Topic: National Debt and Spending

[AndyZ]

We should be coming up soon on yet another vote to raise the national debt limit.

http://www.cbsnews.com/8301-503544_162-57400369-503544/national-debt-has-increased-more-under-obama-than-under-bush/

Article with a bunch of listings about what we're up against, although it doesn't seem to list GDP anywhere.  I heard the mention about estimations of $20 trillion by 2016 and wanted to see if there was any truth to it.

There's a lot of chat within the many different threads edging on this topic; let's have a thread dedicated to it.

[Vekseid]

Opening with a blatant political hack job much? Whose policies are driving the debt's rise?

And Treasury yields are near record lows.

http://www.bloomberg.com/news/2012-05-18/treasury-yield-is-3-basis-points-from-low-on-euro-crisis.html

We have an entire political party willing to wreck this country for it's own power. Will they do it yet again by performing brinksmanship on the debt itself, again? Any sane, honest, and historically aware person would call this political party by the same term we called other 'power at any cost' parties. Of course, they'll happily use this term for their opponents.

I'm pretty sure they believe it, too. Authoritarians tend to think that 'the enemy' thinks like they do.

We have another political party who counters the above by agreeing with them for the most part, and otherwise being generally impotent. Too many political cowards to actually state, out loud, what needs to be done.

As for the debt, it's just another tool for people's arguments. The treasury yield tells you what the movers and shakers of the world think about the US national debt. They're paying near-at-inflation rates for it, for fuck's sake.

Let me put that into perspective.

Many of the richest people and organizations in the world consider the US debt to be the best, safest investment in the world, anywhere.

Not gold.
Not any other nation's debt. Certainly not Europe's, right now.
Not any business.
Not any bank.

United States debt.

Eventually this austerity bullshit being promoted by liars, frauds, and the people who believe in them will pass.

But I feel there is going to be a lot of suffering between now and then.

[AndyZ]

Let me be clear, I'd like to talk about possible solutions to the problem, and discussing those solutions instead of simply talking about the problems.  Unless you feel that the problem is absolutely fine.  If you really feel that US Debt is the best place for your money to be, no solution is needed.

I quoted a CBS thread since CBS is pretty left of center; I can put one down from Fox or others if people desire a source from the right as well.  Being able to point out the numbers can be beneficial for these debates.

Eventually this austerity bullshit being promoted by liars, frauds, and the people who believe in them will pass.

To me, this seems to suggest that you feel that the spending levels are just fine where they are.  Is this correct?  If so, does it apply to other countries such as Greece, or just America?

[Vekseid]

No, spending levels on domestic projects should be increase. You might get away with reducing spending by providing universal health care at the cost of most of our military budget, which will free up a lot of liquidity for many Americans who are in a tight spot, and likewise address e.g. Chinese currency manipulation, and address the debt directly by taxing those who aren't spending it (quite literally, that is why the yield is so low). However, no matter what, federal revenues aren't going to be more than ~25% of GDP, and getting them to 25% is basically going to require that the nation for the most part believes in a cause. Only way to pay the debt down, in the long run, is to grow the economy, so policies need to be in place to actually grow it, rather than basically bleed the middle class dry as a number of the rich are now.

That said, there's a good 3-4 trillion dollars of cash up for grabs right now, that would be good for a major short-term, long-benefit project or two, like repairing our infrastructure and possibly tackling a major environmental issue or two. It's basically just rotting where it is right now.


Greece needs to leave the  Euro. I'm of the personal opinion that the Euro was a bad idea, and ignore Greece for a second - look at Spain and Italy. These two countries were models of fiscal responsibility, and now they're being told to suffer because they're not as productive as Germany.

But Italians and Spanish can't just up and move to Germany, even if the EU's laws say it is so. The reason the US functions with a single currency is that someone from Washington can move to Florida to find work, and expect to be able to speak the same language, participate in the same culture, etc. A Spaniard who doesn't speak German? Out of luck.

Ultimately, by tying everyone to the same currency, you are requiring that everyone be equally productive. Not on an individual scale. Not irrespective of industrial development. Don't have as many factories as Germany? Too bad. Not as many people? Too bad too.

Greece isn't the only country suffering from the Euro. The PIIGS aren't the only ones. It's nearly every single Eurozone nation except for Germany that is paying the price.

[Callie Del Noire]

What we need to do?

That is a tricky question. Well, let's see. Admit that the authoritarian leaders have lied and misled us for going on 3 decades of 'trickle down'. It's bullshit. It doesn't work. And deregulation and 'smaller government' isn't the panacea that they say it is. It empowered economic raping and pillaging from the 70s and on. Accept that there is 'downsizing' and 'right sizing'

Reform the tax code. Put the capital gains tax back in place and stop cutting taxes for the upper 1%. All it has done is create a disparity between the 'haves' and the rest of us. Then reform corporate tax codes. In the higher brackets, America has the HIGHEST corporate tax rates in the first world, yet many of the companies that hit that level pay little or NO taxes.

Reform corporate tax rates, bring them down to what other nations charge. Then close the loop holes. Stop rewarding the companies for hiding money overseas or outsouring. Encourage reinvestment in the country. Reinstate the R&D tax break we had in the early to mid 70s. Reinforce the tax write offs for education investment. If the companies are going to get out of paying taxes.. make them put it back in the country.. not in India, or elsewhere.

Reform special interest rules. Lobbyists for too long, and their backers, have been the men who have guided policies in the US. It's a career path in DC to work for an elected offical for a couple years, then get with one of the firms as an 'insider'. They have gone from 'advising' to outright writing the laws that regulate the industries they represent.

Not smart. Witness the CISPA/PIPA attrocities out there.

