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On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing.
Maybe the government employs can create wealth and because of that pay their own salary ?
Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist.
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On February 10 2012 23:18 WhiteDog wrote:Show nested quote +On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist.
In theorie that can work.
In Greece it obviously didn't  .
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On February 10 2012 23:18 Velr wrote:Show nested quote +On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. In theorie that can work. In Greece it obviously didn't .
Of course it didn't work in a free market environment (the EU zone). The money that the government gave to the government emloyee was most likely used to buy german, english or french goods and not greek goods...
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On February 10 2012 23:37 WhiteDog wrote:Show nested quote +On February 10 2012 23:18 Velr wrote:On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. In theorie that can work. In Greece it obviously didn't . Of course it didn't work in a free market environment (the EU zone). The money that the government gave to the government emloyee was most likely used to buy german, english or french goods and not greek goods...
So you'd want to fall back to the times when mercantilism was in?
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On February 10 2012 21:37 paralleluniverse wrote:Show nested quote +On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider 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:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry
Your posts usually has a higher quality. This is pretty dissapointing.
1) No reason to shit on other people with a different opinion than you.
2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis?
I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century
Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link).
3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well".
This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights).
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On February 10 2012 23:18 WhiteDog wrote:Show nested quote +On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist.
If you discount "production created" with oppurtunity cost, then government is destroying wealth.
The formula could look like this:
You have a scare amount of ressources (consiting of labour and commodities). Either the government owns these ressources or the private sector does. You can't have both.
Wealth created =
The value of the government transformation (=from ressources to final product) proces (of these ressources)
- The value of the private sector transformation proces (given they had the ability to use those ressources).
This btw is a completely standard way of measuring wealth creation as an economist (thinking in terms of opp. costs.). (Its not just austrians who defines wealth creation in this way.)
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On February 10 2012 23:55 SilentchiLL wrote:Show nested quote +On February 10 2012 23:37 WhiteDog wrote:On February 10 2012 23:18 Velr wrote:On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. In theorie that can work. In Greece it obviously didn't . Of course it didn't work in a free market environment (the EU zone). The money that the government gave to the government emloyee was most likely used to buy german, english or french goods and not greek goods... So you'd want to fall back to the times when mercantilism was in?
Not at all. There are two solution : either the europe decide to give themselves some kind of economic policy in order to help the weakest link of the euro zone to create themselves comparativ advantages, or you permit some country to temporarily get out of the free zone to create those advantages (it is the idea, described by Mill, of the industry at birth).
On February 11 2012 00:13 Hider wrote:Show nested quote +On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. If you discount "production created" with oppurtunity cost, then government is destroying wealth. The formula could look like this: You have a scare amount of ressources (consiting of labour and commodities). Either the government owns these ressources or the private sector does. You can't have both. Wealth created = The value of the government transformation (=from ressources to final product) proces (of these ressources) - The value of the private sector transformation proces (given they had the ability to use those ressources). This btw is a completely standard way of measuring wealth creation as an economist (thinking in terms of opp. costs.). (Its not just austrians who defines wealth creation in this way.)
What you are describing is the eviction effect (crowding out in english I think). Since the eviction effect is not total (or you are a monetarian and this discussion is just ridiculous) then the government is creating wealth.
The whole idea of the public policies is that the private sector does not have the ressource to create any wealth. Not to mention the state is one of the only economical agent that can endebt itself that much.
They create less than the private sector, but they create wealth. There is no discussion about that.
I suggest you accept that the economy is not as simple as you would like to. I'm sure you would be really interesting if you were not trying to make us believe that the state is always a bad thing for economy no matter what.
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Reg. EU Situation:
EU finance ministers declined 2nd bailout package, as they are worried greece politicans might not upheld their commitments.
Personally I think Greece is fucked no matter what. If Greece goes bankrupt then it will hurt short-termish, a lot. The alternative is to keep wasting ressources in the dead hole for maybe 1-3 years more.
