a
2001 1021.83 30.57 a
2002 1075.56 29.33 a
2003 1139.75 30.45 a
2004 1202.96 31.82 a
2005 1254.06 33.81 a
2006 1325.8 34.92 a
2007 1398.88 35.74 a
2008 1448.39 36.25 a
2009 1395.87 44.1
9 a
2010 1453.62 52.25 a
2011 1526.5 59.5
6 e
Legend:
a - actual outturn
e - estimate in HM Treasury 2011 budget


Support with HM Treasury's debt to GDP...FIGURES


What you may note is that all UK government have in fact ran a deficit. you will also note that the debt to GDP was not out of line with UK growth...in fact up till the world banking crash the Tory party made a great play of sticking to Brown's Tax spend policy..until the day after the economic world banking crash...then they started all the Myth's about how bad this was...while not pointing out the UK growth figures...clever move...The UK media like the rest of the worlds media blamed ALL THE GOVERNMENT in power at the time of the world banking crisis...One by one each of these Government lost office as a direct result of the need to blame something...while not once stopping to check what the true state of play was... lets just think about all of this for one minute...Do you really believe that everyone of the governments seeked to lose power? NO... they did not..so if you are now saying that Brown was running some utterly rogue economic policy that was so very different from all the other western government then you need to come up with some real economic data in support of this claim?.... not some newspaper link..but real hard government or world banking data. such as i have done here....

Now in my company that sells economic data from around the world.... yet i cannot show that Browns action where so out of line given his debt to GDP margins.....this can best be seen with the help of IMF,OECD world fact-book data of 2010.

Cameron and Gideon have been asked show government or world banking data too back up there claim...so far they have ducked over 200 question put to them to support this charge...no..answer has yet come back to suppot there claims...you may note they do not push this silly economic argument so much today...WHY...because they have very few hard fact to back this up.

maybe there time should be better spent dealing with all the national debt they are now hiding in 5 and 10 years government bonds and over £157 billion over spend on borrowing..... this is with out the £350 QE.... and the money that three UK banks have now borrowed from the ECB...

Now I have with my friend done our best to stay away from newspaper links or data..There are some..however, these are all easy to find...

NO LEFT WING OR RIGHT WING DATA WAS USED OR BLOGS...ALL KEY DATA IS WORLD BANK AND GOVERNMENT DATA.

IMF, DATA 2010
OECD WORLD FACTBOOK 2010
WORLD ECONOMIC OUTLOOK DATABASE 2010
HM OBR BUDGET 2011 DEBT TO GDP
all this website data is quite easy to find if you know what it is your looking for....

I never use Newspaper link data unless its government data..no matter if it back my argument or not..
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by trevorw2539 on Sat Mar 10, 2012 11:03 am

Stox16. Thanks for printing the above reams.(Myths).

Whilst I actually knew it all............ Drat, my nose is getting longer.Embarassed Laughing

Seriously. I've learnt a lot. On top of that we often get postings here that talk about one economic topic or another. Put together like the above we can see how one thing often inter-relates with another. Gave simple me a wider perspective. Thanks.
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Papaumau on Sat Mar 10, 2012 2:37 pm


Brilliant stuff Stox16 even it is a bit heavy !

That just goes to prove that government after government have been leading us up the proverbial garden path for many years.

I cannot understand why they don't have people like you helping to write budget policies as they seem to stick to all of the old and very worn paths of misinformation that they use to confuse us into blaming just about everybody but the ones that are really to blame.

Through all of this misinformation and sleight-of-hand it is the ordinary people on the ground that continue to suffer while the rich keep getting richer and the poor keep getting poorer.

Will it always be thus I wonder ?

Regards....

Papaumau.
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by oftenwrong on Sat Mar 10, 2012 5:10 pm

The fact is that few people interest themselves in the complex subject of Economics while times are good.

The current Universal preoccupation with the topic arose from the Credit Crunch of 2008. It might have faded by 2017 if previous similar crises are a guide.
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Stox 16 on Sun Mar 11, 2012 1:25 am

Papaumau wrote:
Brilliant stuff Stox16 even it is a bit heavy !

That just goes to prove that government after government have been leading us up the proverbial garden path for many years.

I cannot understand why they don't have people like you helping to write budget policies as they seem to stick to all of the old and very worn paths of misinformation that they use to confuse us into blaming just about everybody but the ones that are really to blame.

Through all of this misinformation and sleight-of-hand it is the ordinary people on the ground that continue to suffer while the rich keep getting richer and the poor keep getting poorer.

Will it always be thus I wonder ?

Regards....

Papaumau.