Reinvest in our education system. No more 'No Child Left Behind' relying on standardized testing. No more mauling teachers unions, accept that if you want a strong educated workforce, you have to have competent teachers. The phrase that makes me want to pop a lot of people in the mouth is the phrase 'those who can't ..teach.' It's utter bullshit. I was a trainer for my shop for years, not because I couldn't.. but because I understood and was able to separate the tech talk from the material that my airmen needed to learn. I was good at my job, and able to communicate. Those aren't typical skills. We should celebrate people who can communicate material competently, not denigrate them for wanting to be able to make a living do it.  (Looking at you Scott Walker)

Stop appointing people with definite self-interest into offices that they will use to help their cronies. Wall street bankers aren't the men you want running the Federal Reserve Bank system, you don't want big pharma reps/lawyers running the FDA.

We have problems with big business endangering the public for profit. They've gutted the FDA, sic it on organic industry like it was their lapdogs and have bought their way into making it perfectly all right to copyright lifeforms. We let Big Pharma run over the medical industry and profit over suffering. Why must AIDS/HIV sufferers in the US must pay $25,000/year for drugs that are generically available elsewhere for much much less?

Don't get me wrong.. Profit is good. It's the mechanism that has gotten us this far. Without profit, industry and innovation would have stalled. There is a different between a sensible profit and squeezing every dime you can for your personal accounts. Gordon Gecko was a character in a movie, not an exemplar of what we should see in our executives. We need to start taking the longer view again, the Chinese are.

We have let a particularly noxious breed of business man set precedent for too long. We take healthy companies and see nothing wrong in pillaging them for their assets since it is easy to play the market to seize control and sell them off. That isnt' healthy.

Not everyone is going to be able to wear a suit and tie. Vocational training isn't a bad thing. If I hadn't been stupid as a kid in high school, I'd have taken up my great-uncle on his offer and worked for him in refrigeration. His company serviced two grocery store chains over three states and when he retired it was worth 5 million or more. If I had joined in, I might have been able to take over as he did from my great-grandfather who started it. I know friends who made their fortunes..and god did they make money.. by being plumbers, electricians and such. 'Higher Education' doesn't need to be college. We need to stop sneering at 'Blue Collar' as a phrase.

Lastly, we need to stop letting fear rule us. We've let both parties use the specter of 9/11 as justification for this that or the other. The authoritarian leadership of the GOP and their counter parts in the Democratic party have both gotten increasing divisive and partisan. It is the capital sin of either party to break with party dogma and doctrine and think that your constituents matter more than the party line.
Add in atrocities like Citizen's United and we're losing what little influence individual voters have.

[Callie Del Noire]

Note, some of the books I use to shape my outlook: Conservative isn't a bad word of itself, check out Barry Goldwater's Conscience of a Conservative and John Dean's Conservatives with a Conscience. Not everything Goldwater put in his book is something I agree with. His point of view on Civil rights wouldn't have worked, though it had some points to it. Likewise his commentary on communism, but in both cases I had the advantage of seeing what came down the road 50 years later.

A LOT of my issues with the more 'mainstream conservatives' of the GOP today is their Authoritarian outlook and insistence of the primacy of moral conservatism.

[OldSchoolGamer]

I would say the best way to ensure draconian spending cuts are not enacted is to elect a Republican POTUS.

Attempting to balance the federal budget the way Boehner is speaking of is economic suicide.  You'd be talking an almost immediate drop in GDP of at least 5%, with the loss of several more percentage points over the next couple years from knock-off effects.   For the POTUS to support Tea Party fiscal policy is a sure route to a one-term Presidency, and handing the White House and quite probably Congress to the other party.

But bear in mind that neither the POTUS nor Congress are the ones who decide these things.  They are front men and puppets for the Forbes 400--the actual rulers of America.  And the Forbes 400 are not going to support radical austerity.  It would be bad for their bottom lines, not to mention creating a sociopolitical climate hostile to them.

[Callie Del Noire]

You know if we got a GOP president (Romney) and more Tea Party types in congress to ensure a majority, we would have things like CISPA/PIPA muscled thru and we would be back in Afganistan 'building a future'. Tax cuts for the rich would continue and we would see more cuts in areas like OSHA, the Departments of Energy, Education, the EPA and FDA. Downsizing would be pushed through no matter the cost but whatever we downsized would be opened for privatizing when and where possible.

We, the average consumer, would take it in the shorts while our debt increased to a reduction in taxes from the rich and corporations while our protections would continue to diminish. Yet, I am willing to bet corporate protection would increase many times over.

[OldSchoolGamer]

You know if we got a GOP president (Romney) and more Tea Party types in congress to ensure a majority, we would have things like CISPA/PIPA muscled thru and we would be back in Afganistan 'building a future'. Tax cuts for the rich would continue and we would see more cuts in areas like OSHA, the Departments of Energy, Education, the EPA and FDA. Downsizing would be pushed through no matter the cost but whatever we downsized would be opened for privatizing when and where possible.

We, the average consumer, would take it in the shorts while our debt increased to a reduction in taxes from the rich and corporations while our protections would continue to diminish. Yet, I am willing to bet corporate protection would increase many times over.

We're going to get that regardless of which party is in power.  Both are corporate whores.

Only collapse is going to remove America's nose from the corporate rectum and get actual change going.

[Callie Del Noire]

We're going to get that regardless of which party is in power.  Both are corporate whores.

Only collapse is going to remove America's nose from the corporate rectum and get actual change going.

True.. but with the GOP all in power..we'd also get all sorts of fun like entire departments of government downsized/shut down. I'm going to bet that within a five years someone in the GOP will announce that we can 'save' the post office by privatizing it. Bets? I mean in a serious way, not the idle talk that it is now. Also willing to bet that more and more of the DoD assets will be privatized if the tea pot types have there way.

I imagine under Romney and a GOP dominated Congress we'll see a lot of things get cut/privatized. My student loans will go away, as in I won't have access to them or they will be privatized more and I'll be in debt even more to get my education.

