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Australia3894 Posts
On February 09 2012 09:28 Skilledblob wrote:Show nested quote +On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore.
If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy.
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On February 09 2012 09:28 Skilledblob wrote:Show nested quote +On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. Show nested quote +On February 09 2012 09:19 Corsica wrote:
Get out of Euro Union, devalue the currency, so that demand for greece's goods will go up, NX will go up, GDP will go up...ez the problem is there are no greece goods. So if you cant sell anything it doesnt matter how worthless your currency is.
Ye thats spending too much money (relative to income). With flexible labor markets wages would fall when tourism decreases. This is what they are supposed to do.
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On February 09 2012 09:31 Probulous wrote:Show nested quote +On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy.
greece got into the Euro zone because they faked their records. That's really all there is to it.
What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece.
On February 09 2012 09:34 Hider wrote:
Ye thats spending too much money (relative to income). With flexible labor markets wages would fall when tourism decreases. This is what they are supposed to do.
I dont see how that's related to spending too much money at all. Anad your so called "flexible markets" would only achieve one thing and that is destroy the inland demand for products. Less wages mean less sold goods, means less taxes, means less government jobs ( something greece relys on ), this starts a chain reaction that destroys your inland demand.
The same is happening in Germany right now. For the last 10 years the government destroyed the pensions, the wages are in the gutter, the jobs are as insecure as they never were, domestic demand is plumeting, we have at least 16% people without jobs or in jobs which dont provide for an individual and our government dept is through the roof with no way of healing.
In foreign news you might hear that Germany is doing so great but in reality we are not. This "positive" development of Germany is the result of legalized slave labor going on here for the last decade and we'll have to pay the bill soon.
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On February 09 2012 09:34 Hider wrote:Show nested quote +On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. On February 09 2012 09:19 Corsica wrote:
Get out of Euro Union, devalue the currency, so that demand for greece's goods will go up, NX will go up, GDP will go up...ez the problem is there are no greece goods. So if you cant sell anything it doesnt matter how worthless your currency is. Ye thats spending too much money (relative to income). With flexible labor markets wages would fall when tourism decreases. This is what they are supposed to do.
More importantly standard of living, whether of individuals' own spending or government spending on their behalf, would fall when the economy is producing less (as in less tourism). (unless people are relying on savings)
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On February 09 2012 09:38 Krikkitone wrote:Show nested quote +On February 09 2012 09:34 Hider wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. On February 09 2012 09:19 Corsica wrote:
Get out of Euro Union, devalue the currency, so that demand for greece's goods will go up, NX will go up, GDP will go up...ez the problem is there are no greece goods. So if you cant sell anything it doesnt matter how worthless your currency is. Ye thats spending too much money (relative to income). With flexible labor markets wages would fall when tourism decreases. This is what they are supposed to do. More importantly standard of living would fall when the economy is producing less (as in less tourism). (unless people are relying on savings)
Of course. They are having a crisis. Their standard of livings are supposed to decrease. But its only temporary. When wages get close to (sustainable) equlibrium, the production will start to increase again.
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Australia3894 Posts
On February 09 2012 09:37 Skilledblob wrote:Show nested quote +On February 09 2012 09:31 Probulous wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy. greece got into the Euro zone because they faked their records. That's really all there is to it.What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece.
Then why is the euro keeping them in? I know Germany is benefitting through their exports but it has already lead to a bailout for Ireland and Spain, Italy and Portugal are or were close at points. The issue here is how the EU will deal with this in the future. What stops a country faking their records after this is settled? What are the punishments? How are they enforced? I can't see rational (do they exist?) investors having any faith in the euro if these issues are not sorted out.
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On February 09 2012 09:42 Probulous wrote:Show nested quote +On February 09 2012 09:37 Skilledblob wrote:On February 09 2012 09:31 Probulous wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy. greece got into the Euro zone because they faked their records. That's really all there is to it.What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece. Then why is the euro keeping them in? I know Germany is benefitting through their exports but it has already lead to a bailout for Ireland and Spain, Italy and Portugal are or were close at points. The issue here is how the EU will deal with this in the future. What stops a country faking their records after this is settled? What are the punishments? How are they enforced? I can't see rational (do they exist?) investors having any faith in the euro if these issues are not sorted out.