Hi Papa/Trevor
You are both most Welcome...you know its often said...That if your against this Government economic policy you are out of touch with realty. A very interesting statement in my view...as the true realty is what poor ordinary Greek working people face today...That is true economic realty..as what was their great crime? was it electing Government's that have let the down or was it the fact that Rich Greeks where just looking after themselves and not the country they are said to love and care for? I also read and see government data or private data that believes that Greece should now leave the EU. or that she could somehow do what Argentina did in the past...Yet Greece is not Argentina is it? so does it really matter if they are in the EU or out of it? No..its will make no difference to the Greek debt as it will still be there after all of this..

Economics is a interesting subject when its not being distorted by government with hidden agendas that are distorted to support a parties needs at home..Its a easy thing to blame all the Government in power at the time for a world banking mess. as most Governments are elected to office to run countries not private banks. plus private banks are not the bed rock of honesty themselves, not even with each other let alone governments of the day..Today we do face a real economic crisis that was given to us by some very greedy people. who put there own self interest first, you could even argue that this is what is expected of them by there shareholder. well if you wish to argue this point..then its quite fair that corporate banking shareholder should be held total responsible for the actions of there employees. as they help appoint them in the first place. not the governments of any country.

However, Government are Totally responsible for feeding people misleading economic policies or bad data. My biggest criticism of this UK government is that they tried to blame everyone else while making out that they could put all this right in just five years...it was totally nauseous and unrealistic to give people economic hope that is based on a distorted economic policy. as the very idea of austerity on its own without any sort of fiscal GDP growth policy is just economic madness at best. For two whole years now we have done nothing other than cut jobs and replaced a country that was working for a living too one with 2.8 million now sitting at home. while borrowing more and more to pay for service we need to kick start a economy and mass unemployment. with this being sold as an economic policy to the UK people...well if this was every going to work the we need not look at anything else other than Greece. as the Greeks have done all of this and more...all that has happened is Greek public sector workers who where paying the 40% Tax are out of work. while the super Rich Greeks who did not pay there Tax in the first place have either left Greece or are still in work and still not paying there Tax? while the private sector industry has almost crashed and with it Greek GDP..or what is left of it. So if Greek austerity is working so well...why is there no sign of any GDP growth? as the idea is that you cut costs and somewhere in the middle GDP meets the debt and growth...all this... while totally overlooking that as you cut jobs and industry fails so does your GDP growth while you debt and borrowing just goes on?

So the net result of the UK austerity policy turns into a national borrowing policy. At the very time tax revenues are declining and a debt crisis is ravaging the global economy, our politicians have chosen to go on an unprecedented spending splurge to fund not industry but to fun mass unemployment and the banking sector. So far the Government borrowed a monumental £170.8 billion last year. If all goes well, we're set to borrow another £167.9 billion this year.

This kind of deficit is far greater than during the recessions of the 80s and early 90s and even higher than when Britain went cap in hand to the IMF in 1976

Well Papa, you asked the question will this go on? YES..its sad but it will..yet somethings have change for ever. Today we are a one of these economic cross roads that come up once every 30 to 40 years. This economic cross roads comes down to us all..Its called a battle if economic change..While the Right Wing win this new battle of economic ideas like that did in the 1980s or with the Left wing win this new battle of economic ideas? The right wing know this is the new battle ground. but will look to limit any real economic change..The Left wing on the other hand are looking to change economic values, such as manufacturing and industry playing a great role. or will the Right wing view that finance and banking with a small manufacturing base win the day?

in on places like here or in the street that will see who wins this economic battle...if they vote Tory at the next election then the economic policy will be as I have stated. if the Labour party win..then we could see change in our economic values.. why will they change more then the right...well they had there fingers burn..this has you think its time to change..

Cheers my good friends
pleased you thought it was of value

STOX


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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Stox 16 on Sun Mar 11, 2012 1:29 am

oftenwrong wrote:The fact is that few people interest themselves in the complex subject of Economics while times are good.

The current Universal preoccupation with the topic arose from the Credit Crunch of 2008. It might have faded by 2017 if previous similar crises are a guide.

ow
That is quite true many few people are interested in a subject like economics...yet its like not looking after the car and house...you will in the end end up with a very big bill...
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Papaumau on Sun Mar 11, 2012 1:57 pm

God... that purple writing is sore on the eyes ! Twisted Evil


STOX.... I think that while all governments of any left or right direction will probably always follow the path of least resistance, and plain politicians - even if some of them come with degrees in finance - do not normally have the abilities to steer serious financial direction; this means that the watchdog that is supposed to do this should have the power and the ability to do it.

As many of us will already know, our friend Maggie Thatcher went across the pond during her heyday and conspired with Ronald Regan in order to get rid of many of the controls that government had over the excesses of the banks and financial institutions and what happened after that is now written in history.