What is going to be interesting in the spring is the greece election. As it seems likely they will elect the (semi?)socialist Hollander, this worries me a lot. He wants to increase government jobs, which might be a good way to convince voters. But it might very will put France into long-term debt problems.
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On February 11 2012 00:19 WhiteDog wrote:Show nested quote +On February 10 2012 23:55 SilentchiLL wrote:On February 10 2012 23:37 WhiteDog wrote:On February 10 2012 23:18 Velr wrote:On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. In theorie that can work. In Greece it obviously didn't . Of course it didn't work in a free market environment (the EU zone). The money that the government gave to the government emloyee was most likely used to buy german, english or french goods and not greek goods... So you'd want to fall back to the times when mercantilism was in? Not at all. There are two solution : either the europe decide to give themselves some kind of economic policy in order to help the weakest link of the euro zone to create themselves comparativ advantages, or you permit some country to temporarily get out of the free zone to create those advantages (it is the idea, described by Mill, of the industry at birth). Show nested quote +On February 11 2012 00:13 Hider wrote:On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. If you discount "production created" with oppurtunity cost, then government is destroying wealth. The formula could look like this: You have a scare amount of ressources (consiting of labour and commodities). Either the government owns these ressources or the private sector does. You can't have both. Wealth created = The value of the government transformation (=from ressources to final product) proces (of these ressources) - The value of the private sector transformation proces (given they had the ability to use those ressources). This btw is a completely standard way of measuring wealth creation as an economist (thinking in terms of opp. costs.). (Its not just austrians who defines wealth creation in this way.) What you are describing is the eviction effect (crowding out in english I think). Since the eviction effect is not total (or you are a monetarian and this discussion is just ridiculous) then the government is creating wealth. The whole idea of the public policies is that the private sector does not have the ressource to create any wealth. Not to mention the state is one of the only economical agent that can endebt itself that much. They create less than the private sector, but they create wealth. There is no discussion about that. I suggest you accept that the economy is not as simple as you would like to. I'm sure you would be really interesting if you were not trying to make us believe that the state is always a bad thing for economy no matter what.
Crowing out effect affects interest rates.
This really isn't relevant here. In this scenrio the ressources are avaiable to both.
If ressources only are avaiable to government, then you need to explain why that would be the case.
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On February 11 2012 00:05 Hider wrote:Show nested quote +On February 10 2012 21:37 paralleluniverse wrote:On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider 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:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry Your posts usually has a higher quality. This is pretty dissapointing. 1) No reason to shit on other people with a different opinion than you. 2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis? I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link). 3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well". This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights).
A bit hypocritical for an Austrian to be asking for empirical evidence. The world is full of examples of information asymmetry, e.g. health insurance, selling financial derivatives, etc.
Stieglitz won a Nobel Prize for showing that free markets are always inefficient because of information asymmetry, which is why regulation is needed to correct for it. Putting your faith in free markets is foolish, the idea is fundamentally flawed because of information asymmetry.
In fact, a quick google search turns up several articles showing the cause of the financial crisis boils down to information asymmetry:
+ Show Spoiler +
This has now deviated off the topic of this thread.
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On February 11 2012 00:30 Hider wrote:
Reg. EU Situation:
EU finance ministers declined 2nd bailout package, as they are worried greece politicans might not upheld their commitments.
Personally I think Greece is fucked no matter what. If Greece goes bankrupt then it will hurt short-termish, a lot. The alternative is to keep wasting ressources in the dead hole for maybe 1-3 years more.
What is going to be interesting in the spring is the greece election. As it seems likely they will elect the (semi?)socialist Hollander, this worries me a lot. He wants to increase government jobs, which might be a good way to convince voters. But it might very will put France into long-term debt problems.
Not all Greek parties in the coalition agree with the package either, 1 party leader doesn't want to vote.