You cant get kicked out of treaties inside the EU. Nobody can kick anybody out all you can do is leave on your own. And what sort of punishments are we talking about? Money? Haha good joke Greece doesnt have money. So you cant really punish them either. All you can do is keep plugging the holes to keep the boat floating.
And dont get me wrong Germany is gaining a lot by "helping" Greece. The bailouts are no gifts. Greece will have to pay them back earning germany a lot of money.
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On February 09 2012 09:37 Skilledblob wrote:Show nested quote +On February 09 2012 09:31 Probulous wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy. greece got into the Euro zone because they faked their records. That's really all there is to it. What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece. Show nested quote +On February 09 2012 09:34 Hider wrote:
Ye thats spending too much money (relative to income). With flexible labor markets wages would fall when tourism decreases. This is what they are supposed to do.
I dont see how that's related to spending too much money at all. Anad your so called "flexible markets" would only achieve one thing and that is destroy the inland demand for products. Less wages mean less sold goods, means less taxes, means less government jobs ( something greece relys on ), this starts a chain reaction that destroys your inland demand.
Spending too much money --> Too high wages + Certain industries have hired too many people while other industries has too few.
The solution is very obivious if you accept that the above is the problem.
Less wages ---> More goods produced. Why do you btw think that PSI wants greece governemnt to decrease minimum wage?
Less governement jobs --> less governemnt spending --> Helps balancing deficits.
Chain reaction --> Decreases wages (which is the solution).
Keynesians (mistakenly) think that this chain reaction is bad and that it will last forever. It won't. Remember this: Consumers has a marginal utility of goods. When prices are above that marginal utlity, they won't buy anything. The "negative" chain reaction is actually positive, as it help speed up the nessarcary proces until prices get down to that level of marginal utility.
And no its not like money not spend = money wasted.
Money not consumed = money invested, which creates higher long term consumption.
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Flexible markets only in Greece or EU wide? At least theoretically as asset prices fall in Greece because of the euro-imposed deflation we should see people in 'the good' part of the EU scoop up olive zone assets like houses or whole islands while factory owners should become more open to employing Greeks and Spaniards because those guys after 3-5 years of unemployment at 20% should be happy to take any job whereas a German or a Dutch person might want more than minimum wage for factory work. The problem is though, if Germany continues to run a massive trade surplus vs everyone else where is the demand suppose to come from for Greek or Spanish made goods? Are Germans prepared to have a more balanced economy? Doesnt seem like it.
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On February 09 2012 09:49 Hider wrote:Show nested quote +On February 09 2012 09:37 Skilledblob wrote:On February 09 2012 09:31 Probulous wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy. greece got into the Euro zone because they faked their records. That's really all there is to it. What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece. On February 09 2012 09:34 Hider wrote:
Ye thats spending too much money (relative to income). With flexible labor markets wages would fall when tourism decreases. This is what they are supposed to do.
I dont see how that's related to spending too much money at all. Anad your so called "flexible markets" would only achieve one thing and that is destroy the inland demand for products. Less wages mean less sold goods, means less taxes, means less government jobs ( something greece relys on ), this starts a chain reaction that destroys your inland demand. Keynesians (mistakenly) think that this chain reaction is bad and that it will last forever. No they dont. Keynes, and Keynesians are pretty clear that one way out of a crisis is to wait long enough for a deflationary depression to be so severe that prices are in fact reset eventually. What Keynesians are about is avoiding those 5-10 years of defletionary depression and an economic trend where "new" full employment is higher than the previous trend line.
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On February 09 2012 09:49 Sub40APM wrote:
Are Germans prepared to have a more balanced economy? Doesnt seem like it.
what Germany does to counter is we lend money to countries like Greece and then make them buy our products.
For example some years ago we lended Greece a few billion Euros and at the same time made them buy like 5 submarines from us ( germany is not allowed to build big submarines btw  ). So this means we profit because greece still has to pay back the lended money with interests and we sold some useless shit to them. Pretty neat huh?