Sadly, the New-Labour regime that came in after Thatcher's and Major's political demise did nothing to repair the damage that Maggie and Ronald had done and as a result we found that the FSA - that was supposed to get a grip on such excesses - was simply too weak to do anything.

As a result we now find ourselves in serious debt and - as you ably pointed out Stox - we are not getting out of that debt any time soon. In fact, as you also said, that "borrowing debt is getting bigger instead of smaller" and once again it is the weak, the poor, the sick and the old that are being made to suffer because of this recklessness and incompetence amongst the ones who should know better.

Regards....

Papaumau.
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by trevorw2539 on Sun Mar 11, 2012 2:55 pm

Quote Papaumau.

STOX.... I think that while all governments of any left or right direction will probably always follow the path of least resistance, and plain politicians - even if some of them come with degrees in finance - do not normally have the abilities to steer serious financial direction; this means that the watchdog that is supposed to do this should have the power and the ability to do it.

This is one of the troubles we have in government. There are few politicians who are 'career' politicians in the sense that they are skilled enough to immediately take over a cabinet position really knowing the 'subject/department' they are taking over. Being switched from one Ministry to another during a 'shuffle' surely isn't helpful. Would you ask the foreman of the production department to take over the typing pool (if there is such a thing today) the following day.

Of course we have to have 'shuffles' to deal with those who 'mess up', or those who 'err' in some way (Putting it politely).

I know they have aides to help them, but it doesn't seem to do much good, apart from blaming their aides for anything that goes wrong. How often do they decide something, only for Downing Street to deny it's Government policy.

The problem is finding people for Parliament who are sufficiently skilled in the 3D arts of Democracy, Diplomacy and Duplicity.Embarassed
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by oftenwrong on Sun Mar 11, 2012 6:09 pm

.... and on Sundays we're allowed to use crayons
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Papaumau on Mon Mar 12, 2012 1:22 pm


I really like that Trevor....."The 3D arts of Democracy, Diplomacy and Duplicity" How true ! Laughing

Mind you, I don't think that red for a font-color is any more readable than the purple is ! Shocked

Regards....

Papaumau.




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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Stox 16 on Fri Mar 16, 2012 1:58 am

Papaumau wrote:God... that purple writing is sore on the eyes ! Twisted Evil


STOX.... I think that while all governments of any left or right direction will probably always follow the path of least resistance, and plain politicians - even if some of them come with degrees in finance - do not normally have the abilities to steer serious financial direction; this means that the watchdog that is supposed to do this should have the power and the ability to do it.

As many of us will already know, our friend Maggie Thatcher went across the pond during her heyday and conspired with Ronald Regan in order to get rid of many of the controls that government had over the excesses of the banks and financial institutions and what happened after that is now written in history.

Sadly, the New-Labour regime that came in after Thatcher's and Major's political demise did nothing to repair the damage that Maggie and Ronald had done and as a result we found that the FSA - that was supposed to get a grip on such excesses - was simply too weak to do anything.

As a result we now find ourselves in serious debt and - as you ably pointed out Stox - we are not getting out of that debt any time soon. In fact, as you also said, that "borrowing debt is getting bigger instead of smaller" and once again it is the weak, the poor, the sick and the old that are being made to suffer because of this recklessness and incompetence amongst the ones who should know better.

Regards....

Papaumau.

Hello Papa
A very fair summary, I must say...Yet I even believe there is even a bigger problem that just who runs economic policy...as if this is not a big problem on its own papa....But my bigger problem is who we run our countries as a whole. The problem is that all Western Government are on a five year term...This in itself leads us to have short term economic policies to run a long side the political office terms. (yet heavens above that we should have 10 year governments.) as i would not wish that. but in other words we are set up for totally short team economic policy so the governing party can benefit from its own polices. The F.S.A was a failure papa..the damage to the F.S.A was done in committes stage. The then Tory party and the bankers spent billions of pounds watering its powers down. what was disapointing was the then Labour party let them talk us in to watering it down. a mistake in my view.

So many long term economic policy almost come about as some sort of left over policy. so we suffer from poor political economic management while having government set up on short team policies that need to bear fruit within a five year Government term. yet as you rightly point out papa. one of the very few long term economic policies was in fact the, I quote papa (Maggie Thatcher who across the pond during her heyday and conspired with Ronald Regan in order to get rid of many of the controls that government had over the excesses of the banks and financial institutions and what happened after that is now written in history. )

However, there was one very small news clip the other day. That said Gideon was looking a how we borrow and the time span. I E. we have short borrowing in 5 and 10 year bonds and then we have the 30 year bonds..Well for once... if he is looking at this for real, he is right to do so. in my view..as there is far to
much short term borrowing.