The different is the Dems aren't AS bought and sold.. they want to supplement the corporate types with government support/payola whereas the ones buying the GOP want to buy out the government and eliminate any and all regulatory authority they can.

[OldSchoolGamer]

True.. but with the GOP all in power..we'd also get all sorts of fun like entire departments of government downsized/shut down. I'm going to bet that within a five years someone in the GOP will announce that we can 'save' the post office by privatizing it. Bets? I mean in a serious way, not the idle talk that it is now. Also willing to bet that more and more of the DoD assets will be privatized if the tea pot types have there way.

I imagine under Romney and a GOP dominated Congress we'll see a lot of things get cut/privatized. My student loans will go away, as in I won't have access to them or they will be privatized more and I'll be in debt even more to get my education.

The different is the Dems aren't AS bought and sold.. they want to supplement the corporate types with government support/payola whereas the ones buying the GOP want to buy out the government and eliminate any and all regulatory authority they can.

Regardless of which party comes out, we're headed for collapse.  Our energy resources are going into depletion, and even if we had another three decades' worth of cheap oil to pull out of someone's ass, no nation has gone as far down the debt-to-fund-empire road as America has without going through collapse.  The USSR had its turn.  We're next.  We're already far enough in debt to take us down, given that economic growth as we know it has come to an end.

Of course, it doesn't have to be this way.  We could wind down the American Empire in an orderly manner.  We could take some of the money we keep borrowing and invest in a new Manhattan Project to harness thermonuclear fusion for cheap, virtually unlimited energy.

I think Callie made some excellent suggestions too--I don't agree with all of them out to the thirteenth decimal place but as a whole the concepts Callie laid out are sound.  Tell the rich they're going to need to pay more.  End the war on drugs--especially cannabis.  Tax it and regulate it.  End free trade.  Make it harder for companies to sell things here that aren't MADE here.

But in reality, none of this is going to happen.  America has its collective nose surgically attached to the anus of Big Business.  Utterly convinced that anything that prevents the rich from getting richer is horrid socialism or communism.  Most of the lumpenproles out there will sit and wait forever (or at least as long as the food and toilet paper holds out) for the Forbes 400 to push some scraps off their table to them.

So I say "fuck 'em."  Let the collapse come.  Darwin in action.  If people are too fucking stupid to look after their own self-interest and see they're getting screwed, it's not my fault.

[Kirce]

Greece needs to leave the  Euro. I'm of the personal opinion that the Euro was a bad idea, and ignore Greece for a second - look at Spain and Italy. These two countries were models of fiscal responsibility, and now they're being told to suffer because they're not as productive as Germany.

It's legally impossible to leave the euro and it's the worst possible solution for Greece and I'm not even saying what would that cause to other countries, like the UK which would go into recession for two years in this scenario. The only thing that Greece needs to do is make the elections as quickly as possible and get a strong goverment, like Spain.

But Italians and Spanish can't just up and move to Germany, even if the EU's laws say it is so. The reason the US functions with a single currency is that someone from Washington can move to Florida to find work, and expect to be able to speak the same language, participate in the same culture, etc. A Spaniard who doesn't speak German? Out of luck.

This is completely false. Spaniards have a long story of working in other countries, especially in Germany and France, are they/we are very valued. Furthermore it's now very common to move to Germany and find job in a few months, less if you went in one of the recent work plans, companies in Germany offer German classes to learn the basics of the language although usually english is more than fine to start off. More than half of my classmates are all over Europe and they don't know a bazillion of languages, so yes, they can freely move and work to any other countries within the European Union.

Ultimately, by tying everyone to the same currency, you are requiring that everyone be equally productive. Not on an individual scale. Not irrespective of industrial development. Don't have as many factories as Germany? Too bad. Not as many people? Too bad too.

It's not about people or factories, if that was true then I guess that the northern countries are doomed due to their low population, and they're more than obviously not doing bad at all.

Greece isn't the only country suffering from the Euro. The PIIGS aren't the only ones. It's nearly every single Eurozone nation except for Germany that is paying the price.

Germany is doing its job, like Spain and I hope that the rest of the EU will soon do the same thing, and in particular the constitution modification that those two countries have already done.

[OldSchoolGamer]

It's legally impossible to leave the euro and it's the worst possible solution for Greece and I'm not even saying what would that cause to other countries, like the UK which would go into recession for two years in this scenario. The only thing that Greece needs to do is make the elections as quickly as possible and get a strong government, like Spain.

Reality trumps the law.  Sorry, but it's only the truth.  The people of Greece have made clear they are not going to accept years and years of recession alternating with depression so the bankers' balance-sheets balance.  And they're right.  The debt situation is out of control.  Austerity simply means economic contraction, which means lower tax receipts, which in turn means more deficits, which in turn means more austerity, which contracts the economy further, which lowers tax receipts, and so on.  The Greeks went along with it for a time, but now they're saying they don't want their economy ratcheted down into the Third World to pay debts.  So what now?

What needs to happen is Greece needs to default.  The bankers need to take their losses from the bad bets they've placed.  The man with the croupier stick needs to rake their chips off the table rather than everyone pretending nothing has happened.  There is life after sovereign default.  Greece can then re-introduce the drachma, and reboot its economy.  Yes, there will be pain, but I think you'll get a lot more buy-in from the Greek people for austerity if it is self-imposed and not done to pay debts to non-Greeks.

[Kirce]

Reality trumps the law.  Sorry, but it's only the truth.  The people of Greece have made clear they are not going to accept years and years of recession alternating with depression so the bankers' balance-sheets balance.  And they're right.  The debt situation is out of control.  Austerity simply means economic contraction, which means lower tax receipts, which in turn means more deficits, which in turn means more austerity, which contracts the economy further, which lowers tax receipts, and so on.  The Greeks went along with it for a time, but now they're saying they don't want their economy ratcheted down into the Third World to pay debts.  So what now?