Also wages in Germany are in the dumbster right now. 40 million people in working age 10% of them have no job and at least 4 million have to work in jobs that pay around 400€ per month
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Australia3894 Posts
On February 09 2012 09:47 Skilledblob wrote:Show nested quote +On February 09 2012 09:42 Probulous wrote:On February 09 2012 09:37 Skilledblob wrote:On February 09 2012 09:31 Probulous wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy. greece got into the Euro zone because they faked their records. That's really all there is to it.What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece. Then why is the euro keeping them in? I know Germany is benefitting through their exports but it has already lead to a bailout for Ireland and Spain, Italy and Portugal are or were close at points. The issue here is how the EU will deal with this in the future. What stops a country faking their records after this is settled? What are the punishments? How are they enforced? I can't see rational (do they exist?) investors having any faith in the euro if these issues are not sorted out. You cant get kicked out of treaties inside the EU. Nobody can kick anybody out all you can do is leave on your own.
And people still think the euro is a good idea 
Based on this it seems that they euro is at the mercy of the people setting individual national budgets. How is that viable? To me it seems like a family where everyone has access to the credit card.
"No Johnny you can't buy that xbox we don't have the money. What the hell you bought it anyway? Well don't do it again. Gah stop buying stuff we can't afford. Johnny, now Johnny seriously this becoming an issue. Why do you need a sofa, you don't have a house? Johnny we are enforcing a budget on you, you can only spend this much. We just had a look at your statement and you have spent twice as your allowance. Bad Johnny, no allowance until you can learn to save. What the hell don't you understand, you are not allowed to use our credit card. Stop it dammit. Alright that is enough, get out. Of wait we can't do that, ok just stop spending our money."
Am I missing something?
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On February 09 2012 09:49 Hider wrote:
Less wages ---> More goods produced. Why do you btw think that PSI wants greece governemnt to decrease minimum wage?
stil lcant figure out how you got to this assumption that low wages would mean more produced and consumed goods. Lower wages mean that less can be consumed which leads to less being produced. And even if the production does not decrease because of good exports it still doesnt mean shit for the domestic market because there is still no money to be spend.
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On February 09 2012 09:25 Hider wrote:Show nested quote +On February 09 2012 09:18 vetinari wrote:On February 09 2012 08:50 Hider wrote:On February 09 2012 08:40 vetinari wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? They got into the mess by entering the euro. No more, no less. A single currency without a single country is a road to disaster. The federal government can indebt itself indefinitely, because all government spending is financed by printing money. Allow me to repeat that. All government spending is financed by printing money. All taxation is the burning of money. The government also accepts deposits of cash, and pays interests on those deposits. We call this federal government debt No they didn't. The euro is sustainable if countries keeps a decent budget. Greece didn't. (However obv. as countries has incentives to not act responsible the euro is not sustainable.) Its not like you need a cheap currency to be have large exports. If wages are flexible, greece can export as well. I don't get your point regarding burning money? Aren't taxes used to finance spendings? Printing money is kinda last resorder solution. Taxes are used to finance spending only when we are using a commodity currency. That is, using a precious metal as a currency. In the world of fiat currencies, taxes do not finance spending. What taxes do, is give value to fiat currency within the country, and reduce the spending power of the private sector. Thought experiment: A new country is founded, using TL Dollars ($) as the fiat currency, with the two of us as the only citizens. There currently exist no TL Dollars in circulation. The government decides to enact a flat tax of $1000 per person. However, since there exist no TL dollars, no one can pay the tax. So, the government decides to hire me to build a road, and pays me $3000. I pay you $1500 to build me a house. Since we need the TL dollars to pay the taxes (which we need to do in order to not find ourselves in prison), we accept the fiat TL dollars for payment, even though they are all freshly printed, and no taxes have yet been paid. On tax day, we pay $1000 each to the government. The government burns the paper money. We each have $500 left over. The government decides to let us deposit our spare cash with the central bank, and they pay us 5% interest. So, what happened? The government printed $3000 dollars, then taxed us 2000, destroying the money in the process, while issuing 1000 dollars of government debt. Thats most likely not how a new new country will be founded. They will most likely print money first (like 3.000$). Then they would hire 2 people and pay them 3.000$ in wages, and tax half of it. Sure they will slowly inflate the currency, but they dont (nessarscily) finance spending by inflations. Not sure where you get all this.
Yes, they printed money first. They taxed second. This necessarily means that spending comes before taxation in a fiat currency system.