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On February 11 2012 00:39 paralleluniverse wrote:Show nested quote +On February 11 2012 00:05 Hider wrote:On February 10 2012 21:37 paralleluniverse wrote:On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider 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:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry Your posts usually has a higher quality. This is pretty dissapointing. 1) No reason to shit on other people with a different opinion than you. 2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis? I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link). 3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well". This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights). A bit hypocritical for an Austrian to be asking for empirical evidence. The world is full of examples of information asymmetry, e.g. health insurance, selling financial derivatives, etc. Stieglitz won a Nobel Prize for showing that free markets are always inefficient because of information asymmetry, which is why regulation is needed to correct for it. Putting your faith in free markets is foolish, the idea is fundamentally flawed because of information asymmetry. In fact, a quick google search turns up several articles showing the cause of the financial crisis boils down to information asymmetry: + Show Spoiler +This has now deviated off the topic of this thread.
1) I didn't ask for empircal evidence. I asked for empircal studies. Thats not being a hyprocit. People (like you i believe) has constantly claimed how the austrian school has been prooved wrong by history - By what studies I ask? Then I receive no answer.
2) Thats not free markets. Free markets = well defined property rights. Why aren'y you responding to what I have (now said) twice in this debate?
3) We already had this discussion previously.
Health care sector = NOt even close to "free".
Private sector = Not even close to free.
I argued for that in the rep. thread, but (apparently) you didn't understand the implicaitons of it, and why financial instruments don't need government regulations. But I feel like I am wasting too much time repeating my self again and again. If you want to have a serious discussion then try to understand the austrian school and what free market implies (by actually reading my posts or doing other kind of research).
So unless you show me that you actually understand the Austrian business cycle theory, but just do not understand why financial instruments isn't gonna be a problem (in a free market), then I will gladly explain it.
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On February 11 2012 00:31 Hider wrote:Show nested quote +On February 11 2012 00:19 WhiteDog wrote:On February 10 2012 23:55 SilentchiLL wrote:On February 10 2012 23:37 WhiteDog wrote:On February 10 2012 23:18 Velr wrote:On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. In theorie that can work. In Greece it obviously didn't . Of course it didn't work in a free market environment (the EU zone). The money that the government gave to the government emloyee was most likely used to buy german, english or french goods and not greek goods... So you'd want to fall back to the times when mercantilism was in? Not at all. There are two solution : either the europe decide to give themselves some kind of economic policy in order to help the weakest link of the euro zone to create themselves comparativ advantages, or you permit some country to temporarily get out of the free zone to create those advantages (it is the idea, described by Mill, of the industry at birth). On February 11 2012 00:13 Hider wrote:On February 10 2012 23:18 WhiteDog wrote:On February 10 2012 23:07 Ryuhou)aS( wrote:
I've heard the Greece's government employs some number over 50% of the greek people. I was just wondering, how nobody else noticed that taxes of the minority (in this case Greek citizens NOT employed by the government) pay the paychecks of the majority. ..It just doesn't make any sense, the constant and neverending build up of government, and I think it's probably what had the most to do with the Greek economy crashing. Maybe the government employs can create wealth and because of that pay their own salary ? Also, the salary given to the government employee is actually used by them for consumption - so they create a demand and because of that permit the private sector to exist. If you discount "production created" with oppurtunity cost, then government is destroying wealth. The formula could look like this: You have a scare amount of ressources (consiting of labour and commodities). Either the government owns these ressources or the private sector does. You can't have both. Wealth created = The value of the government transformation (=from ressources to final product) proces (of these ressources) - The value of the private sector transformation proces (given they had the ability to use those ressources). This btw is a completely standard way of measuring wealth creation as an economist (thinking in terms of opp. costs.). (Its not just austrians who defines wealth creation in this way.) What you are describing is the eviction effect (crowding out in english I think). Since the eviction effect is not total (or you are a monetarian and this discussion is just ridiculous) then the government is creating wealth. The whole idea of the public policies is that the private sector does not have the ressource to create any wealth. Not to mention the state is one of the only economical agent that can endebt itself that much. They create less than the private sector, but they create wealth. There is no discussion about that. I suggest you accept that the economy is not as simple as you would like to. I'm sure you would be really interesting if you were not trying to make us believe that the state is always a bad thing for economy no matter what. Crowing out effect affects interest rates. This really isn't relevant here. In this scenrio the ressources are avaiable to both. If ressources only are avaiable to government, then you need to explain why that would be the case.