What needs to happen is Greece needs to default.  The bankers need to take their losses from the bad bets they've placed.  The man with the croupier stick needs to rake their chips off the table rather than everyone pretending nothing has happened.  There is life after sovereign default.  Greece can then re-introduce the drachma, and reboot its economy.  Yes, there will be pain, but I think you'll get a lot more buy-in from the Greek people for austerity if it is self-imposed and not done to pay debts to non-Greeks.

That's ok, theoretically they could ignore laws. But then what happens if Greece does so and goes back to the Dracma?

~ Going back to the dracma, their old coin, would cause an extreme devaluation as soon as it was done. Furthermore, the euro being their neighbour coin would weaken Greece's finance to the maximun level.

~ Building Greece's economy with a completely devalued coin in contrast with Greece's neighbours would practically be impossible. Greece built itself towards a global economy so it would have to go back to what it had been doing for many years now. In short, they'd have to go back a decade and reconfigure their financial system from scratch.

~ Dracma's trust would be very little or null. There would be banking-panic and the coin wouldn't have any level of reliability on an European level, much less worldwide.

~ Some economists talk about a total collapse in the Greek monetary system, and what's worse, without exterior help they wouldn't have much, if any, possibilities of fixing the situation.

~ If the Greek collapse happens, if their authorities decide to go back to the European group of 27, there would be quite some difficulties in being accepted again. There are quite some requirements for being accepted in the eurozone and they would have to evaluate if Greece is able to meet them.

~ The total isolation of Greece could also cause strong social issues, with already several violent incidents in the country. Some voices even speak about the possibility of a coup d'etat.

[Callie Del Noire]

Regardless of which party comes out, we're headed for collapse.  Our energy resources are going into depletion, and even if we had another three decades' worth of cheap oil to pull out of someone's ass, no nation has gone as far down the debt-to-fund-empire road as America has without going through collapse.  The USSR had its turn.  We're next.  We're already far enough in debt to take us down, given that economic growth as we know it has come to an end.

Of course, it doesn't have to be this way.  We could wind down the American Empire in an orderly manner.  We could take some of the money we keep borrowing and invest in a new Manhattan Project to harness thermonuclear fusion for cheap, virtually unlimited energy.

I think Callie made some excellent suggestions too--I don't agree with all of them out to the thirteenth decimal place but as a whole the concepts Callie laid out are sound.  Tell the rich they're going to need to pay more.  End the war on drugs--especially cannabis.  Tax it and regulate it.  End free trade.  Make it harder for companies to sell things here that aren't MADE here.

But in reality, none of this is going to happen.  America has its collective nose surgically attached to the anus of Big Business.  Utterly convinced that anything that prevents the rich from getting richer is horrid socialism or communism.  Most of the lumpenproles out there will sit and wait forever (or at least as long as the food and toilet paper holds out) for the Forbes 400 to push some scraps off their table to them.

So I say "fuck 'em."  Let the collapse come.  Darwin in action.  If people are too fucking stupid to look after their own self-interest and see they're getting screwed, it's not my fault.

Right off the bat, we need to reinvest in the country. The government needs to accept that privatization isn't' a cure all. I think something like 1 in 8 municipal bridges are out of safety standards.. our roads are decaying faster than we can upgrade them. The internet was invented HERE. Why are we not even in the top ten nations for bandwidth? Because the businesses that said they'd 'take care of the backbone' are instead sitting there like fat ticks squeezing us for every byte of bandwidth they can get away with.

Public Work projects aren't a bad word. We need to rebuild our nation.

I agree with you in some areas OldSchool, but not in all areas. I disagree with our shrinking energy issue, to a degree. You know where for decades where most of our domestic product went? To Europe and overseas. It was more profitable to sell US oil to areas of the world close to us and export from places like OPEC nations. Even in the midst of the fuel crunch in 08 we were sending a LOT of domestic product to Europe.. why not? To the companies it was profitable. Where would you sell your oil? In a country where gas was 3 dollars a gallon or a country where it was 3 euros a liter?

Right off the bat? We, the US, Canada and Mexico, need to reevaultate NAFTA. It's not been healthy for any of the countries it was to help, only the corporations who pushed it through. I have seen claims of 'resource bleed' from Canada, we've all seen the demise of jobs in the US and the exploitation of the Mexican labor market. No one benefited beyond the companies. That wasn't the intent of NAFTA.

We need to cut corporate participation in elections. Citizens' United needs to be overturned. We need to make it simply individual sponsorship in elections. NO SPECIAL INTERESTS. Clear the board. Unions, Special Interests, PACs, SUPERPacs..the goddamn Boyscouts, all of them cut from giving money to parties and running ads. You can't pay and advise. It's led us down a road where we are now.

You have elected officials who say they are for the people, then repeated bone us for the fortunate few with the cash to ensure they can be heard. You know the only reason I have gotten a reply about my questions on certain policies that Congressman Anders and Senator Rubio did this year? I played the disabled vet card. I got a reply then. Before then it was.. NOTHING.

We've let special interests hijack the process, it's time to take it back.

To me.. in the end, the start of fixing ANY of our problems is putting the representation of the citizens back in the process. Right now? We aren't represented. We are irrelevant in many areas and with something like 50 people putting 80%+ of the funding into the election so far this year..we'll stay unlistened to. Beyond polling for the lowest common denominator to see what issues would ensure they get the votes they need to get elected.

Right now, did you know it looks like there are maybe NINE states that aren't totally sewn up and those will be the battlegrounds for the next election. The rest of them? To some extent or another they are irrelevant as they are ALREADY considered 'in the bag' by one side or the other.