However, there are many lessons that have finally been learn't at a great cost to the poor and even the middle class here and in Greece. not that this helps us right now does it...its so clear to me that re-writing how our economies and how that work is now a must. we cannot live off cheap city borrowing in markets we do not fully understand form this side on the pond. That counties with small manufacturing bases like us on just 17% of our GDP must come to an end or Greece with even less must stop. as all the economies with higher manufacturing are riding out the economic storm better than we both are. that the service sector can only be seen as short term economic policies at best. That consumption of imports are leading us into more borrowing and do very little to add our own economies. I would also say its high time that economic policy was run with a central commitee with chancellor holding the chair. much as the way the bank of England is now set up. as we do need a long term economic plan and not short political fixes.
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Stox 16 on Fri Mar 16, 2012 2:05 am

trevorw2539 wrote:Quote Papaumau.

STOX.... I think that while all governments of any left or right direction will probably always follow the path of least resistance, and plain politicians - even if some of them come with degrees in finance - do not normally have the abilities to steer serious financial direction; this means that the watchdog that is supposed to do this should have the power and the ability to do it.

This is one of the troubles we have in government. There are few politicians who are 'career' politicians in the sense that they are skilled enough to immediately take over a cabinet position really knowing the 'subject/department' they are taking over. Being switched from one Ministry to another during a 'shuffle' surely isn't helpful. Would you ask the foreman of the production department to take over the typing pool (if there is such a thing today) the following day.

Of course we have to have 'shuffles' to deal with those who 'mess up', or those who 'err' in some way (Putting it politely).

I know they have aides to help them, but it doesn't seem to do much good, apart from blaming their aides for anything that goes wrong. How often do they decide something, only for Downing Street to deny it's Government policy.

The problem is finding people for Parliament who are sufficiently skilled in the 3D arts of Democracy, Diplomacy and Duplicity.Embarassed


Hello Trevor
yes you are right in saying that leaders will probably always follow the path of least resistance. But this also lays at the core of the problem. read what i posted to papa and then we will see where we are Trevor. I have noted your point and some are very good points as well
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by tlttf on Sat Jun 16, 2012 8:08 am

Having spent the last two weeks reading your posting stox, I was surprised to find I could find it all on line. Even more surprised to note you wasn't censored for not simply placing a link, by chance do you support the Labour Party?

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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by oftenwrong on Sat Jun 16, 2012 10:52 am

There's a saucer of cream for you under the sink, landy. Miaow.
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The recent happenings in Greece....

Post by Papaumau on Sat Jun 16, 2012 12:17 pm


A very interesting and informative thread guys n' gals !

The latest developments in Greece seem to clearly indicate that the people of Greece are finally rising up and protesting about how all of these austerity packages and their attached bailouts work.

As I see it, after two multi-billions Euro bailouts we are seeing Greece having to knuckle-under for a third round of austerity packages and a request by God-knows-who for a further 100-odd-billion Euro bailout package.

What seems to me to be the nasty side of these "bailout packages" is the fact that as each one comes along the interest rates charged on these packages gets higher and higher until the country receiving the package cannot possible be able to pay them back in the lifetimes of many of the people living in the country.

THAT....in my opinion, is the kind of debt that Greece should avoid at all costs as once in that trap they will never be free of that burden and the entities that pay these high-interest-rate bailout packages will have them over a barrel for the foreseeable future.

The leader of the extreme left-wing party, that is asking for election, is standing on the argument that the ordinary people of Greece have been blamed often enough and for long enough about the Greek debts that they did not create and that he feels that Greece does not need to go cap-in-hand to the IMF or the European Central Bank or suffer under any more painful austerity packages any more.

Of course his and his party's successful election will mean that if Greece - as a result of this election - does not accept the latest bailout and round of austerity cuts it is almost guaranteed that it is going to be booted out of the Eurozone and maybe even the European Union as well.

The question this raises is: Will this be a bad thing or a good thing as once Greece is insulated from all of the pressures that the EU puts it under it could be FREE to form it's own future once again ?

Regards

Papa....
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Ivan on Fri Jul 03, 2015 9:23 pm

No more messages in red, please; that's the colour used to show that a post has been moderated. Thank you.

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ATMs in Greece are now offering other services as they run out of cash.....  Shocked


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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by Ivan on Thu Jul 16, 2015 10:37 pm

Could these be the EU bailout conditions accepted by Greece?   scratch


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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by boatlady on Fri Jul 17, 2015 7:10 am

seriously, though --- this does begin to feel like the end of democracy - for now
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Re: Can austerity work in Greece? Does it have any lessons for us?

Post by oftenwrong on Fri Jul 17, 2015 12:39 pm

The end of democracy as they prefer it, perhaps. But it might represent progress even if it only persuades Greek businessmen to stop regarding the payment of taxes as a voluntary undertaking.
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Re: Can austerity work in Greece? Does it have any lessons for us?

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