Let's make it clear. When the state invest money, it create a crowding effect that makes it less efficient in theory than private investment.
It's valid. But as I said, the rest of what you said is just false, because public investment is made exactly because the private sector does not have the ressource or will not invest in the sector in question.
Not to mention your equation can be used the exact same way to say that the private sector is destroying wealth - do you have any proof that the private sector is more efficient in producing anything than the public sector ?
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On February 11 2012 00:49 Hider wrote:Show nested quote +On February 11 2012 00:39 paralleluniverse wrote:On February 11 2012 00:05 Hider wrote:On February 10 2012 21:37 paralleluniverse wrote:On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider 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:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry Your posts usually has a higher quality. This is pretty dissapointing. 1) No reason to shit on other people with a different opinion than you. 2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis? I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link). 3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well". This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights). A bit hypocritical for an Austrian to be asking for empirical evidence. The world is full of examples of information asymmetry, e.g. health insurance, selling financial derivatives, etc. Stieglitz won a Nobel Prize for showing that free markets are always inefficient because of information asymmetry, which is why regulation is needed to correct for it. Putting your faith in free markets is foolish, the idea is fundamentally flawed because of information asymmetry. In fact, a quick google search turns up several articles showing the cause of the financial crisis boils down to information asymmetry: + Show Spoiler +This has now deviated off the topic of this thread. 1) I didn't ask for empircal evidence. I asked for empircal studies. Thats not being a hyprocit. People (like you i believe) has constantly claimed how the austrian school has been prooved wrong by history - By what studies I ask? Then I receive no answer. 2) Thats not free markets. Free markets = well defined property rights. Why aren'y you responding to what I have (now said) twice in this debate? 3) We already had this discussion previously. Health care sector = NOt even close to "free". Private sector = Not even close to free. I argued for that in the rep. thread, but (apparently) you didn't understand the implicaitons of it, and why financial instruments don't need government regulations. But I feel like I am wasting too much time repeating my self again and again. If you want to have a serious discussion then try to understand the austrian school and what free market implies (by actually reading my posts or doing other kind of research). So unless you show me that you actually understand the Austrian business cycle theory, but just do not understand why financial instruments isn't gonna be a problem (in a free market), then I will gladly explain it.
It is impossible to live in a world without information asymmetry, just as it is impossible to live in a world where no one ever lies. Therefore, free markets, under the strict definition of the term, cannot exist.
The next closest thing, unregulated markets, are bound to fail and be inefficient because of information asymmetry.
As I've said before, if your models only apply in a fantasyland that cannot exist in reality, then what is it good for?
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On February 11 2012 00:49 Hider wrote:Show nested quote +On February 11 2012 00:39 paralleluniverse wrote:On February 11 2012 00:05 Hider wrote:On February 10 2012 21:37 paralleluniverse wrote:On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider 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:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry Your posts usually has a higher quality. This is pretty dissapointing. 1) No reason to shit on other people with a different opinion than you. 2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis? I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link). 3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well". This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights). A bit hypocritical for an Austrian to be asking for empirical evidence. The world is full of examples of information asymmetry, e.g. health insurance, selling financial derivatives, etc. Stieglitz won a Nobel Prize for showing that free markets are always inefficient because of information asymmetry, which is why regulation is needed to correct for it. Putting your faith in free markets is foolish, the idea is fundamentally flawed because of information asymmetry. In fact, a quick google search turns up several articles showing the cause of the financial crisis boils down to information asymmetry: + Show Spoiler +This has now deviated off the topic of this thread. 1) I didn't ask for empircal evidence. I asked for empircal studies. Thats not being a hyprocit. People (like you i believe) has constantly claimed how the austrian school has been prooved wrong by history - By what studies I ask? Then I receive no answer. 2) Thats not free markets. Free markets = well defined property rights. Why aren'y you responding to what I have (now said) twice in this debate? 3) We already had this discussion previously. Health care sector = NOt even close to "free". Private sector = Not even close to free. I argued for that in the rep. thread, but (apparently) you didn't understand the implicaitons of it, and why financial instruments don't need government regulations. But I feel like I am wasting too much time repeating my self again and again. If you want to have a serious discussion then try to understand the austrian school and what free market implies (by actually reading my posts or doing other kind of research). So unless you show me that you actually understand the Austrian business cycle theory, but just do not understand why financial instruments isn't gonna be a problem (in a free market), then I will gladly explain it.