[Vekseid]

It's legally impossible to leave the euro and it's the worst possible solution for Greece and I'm not even saying what would that cause to other countries, like the UK which would go into recession for two years in this scenario. The only thing that Greece needs to do is make the elections as quickly as possible and get a strong goverment, like Spain.

'Legally impossible?'

And what, exactly, is a strong government going to do? Starve their population even more? "Let them eat cake?"

A party for strong government is certainly getting attention in Greece, right now. The sort of strong party that rises when people are desperate. The sort of lesson that, of all continents, you would think Europe would remember the dearest.

This is completely false.

It is completely true.

If it wasn't true, those five and a half million Spaniards would be living and working in Germany now.

Spaniards have a long story of working in other countries, especially in Germany and France, are they/we are very valued. Furthermore it's now very common to move to Germany and find job in a few months, less if you went in one of the recent work plans, companies in Germany offer German classes to learn the basics of the language although usually english is more than fine to start off. More than half of my classmates are all over Europe and they don't know a bazillion of languages, so yes, they can freely move and work to any other countries within the European Union.

It's 'common'. But not common enough to save Spain, or its people. I mean, in the US, not only are people able to relocate fairly easily, but so is the money. Two senators in every state means it's hard to ignore any state.

It's not about people or factories, if that was true then I guess that the northern countries are doomed due to their low population, and they're more than obviously not doing bad at all.

Finland is underperforming. Sweden and Norway - two model European economies - are both on their own currency. Iceland told the banks to get bent, and promptly recovered - again, under its own currency, though it's moving to the Canadian dollar - and I suspect that, should the Euro collapse, countries will not leave by first moving to their own currency in many cases. You can go to A&A, here, on Elliquiy, and get a sense of the Dutch job market.

Germany is doing its job, like Spain and I hope that the rest of the EU will soon do the same thing, and in particular the constitution modification that those two countries have already done.

What, Spain adopted a balanced budget amendment now?

That's ok, theoretically they could ignore laws. But then what happens if Greece does so and goes back to the Dracma?

~ Going back to the dracma, their old coin, would cause an extreme devaluation as soon as it was done. Furthermore, the euro being their neighbour coin would weaken Greece's finance to the maximun level.

There are two points for Greece for using its own currency
1) To be able to devalue its own currency, and
2) To actually have some degree of finance, as right now they have none.

~ Building Greece's economy with a completely devalued coin in contrast with Greece's neighbours would practically be impossible. Greece built itself towards a global economy so it would have to go back to what it had been doing for many years now. In short, they'd have to go back a decade and reconfigure their financial system from scratch.

Just how Japan couldn't possibly compete with the US in any field with devaluation as its primary strategy, and which is what China is doing right now. Your conclusion does not follow from the premise - Asia is pretty much a repeat object lesson of why you are wrong, here, because they do -exactly- that to get ahead.

~ Dracma's trust would be very little or null. There would be banking-panic and the coin wouldn't have any level of reliability on an European level, much less worldwide.

I'd trust it more than the Euro's future, for one.

In particular, bankers will have some faith that Greece will be able to pay back its debts on its own currency. Right now, the only way Greece's debts are going to get paid is if someone else pays them.

~ Some economists talk about a total collapse in the Greek monetary system, and what's worse, without exterior help they wouldn't have much, if any, possibilities of fixing the situation.

And how many predictions have these 'some economists' successfully made, where economists saying otherwise predicted something else?

But it's rather silly to claim that they would need outside help after moving back to the Drachma. The whole idea is that, in control of their own currency, they don't need to borrow money to pay for e.g. their own public works, whereas right now, that is -exactly- their problem - they are screwed without external help.

~ If the Greek collapse happens, if their authorities decide to go back to the European group of 27, there would be quite some difficulties in being accepted again. There are quite some requirements for being accepted in the eurozone and they would have to evaluate if Greece is able to meet them.

I'd like to think that, once Greece leaves the abomination, the rest of the Eurozone will learn its lesson and do likewise.

~ The total isolation of Greece could also cause strong social issues, with already several violent incidents in the country. Some voices even speak about the possibility of a coup d'etat.

Making people eternally indebted to others is one way to drive them to desperation, and desperation is how democracies become dictatorships.

[Kirce]

Yes, a member state’s exit from European monetary union, without a parallel withdrawal from the EU would be legally impossible, still, while voluntary withdrawal is legally not possible, expulsion is conceivable.

By strong government I meant one with a majority or at least a solid pact between parties, so that it's stable and can apply its measures without more delays.

It's still false by the way and also a bit unfair. Germany can't absorb such a massive amount of unemployed people, no country can, much less in a immediate time period. Spain's high unemployment rate is not related to the debt global crisis, in fact Spain's debt is lower than Germany or France. Also a life changing move can't be done in many cases due to other responsibilities. Regardless, unemployment rate in Spain is expected to go down in the coming years but it takes time.

Iceland is not in the EU, it's a pending candidate. It also has a population of 300.000 habitants which it's less than the city I live in. Those losses are not a big hit to other countries, much unlike Greece's possible losses if it left the euro.

Spain has taken more measures in this 4 months and a half than in the past eight years, I don't see it doomed at all, it is in fact making its job to move the euro forward.

Yes, Spain modified its Constitution to limit the public deficit in August 2011. It had 316 yes votes and only 5 against it.

We're talking about a 60% devaluation and that's only as soon as they take their new coin, further devaluation is very likely to happen. Inflation would also go sky high, specially in the long term, much like Argentina which is now between 25-30%, the unofficial one that's it.

I think that comparing Japan and China to Greece is very unfair, don't you think?

Without outside help they would have no investors, the interests would simply be way too high and no country no matter how big or small can survive in a global economy while being isolated, much less grow or fix such an economical meltdown.

I don't think that the eurozone is an abomination, but then again I don't think that the USA is one either, please refrain from using those adjectives to keep this civil and respectful.