Hence, the purpose of taxation is not to finance spending, but rather to make people use the fiat currency, because the currency is the only one accepted by the government for the payment of taxes. The second purpose of taxation is to lower private sector purchasing power, so that the government deficit does not increase aggregate demand for goods and servives over potential supply.
(some amount of deficit spending is non-inflationary, as private sector does not produce full employment on its own, unless you count subsistence as employment.)
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On February 09 2012 09:59 Skilledblob wrote:Show nested quote +On February 09 2012 09:49 Hider wrote:
Less wages ---> More goods produced. Why do you btw think that PSI wants greece governemnt to decrease minimum wage?
stil lcant figure out how you got to this assumption that low wages would mean more produced and consumed goods. Lower wages mean that less can be consumed which leads to less being produced. And even if the production does not decrease because of good exports it still doesnt mean shit for the domestic market because there is still no money to be spend.
I think what he imagines happening is that lower wages --> less consumption of foreign goods, more consumption of domestically produced goods as foreign goods are priced out of the market.
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On February 09 2012 09:55 Probulous wrote:Show nested quote +On February 09 2012 09:47 Skilledblob wrote:On February 09 2012 09:42 Probulous wrote:On February 09 2012 09:37 Skilledblob wrote:On February 09 2012 09:31 Probulous wrote:On February 09 2012 09:28 Skilledblob wrote:On February 09 2012 08:38 Hider wrote:On February 09 2012 08:05 vetinari wrote:On February 09 2012 07:58 Hider wrote:On February 09 2012 07:55 vetinari wrote:
Greece will have to default and leave the euro. Its going to be chaos for them, but staying in the euro is economic suicide, because austerity during a recession is unbelievably retarded. If labour markets were very flexible they could continue staying in the euro. But since the labour markets aren't able to accept that wages need to be lower, and some people need to befired, the country would benefit from a devalulation of the currency. So while austerity is the solution to the problem of too much spending, the crises will be prolonged when unions has too much power, and government insitutions interfer with the market. Greece's problem isn't too much spending, its too little spending. Too much spending is when you have full employment and inflation increasing. This is why entering the euro is such a dumb idea: because a nation sovereign in its currency has the ability to spend however much it needs to maintain full employment indefinitely. How did greece ever get into this mess? By spending too much when times were good? But according to that logic they should never experiment a contracticing GDP? Cus they spend a lot of money? Greece has these problems now because their government is crap. Rampant tax fraud and an economy that was largely tourism based. This could only lead to desaster when the harsh years in other countries started and not as many tourists were coming anymore. If it is so obvious now, why were they let into the euro in the first place? It must have been clear that having access to cheaper credit would not stop this behaviour even if there were so called penalties for it. A far more important question is how will this be prevented in the future. I have yet to hear a decent explanation aside from a central fiscal policy. greece got into the Euro zone because they faked their records. That's really all there is to it.What Greece has to do is get it's fiscal politics in order. I cant think of anything more. The greece industry is hardly exsisting, most of it's money comes from tourism. But through entering the Euro zone and probably out of greed too, vacations in greece became really expensive compared to maybe ten years ago. So this means they destroyed lots of their own tourism income through too high prices. This led to tourists going to Turkey instead of Greece. Then why is the euro keeping them in? I know Germany is benefitting through their exports but it has already lead to a bailout for Ireland and Spain, Italy and Portugal are or were close at points. The issue here is how the EU will deal with this in the future. What stops a country faking their records after this is settled? What are the punishments? How are they enforced? I can't see rational (do they exist?) investors having any faith in the euro if these issues are not sorted out. You cant get kicked out of treaties inside the EU. Nobody can kick anybody out all you can do is leave on your own. And people still think the euro is a good idea Based on this it seems that they euro is at the mercy of the people setting individual national budgets. How is that viable? To me it seems like a family where everyone has access to the credit card. Am I missing something?
well basically the Euro is a good idea but not for everyone. For Germany in particular it is a great idea because we can sell lots of stuff but for countries like Italy, Greece or Spain which allready had some Inflation going the Euro certainly did not help at all.