you speaking about what Gesell wrote about ? keyword : circulation fee ?
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On February 11 2012 00:49 Hider wrote:Show nested quote +On February 11 2012 00:39 paralleluniverse wrote:On February 11 2012 00:05 Hider wrote:On February 10 2012 21:37 paralleluniverse wrote:On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider 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:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry Your posts usually has a higher quality. This is pretty dissapointing. 1) No reason to shit on other people with a different opinion than you. 2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis? I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link). 3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well". This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights). A bit hypocritical for an Austrian to be asking for empirical evidence. The world is full of examples of information asymmetry, e.g. health insurance, selling financial derivatives, etc. Stieglitz won a Nobel Prize for showing that free markets are always inefficient because of information asymmetry, which is why regulation is needed to correct for it. Putting your faith in free markets is foolish, the idea is fundamentally flawed because of information asymmetry. In fact, a quick google search turns up several articles showing the cause of the financial crisis boils down to information asymmetry: + Show Spoiler +This has now deviated off the topic of this thread. 1) I didn't ask for empircal evidence. I asked for empircal studies. Thats not being a hyprocit. People (like you i believe) has constantly claimed how the austrian school has been prooved wrong by history - By what studies I ask? Then I receive no answer. 2) Thats not free markets. Free markets = well defined property rights. Why aren'y you responding to what I have (now said) twice in this debate? 3) We already had this discussion previously. Health care sector = NOt even close to "free". Private sector = Not even close to free. I argued for that in the rep. thread, but (apparently) you didn't understand the implicaitons of it, and why financial instruments don't need government regulations. But I feel like I am wasting too much time repeating my self again and again. If you want to have a serious discussion then try to understand the austrian school and what free market implies (by actually reading my posts or doing other kind of research). So unless you show me that you actually understand the Austrian business cycle theory, but just do not understand why financial instruments isn't gonna be a problem (in a free market), then I will gladly explain it.
Your argument is ridiculous.
1. To fix the crisis let's implement Austrian policies, like cutting government spending.
2, Then your policies inevitably fails, increases unemployment, reduces growth, perpetuates human misery, etc.
3. Now blame the failure of your policies on it not being a free market in the first place.
Very helpful.
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i dont understand how this works, basically every german citizen payed over 500 euro to secure other states finances and now the other countries are angry with germany and its politically isolated because germany doesnt want them to waste even more money and really go bankrupt.
So confusing.
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On February 11 2012 03:30 LaNague wrote:
i dont understand how this works, basically every german citizen payed over 500 euro to secure other states finances and now the other countries are angry with germany and its politically isolated because germany doesnt want them to waste even more money and really go bankrupt.
So confusing.
Germany wants to establish a future financial hegemony in Europe with lending which is why you are paying money, and the reason other states are mad is because Merkel's bundestag won't allow her to loan money without questionable austerity measures attached to it.