Greece supposedly falsified its economic statistics in order to gain EMU entry. I think that it's unfair to blame the EU for its troubles when it's actually them the ones that are trying to save Greece.

[AndyZ]

Well, I was hoping for an actual discussion, but people are too interested in pointing fingers and whining than actually discussing possible changes, so I'm out.  Please PM if you're interested in having actual constructive conversations.

[rick957]

We have an entire political party willing to wreck this country for it's own power. Will they do it yet again by performing brinksmanship on the debt itself, again? Any sane, honest, and historically aware person would call this political party by the same term we called other 'power at any cost' parties. Of course, they'll happily use this term for their opponents.

I'm pretty sure they believe it, too. Authoritarians tend to think that 'the enemy' thinks like they do.

We have another political party who counters the above by agreeing with them for the most part, and otherwise being generally impotent. Too many political cowards to actually state, out loud, what needs to be done.

Okay, so; Republicans basically suck, Democrats suck almost as hard.  Gotcha.  :)

I am neither a Democrat or Republican, so I can't really take personal offense over such harsh comments, but I do wonder, what is the point of making such comments around here?  Why is this kind of harsh criticism so often directed at those particular targets on these message boards?  And it's not always just Vekseid or any other particular person who says stuff like this -- I don't mean this as some personal attack on any individual.  Rather, it seems to me that there's an atmosphere in which these kinds of comments seem to be welcome and encouraged.  At least it looks that way to me, from what little I've seen; I could be wrong.

It seems obvious to me that both the tone and the content of those comments make it extremely unlikely that any dedicated Republican or Democrat could read them without taking offense or at least feeling personally attacked and denounced.  Is that the point of making the comments?  Who does that benefit?  Any Republicans or Democrats in that position are most likely to just feel upset and stop reading.  That's what I would think, at least.

If the comments aren't logically being made for the benefit of any Republicans or Democrats reading along, then I suppose they're being directed at all the dedicated non-Republicans and non-Democrats.  Okay, there's a lot of those around here; I'm one myself.  But, if you're already strongly opposed to both those parties, you probably felt this way already, right?  Why would you need to hear these points again?

I guess all that I'm trying to say is that these kinds of comments are not likely to help convince anyone that they should change their mind or even reconsider their perspective about anything; this will only upset a few people, and reinforce the previously-held opinions of a few others.  Neither of those results is really the purpose of having debate or discussion about contentious political topics.  If there's any point to having such discussion at all, it's to try to explain our views to each other in a way that might actually persuade those who disagree with us to change their minds, or at least think harder about their own views.  Remarks like the ones above do not help achieve those goals, and in fact, in my opinion at least, it makes it much less likely that any helpful discussion can take place around here, as long as these kinds of comments are so prevalent and go unchallenged.

My apologies if I said anything there that pissed you off, Vekseid, or pissed off anybody else.  I obviously care enough about these issues to want to say something, but I don't intend to attack anyone or look down on anyone here, especially including Vekseid and any who sympathize with his remarks.

Alright, having skimmed more of this thread, I see that there has been some very detailed and nuanced discussion of the relevant issues here, from people who seem to know what they're talking about, and who aren't just out to attack each other.  That's wonderful; that's what this section ought to be about, right?  Those are the kinds of comments we can maybe all learn something from.

I just wish there was more of that and less of the nastiness.  I'm glad AndyZ (the OP) posted a little while ago and expressed his frustration with the lack of constructive dialog in this thread, because that's what I'm trying to point out as well.  I do see many constructive comments above, from Vekseid himself and others, but I also see other comments that poison the whole atmosphere and make it very difficult for helpful discussions to take place.  IMO, YMMV.

[Serephino]

As usual, Callie has made some very good points.  Special interest groups need to be kicked out on their asses, and those in office need to be smacked upside the head, ordered to stop the pissing contest, and be reminded that they are supposed to represent us all, and not just those that can give them lots of money.  That's pretty much it in a nutshell. 

It's a big mess.  Neither party is willing to do what needs to be done.  From what I can tell, President Obama is actually trying, but the GOP and their making him a one-term president kick is making it impossible to get anything done.  Republicans have the majority, and bad things tend to happen to Republicans who don't tow the party line.  The way they're turning on each other in political ads makes me sick.  They are seriously fighting over who is more conservative...

If I had to guess, I'd say the reason the jabs are being made because people are frustrated and angry.  My problem is with the morons in office and positions of power.  I lean more toward the Democratic side, but I think Callie, a conservative, has made some very good points in this and other conversations.  It's just this party loyalty bullshit that's screwing everything up.  It really has become Republicans vs. Democrats and they're fighting for control.  George Washington warned that nothing good could come of a 2 party system.  Such a shame nobody listened to him.   

 

[Callie Del Noire]

As usual, Callie has made some very good points.  Special interest groups need to be kicked out on their asses, and those in office need to be smacked upside the head, ordered to stop the pissing contest, and be reminded that they are supposed to represent us all, and not just those that can give them lots of money.  That's pretty much it in a nutshell. 

It's a big mess.  Neither party is willing to do what needs to be done.  From what I can tell, President Obama is actually trying, but the GOP and their making him a one-term president kick is making it impossible to get anything done.  Republicans have the majority, and bad things tend to happen to Republicans who don't tow the party line.  The way they're turning on each other in political ads makes me sick.  They are seriously fighting over who is more conservative...

If I had to guess, I'd say the reason the jabs are being made because people are frustrated and angry.  My problem is with the morons in office and positions of power.  I lean more toward the Democratic side, but I think Callie, a conservative, has made some very good points in this and other conversations.  It's just this party loyalty bullshit that's screwing everything up.  It really has become Republicans vs. Democrats and they're fighting for control.  George Washington warned that nothing good could come of a 2 party system.  Such a shame nobody listened to him.   