On February 09 2012 10:00 Sub40APM wrote:Show nested quote +On February 09 2012 09:59 Skilledblob wrote:On February 09 2012 09:49 Hider wrote:
Less wages ---> More goods produced. Why do you btw think that PSI wants greece governemnt to decrease minimum wage?
stil lcant figure out how you got to this assumption that low wages would mean more produced and consumed goods. Lower wages mean that less can be consumed which leads to less being produced. And even if the production does not decrease because of good exports it still doesnt mean shit for the domestic market because there is still no money to be spend. I think what he imagines happening is that lower wages --> less consumption of foreign goods, more consumption of domestically produced goods as foreign goods are priced out of the market.
well like I said this does not apply to Greece because there is hardly any domestic industry.
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On February 09 2012 09:54 Skilledblob wrote:Show nested quote +On February 09 2012 09:49 Sub40APM wrote:
Are Germans prepared to have a more balanced economy? Doesnt seem like it. what Germany does to counter is we lend money to countries like Greece and then make them buy our products. For example some years ago we lended Greece a few billion Euros and at the same time made them buy like 5 submarines from us ( germany is not allowed to build big submarines btw ). So this means we profit because greece still has to pay back the lended money with interests and we sold some useless shit to them. Pretty neat huh? Also wages in Germany are in the dumbster right now. 40 million people in working age 10% of them have no job and at least 4 million have to work in jobs that pay around 400€ per month
This "profit" is questionable, since we don't know if Greece will be able to pay the lend.
About those big submarines ... it seems WORLD players didn't learn from WW1 and are letting you macro up again :/
(And Poland produces the majority of parts for those submarines o_0)
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On February 09 2012 09:59 Skilledblob wrote:Show nested quote +On February 09 2012 09:49 Hider wrote:
Less wages ---> More goods produced. Why do you btw think that PSI wants greece governemnt to decrease minimum wage?
stil lcant figure out how you got to this assumption that low wages would mean more produced and consumed goods. Lower wages mean that less can be consumed which leads to less being produced. And even if the production does not decrease because of good exports it still doesnt mean shit for the domestic market because there is still no money to be spend.
Economy 101 - less wages, cheaper to produce products (labor costs less). Your logic is totally flawed; under what you are saying, you could just raise waiges artificially, which would increase purchasing power and increase production, which is obviously not true, because if it was we would have solved poverty already.
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On February 09 2012 10:02 5ukkub wrote:Show nested quote +On February 09 2012 09:54 Skilledblob wrote:On February 09 2012 09:49 Sub40APM wrote:
Are Germans prepared to have a more balanced economy? Doesnt seem like it. what Germany does to counter is we lend money to countries like Greece and then make them buy our products. For example some years ago we lended Greece a few billion Euros and at the same time made them buy like 5 submarines from us ( germany is not allowed to build big submarines btw ). So this means we profit because greece still has to pay back the lended money with interests and we sold some useless shit to them. Pretty neat huh? Also wages in Germany are in the dumbster right now. 40 million people in working age 10% of them have no job and at least 4 million have to work in jobs that pay around 400€ per month This "profit" is questionable, since we don't know if Greece will be able to pay the lend. About those big submarines ... it seems WORLD players didn't learn from WW1 and are letting you macro up again :/ (And Poland produces the majority of parts for those submarines o_0)
well gotta get Danzig and Stettin back someday 
j/k
On February 09 2012 10:02 GoTuNk! wrote:Show nested quote +On February 09 2012 09:59 Skilledblob wrote:On February 09 2012 09:49 Hider wrote:
Less wages ---> More goods produced. Why do you btw think that PSI wants greece governemnt to decrease minimum wage?
stil lcant figure out how you got to this assumption that low wages would mean more produced and consumed goods. Lower wages mean that less can be consumed which leads to less being produced. And even if the production does not decrease because of good exports it still doesnt mean shit for the domestic market because there is still no money to be spend. Economy 101 - less wages, cheaper to produce products (labor costs less). Your logic is totally flawed; under what you are saying, you could just raise waiges artificially, which would increase purchasing power and increase production, which is obviously not true, because if it was we would have solved poverty already.
that you have to find a middle ground should be obvious. And how can a european country hope to compete with countries like India, China or other south-east asian countries when it comes to low wages? It just doesnt work.
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EPT
