Comments on: Why the Greek bailout won’t work A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: ggeorgan Thu, 06 May 2010 18:30:16 +0000 as far as I know Mr. Roubini is in no position to have any idea whatsoever about Greek politics. So how can he pass judgement on whether cuts in public spending are acceptable or not ?
He may turn out to be right and he may turn out to be wrong, but this would be a random event, nothing more.

By: inboulder Wed, 05 May 2010 17:53:27 +0000 “Anyone demanding that countries not run such big deficits is, in effect, calling for higher taxes and slashed spending in the face of a deep recession — Hoovernomics. Is that really what they want? Is that their final answer?”

The monday Krugman is an idiot. Continuing to overpay government workers and unions cannot possibly help Greece service its debt. The only other option to belt tightening is default.

By: Augustus Wed, 05 May 2010 07:31:16 +0000 Posted by johnhhaskell
Step 1: Denounce speculators;
Step 2: Bail out speculators.
Step 3: Declare victory.

When you refer to Speculators,
Do you intend it to mean Politicians who “Speculate” that they can borrow and dispense money to buy the votes of their subjects, while Speculating that they will be dead before the lenders or voters wise up to the impossible scheme?

Or could you be implicating the gullible believers of the gimlet eyed Politicians who handed over their hard earned and saved cash based upon the soverign promise to repay. That promise based upon their supposedly unlimited power to tax and extract cash from their happily retired and unproductive citizens of age 60 and above.

By: EW75 Wed, 05 May 2010 06:09:33 +0000 Why can’t Greece face reality and emulate what Dubai World is doing? Restructure your debt into more manageable and realistic chunks which will not stunt growth (needed to service debt) and less straining to the general Greek public.

This will also provide the Greek government time and opportunity to restructure the economy for a more sustainable future.

Obviously, bringing in the EU and IMF will surely shackle the Greek economy into a recession for at least a decade.

By: Moss_GR Tue, 04 May 2010 17:21:45 +0000 MattMC,

You’re correct excepting the part about Herbert Hoover. HH not only prolonged the economic downturn of 1929, he created the context for FDR to turn the downturn into a truly great depression without end, were it not for WWII. I refer you to programs such as the RFC. In fact, during the campaign of 1932, FDR ran on a “balanced budget” and accused HH of leading America down the road to socialism. I submit that had Calvin Coolidge run in 1928, he certainly would have been elected, and America would have avoided not only The Depression but the profligate spending of HH, FDR, and their successors.

As I stated above, the point is to resolve these crises permanently not relieve them till the next election. The PIIGS, the Brits, and we Americans can do so only by applying the approach that succeeds so well everywhere else to our own behaviors; namely, that of Science.

Gene Richard Moss

By: mattmc Tue, 04 May 2010 15:05:00 +0000 Felix, you and the Monday Krugman are wrong.

How long is the recession proposed to last? 2 years? So ramp in the cuts so most of the effects fall outside of the “recession” period. You still need the cuts so you can sell longer term debt.

Then you go on to quote Erlanger who says that Latvia and Ireland have already made spending cuts, without facing a great depression. It wasn’t Hoover who made the depressions great, whatever Krugman demagogues, it was all of the other plans that prevented a proper reset in values.

The Euro, in some ways, is a great thing for economics, because it shows the weakness of people of like Krugman, whose irresponsible solutions of inflating away debt don’t work in a currency union.

By: Moss_GR Tue, 04 May 2010 14:57:08 +0000 Greece: Politics or Science?

“To relieve the present exigency is always the object which principally interests those immediately concerned in the administration of public affairs. The future liberation of public revenue they leave to the care of posterity.”
– Adam Smith, The Wealth of Nations (1776)

So, it’s 2010 and another financial crisis. This time, Greece. Greek politicians blame everyone but the perpetrators … they themselves. European politicians claim the way to relieve the crisis of debt is debt itself.

How about an alternative to this political “solution”? One based upon Science.

[(-4) + (4)] = 0

Firstly, describe the 4 negatives comprising the issue.
Context: A currency without a country nor a system of enforcement.

Antecedent: Rising interest-rates for Greek bonds.

Behavior: Greece promises to behave.

Consequence: EU and IMF agree to loan Greece more money.

Now, state the 4 positive steps toward resolving the issue.
Specify the Problem: An excess of spending by Greece.

Target a Goal: To have Greece abide by its initial agreements.

Plan: Agree to a reduction of the Greek deficit beginning now with completion within 3 years with specific benchmarks every 6 months (not in the latest agreement). Via a private agency, Greece tries to post a series of performance-bonds representing each benchmark. No governmental or IMF money.

Consequence of failure? Default. Game over. If successful, each new bond is posted after Greece has retired the previous bond.

Consequence of failure to retire a bond? Default. Game over.

Consequence of failure to secure the next bond in the series? Default. Game over.

Measurement: Responsibility falls upon the bonding agency. Greece gives full access to all financial records. The bonding agency pays the auditor. Consequence of not giving full access at any time or not passing the audit? Default. Game over.

The point is to resolve the crisis permanently scientifically not relieve it till the next election politically.

Gene Richard Moss
Author, Inescapable Consequences (2009)

By: Kosta0101 Tue, 04 May 2010 14:39:30 +0000 The problem with Greece is Greece, well maybe not the only problem, but a major part of the problem. I’ve lived there, I have family there, I own property there, I pay taxes there, I am part of that society and I am comfortable pointing out some obvious truths. The society is inefficient, corrupt, and bereft of personal responsibility. In Felix’s post, he highlights the political problems with getting Greeks to accept the austerity (unlike the Irish and Latvians). Greeks are rejecting the policies not because they are unfair, but because they refuse to accept any responsibility in their present situation and wat other to pay for the solution.

We can debate whether this new course of action will work, or if it is optimal for Greece. But what is undeniable is that the Irish accepted responsibility for their situation, as did the Latvians. It is galling that the Greeks continue to insist that the problem is not theirs and that other in the EU should solve it.

It is especially galling because the Greeks are happy that the Irish have accepted austerity instead of coming to the Greeks for assistance. The Greeks are demanding exceptional treatment, and on this point, they’re wrong.

By: dyllman Tue, 04 May 2010 09:18:34 +0000 The problem for Greece is the euro currency. They don’t have their own currency to degrade with financial gimmicks as the U.S. does. They will have to abandoned the euro, but the Greeks may not have much faith in their government’s paper either; certainly nobody else well. There is simply no fix for every big screw-up. They should have been mindful of the mess they were making. They shouldn’t be surprised others don’t care about cleaning it up for them.

By: wiretap Tue, 04 May 2010 05:24:37 +0000 @Wismar

It is assumed that deflation means a decline in nominal GDP. Unless you are proposing a scenario in which deflation is not accompanied by recession, the doomsday debt trap will not be defused by export growth.