I have been reading a lot of John Dean and Barry Goldwater of late. There are several points that both of them make. It's not the conservative movement that is the problem, it's the authoritative leadership of the GOP who have subverted it and re-conned a lot of history to make themselves look good. In fact it was one of the ret-con attempts that got Dean out of his business outlook after Watergate.  (He was legal counsel for the President at the time).

If you look at it.. Modern Conservatism is very recent.. it grow out of opposition to the New Deal.. which I'm split on.. building infrastructure is good and some of the other things that came out of it isn't. Liberal/Progressive thought is much older, and in fact it could be argued that a LOT of the intent behind the Constitution and Bill of Rights came out of Progressive thought and philosphy.

I'm not so much conservative (by current terms) as more 'fiscally' minded. I see too many loop holes being put in. When a company makes BILLIONS in profits but earns a tax credit for hiding most of their cash overseas.. it's not fair or right. Particularly when at the same time they destroy something like 2,000 US jobs a year.

That is why I'm not happy with Mitt Romney.. he's made cash off of that process and is still doing so. I have see the democratic segment covering his 'Steel' mill closing left out one important fact.. He'd left leading Bain by then. He practiced those actions. He profited from it. But in the case of the 'Steel' ad, he wasn't directly involved.

He doesn't see anything wrong about the rape, pillage and burn business model though. That tells me enough.

The problem I have with the GOP is they (the Authoritarian leaders) have sold their souls to the culturally and moral conservative fringe. And see nothing wrong in leading them around by a leash to ensure they get to carry on business as usual.

[Vekseid]

Okay, so; Republicans basically suck, Democrats suck almost as hard.  Gotcha.  :)

I am neither a Democrat or Republican, so I can't really take personal offense over such harsh comments, but I do wonder, what is the point of making such comments around here?  Why is this kind of harsh criticism so often directed at those particular targets on these message boards?  And it's not always just Vekseid or any other particular person who says stuff like this -- I don't mean this as some personal attack on any individual.  Rather, it seems to me that there's an atmosphere in which these kinds of comments seem to be welcome and encouraged.  At least it looks that way to me, from what little I've seen; I could be wrong.

I haven't met a committed Democrat who thinks that the philosophy of capitulation by Democratic leadership is a good thing.

But at the heart of the issue is this: Last August, the Republican party openly threatened the good standing of the United States federal debt, and it's not possible to extricate that bit of treachery from debate on this 'issue'. It is one of America's most valuable assets, and an important refuge as Europe insists on screwing itself over, and we pay a price in terms of higher interest rates when that confidence get shaken. It's nothing but intentional sabotage for political gain - if they were actually concerned about the debt, they would have taken care of it when it mattered - during the budget talks.

Yes, a member state’s exit from European monetary union, without a parallel withdrawal from the EU would be legally impossible, still, while voluntary withdrawal is legally not possible, expulsion is conceivable.

They can violate the treaty, but I wasn't aware the EU had any power of arrest.

By strong government I meant one with a majority or at least a solid pact between parties, so that it's stable and can apply its measures without more delays.

If a stable government gets elected, the chances of one showing up that is going to hurt Greece even more by trying to force a balanced budget in a crisis situation like this seems to me to be very small.

It's still false by the way and also a bit unfair. Germany can't absorb such a massive amount of unemployed people, no country can, much less in a immediate time period.

The US absorbs twice as many with a vastly worse economy, and we don't even complain about it when the job market is good. I'm pretty sure we could do better, even.

Another option is for Germany to perform massive investments in Spain and other countries.

Spain's high unemployment rate is not related to the debt global crisis,

Yes it is. The only debt crisis is by people believing that government debt is a problem, and actually having the political influence to make decisions based on that nonsense.

in fact Spain's debt is lower than Germany or France. Also a life changing move can't be done in many cases due to other responsibilities. Regardless, unemployment rate in Spain is expected to go down in the coming years but it takes time.

By firing still more public employees, the unemployment rate is expected to fall?

Iceland is not in the EU, it's a pending candidate. It also has a population of 300.000 habitants which it's less than the city I live in. Those losses are not a big hit to other countries, much unlike Greece's possible losses if it left the euro.

Spain has taken more measures in this 4 months and a half than in the past eight years, I don't see it doomed at all, it is in fact making its job to move the euro forward.

Spain at this point can do nothing to save the Euro. It's all up to those in the Eurozone being willing to invest their current account surpluses in the rest of the Eurozone - but that is obviously not happening, nor going to happen to my understanding. The PIIGS are facing what amounts to a hard currency shortage in an environment where they don't even have the option of printing more money.

Simply put, for the PIIGS to experience growth, money can't be leaving the country faster than it's coming in. Money is leaving their banks, meaning their banks can't invest. Money is leaving their public sector, because of freaking austerity rules like:

Yes, Spain modified its Constitution to limit the public deficit in August 2011. It had 316 yes votes and only 5 against it.

- meaning that the two key methods by which growth is actually possible - public and private investment - have been removed as possibilities.

If Germany invests a trillion or so euros abroad, sure, the situation can be saved. But right now the PIIGS are basically paying for Germany's $200 billion account surplus. Almost all of that comes from the Eurozone

We're talking about a 60% devaluation and that's only as soon as they take their new coin, further devaluation is very likely to happen. Inflation would also go sky high, specially in the long term, much like Argentina which is now between 25-30%, the unofficial one that's it.

A 60% devaluation is a problem why? A nation's economic strength is not dominated by how much a single unit of currency is worth. They'll pay more for gas and other raw materials they can't make themselves. However, they'll actually have the opportunity to develop some sort of export industry not based on tourism, as opposed to pretty much only relying on tourism now.

And Greece is not Argentina. I would not be surprised at ~10% inflation, but that's not a hopeless situation.

I think that comparing Japan and China to Greece is very unfair, don't you think?

I could pick any Asian model. South Korea, Singapore, Malaysia, Taiwan - they are all examples of strong economies built in large part due to currency devaluation.

Without outside help they would have no investors, the interests would simply be way too high and no country no matter how big or small can survive in a global economy while being isolated, much less grow or fix such an economical meltdown.

But they will have investors if they leave the Euro. More so than they do now, even. Wages not pegged to the Euro means we can outsource to Greece, just for one example.

I don't think that the eurozone is an abomination, but then again I don't think that the USA is one either, please refrain from using those adjectives to keep this civil and respectful.

The Eurozone resembles the US under the Articles of Confederation more than it does an actual Europe United.

Greece supposedly falsified its economic statistics in order to gain EMU entry. I think that it's unfair to blame the EU for its troubles when it's actually them the ones that are trying to save Greece.

Which (among many other reasons) is why I usually point to Spain and Italy in such discussions - two countries that were behaving, but are getting punished for the association. At the very least, Germany could guarantee Italian and Spanish debt so that they aren't paying horrific interest rates for no other reason than lack of investor confidence.

[Serephino]

I have been reading a lot of John Dean and Barry Goldwater of late. There are several points that both of them make. It's not the conservative movement that is the problem, it's the authoritative leadership of the GOP who have subverted it and re-conned a lot of history to make themselves look good. In fact it was one of the ret-con attempts that got Dean out of his business outlook after Watergate.  (He was legal counsel for the President at the time).

If you look at it.. Modern Conservatism is very recent.. it grow out of opposition to the New Deal.. which I'm split on.. building infrastructure is good and some of the other things that came out of it isn't. Liberal/Progressive thought is much older, and in fact it could be argued that a LOT of the intent behind the Constitution and Bill of Rights came out of Progressive thought and philosphy.

I'm not so much conservative (by current terms) as more 'fiscally' minded. I see too many loop holes being put in. When a company makes BILLIONS in profits but earns a tax credit for hiding most of their cash overseas.. it's not fair or right. Particularly when at the same time they destroy something like 2,000 US jobs a year.

That is why I'm not happy with Mitt Romney.. he's made cash off of that process and is still doing so. I have see the democratic segment covering his 'Steel' mill closing left out one important fact.. He'd left leading Bain by then. He practiced those actions. He profited from it. But in the case of the 'Steel' ad, he wasn't directly involved.

He doesn't see anything wrong about the rape, pillage and burn business model though. That tells me enough.

The problem I have with the GOP is they (the Authoritarian leaders) have sold their souls to the culturally and moral conservative fringe. And see nothing wrong in leading them around by a leash to ensure they get to carry on business as usual.

I definitely agree that a company making Billions, but getting a tax credit isn't right.  I'm not the type of person that wants a big, bloated government.  I like simple.  However, the government is supposed to see to the welfare of its people, and the US just isn't doing that anymore.  Naturally, they make us feel safe with the war on terror, which is just a big waste if you ask me. 

I'm all for getting the national budget under control, but slashing education and social programs is not the way to do it.  Too many people depend on those programs.  I get food stamps, and sometimes it's all that keeps us from going hungry when we have a bad month.  I got something in my email that said they wanted to cut out the free school lunch program.  I got free lunch all through Middle School because I was being raised by a single mom who was trying to get a degree.  But according to the GOP my mom was just a lazy whore (let's forget the fact she was married but my dad died). 

Oh, yes, the extremism definitely needs to stop, I'm just not sure how that can happen.  I'm not looking forward to this election year.  Last time Obama was just as racist as his Christian minister, but a month later was a threat to the nation because he was an African Muslim.  I can only imagine what their going to say this time.  I like watching the Daily Show with John Stuart because he doesn't actually have to make anything up.  All he had to do is play clips of people speaking.

I don't like the direction this country is headed in.  People with lots of money can pool it together and fund political ads only half based in reality, if at all...  There is no transparency to know where that money came from.  Where did all the sane people go?  I want them back. 

 

[Kirce]

Hey AndyZ, I think that your protest wasn't directed at my posts, however if you found them poisonous... it wasn't in any intentional way.

Vekseid, Spain's measures are very little compared to what it really needs to do. Its current structure is absurd. It's 17 mini-states with its own parlaments and competences in health and education among others. The amount of politicians in that country is way too much, around 450000 and its free privileges, from the top of my mind, is around 20000 cars, last generation phones and bodyguards (which is pointless now that ETA is gone).

And that's just the tip of the iceberg. The senate, by law, is rendered useless by the parlament and it has become a lair of old politicians to keep on sucking resources from the state. And I rather not talk about the monarchy which is as useless and shameful as the senate. Syndicates are subventioned by the state, same goes for the political parties

The solution for Spain? Remove all of the above to generate leeway and confidence. Will that happen? "lol no!". The current politicians in that country is not willing to sacrifice themselves in order to save the country. So if Greece leaves the euro that will cost around 34000 million euros to Spain, and that's only if Portugal doesn't fall, if it does then Spain is fully screwed. And of course if Spain falls the eurozone also does because Spain's economy is way too massive in comparison, specially their banks.

[Callie Del Noire]

I think that Spain (as well as possibly Portugal and Ireland) are all watching the Greece situation closely. There was more than a bit of concern about this when I lived there ten years ago. Germany still remembers, at least institutionally, a time when their currency wasn't worth the paper it was printed on. (Staying with friends outside of Heidleburg I once saw a million mark coin). That shapes a lot of their outlook. 

There is a lot of things that stand out in my time in Crete. One for example was that supposedly you didn't have to pay taxes on a property that wasn't complete. I saw a lot of houses with one or two spots of rebar sticking out of them. I don't see how things will go till the Greek government is finally rebuilt, though I confess to more than some misgivings at the surge that the fascists have made.