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On February 11 2012 01:06 paralleluniverse wrote:Show nested quote +On February 11 2012 00:49 Hider wrote:On February 11 2012 00:39 paralleluniverse wrote:On February 11 2012 00:05 Hider wrote:On February 10 2012 21:37 paralleluniverse wrote:On February 09 2012 23:21 Hider wrote:On February 09 2012 09:51 Sub40APM wrote:On February 09 2012 09:49 Hider wrote:On February 09 2012 09:37 Skilledblob wrote:On February 09 2012 09:31 Probulous wrote:
[quote]
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. Your right sorry. I misrepresented your view. But something I don't get is, why 5-10 years? Do keynesians have any empircal proof that it takes that long with laizzes-faire politics (and no great depression was no laizzes-faire). Your faith in Laissez-faire has reached levels surpassing religious fundamentalism. http://en.wikipedia.org/wiki/Stiglitz#Information_asymmetry Your posts usually has a higher quality. This is pretty dissapointing. 1) No reason to shit on other people with a different opinion than you. 2) Stiglitz doesn't have any empirical evidence on laizzes faire politics after an economic crisis? I would suspect that in order to analyze that, you would have to study the crisis of the early 20th century and 19th century Some years ago I myself read about some of these crisis, and they were supporting my hypothesis, but of course, i could be biased, so I asked you if you had any other empirical studies (and you respond with an irrelevant link). 3) I suspect you wanted to disproof free markets with the following quote: "Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well". This is basic economics. Of course its a problem. But if you read (and understood) my prev. posts, then you would have realized that the problem was lack of well defined property rights (if rights are well defined, then you can sue people for violating your rights). A bit hypocritical for an Austrian to be asking for empirical evidence. The world is full of examples of information asymmetry, e.g. health insurance, selling financial derivatives, etc. Stieglitz won a Nobel Prize for showing that free markets are always inefficient because of information asymmetry, which is why regulation is needed to correct for it. Putting your faith in free markets is foolish, the idea is fundamentally flawed because of information asymmetry. In fact, a quick google search turns up several articles showing the cause of the financial crisis boils down to information asymmetry: + Show Spoiler +This has now deviated off the topic of this thread. 1) I didn't ask for empircal evidence. I asked for empircal studies. Thats not being a hyprocit. People (like you i believe) has constantly claimed how the austrian school has been prooved wrong by history - By what studies I ask? Then I receive no answer. 2) Thats not free markets. Free markets = well defined property rights. Why aren'y you responding to what I have (now said) twice in this debate? 3) We already had this discussion previously. Health care sector = NOt even close to "free". Private sector = Not even close to free. I argued for that in the rep. thread, but (apparently) you didn't understand the implicaitons of it, and why financial instruments don't need government regulations. But I feel like I am wasting too much time repeating my self again and again. If you want to have a serious discussion then try to understand the austrian school and what free market implies (by actually reading my posts or doing other kind of research). So unless you show me that you actually understand the Austrian business cycle theory, but just do not understand why financial instruments isn't gonna be a problem (in a free market), then I will gladly explain it. Your argument is ridiculous. 1. To fix the crisis let's implement Austrian policies, like cutting government spending. 2, Then your policies inevitably fails, increases unemployment, reduces growth, perpetuates human misery, etc. 3. Now blame the failure of your policies on it not being a free market in the first place. Very helpful.
Keynesian logic:
1. Too much spending in a country? NP. Keynesians know a easy way out: Spend more!
2. Wait for employment to rise.
3: The rise in employment unfortunately doesn't seem to be constant
4. Argue that governements didn't spend enough.
5. Argue that governments that interfered in basicially every way in the economy (and fails) prooves that austrian school has been empirical rejected.
Please stop with these kind of arguments. They go nowhere.
From your post I realize that you still don't get the austrian school. Your are allowed to have your opinion, but why do you feel obligated to criticize something you don't understand?
Regarding Stiglitz. His analysis is based on asumptions that doesn't make sense. (LIke he argues that private actors try to maximize, yet they don't take externatilities into account + Governemnt has godlike knowledge).
Anyway you can read more about why free markets actually can exist and work:
http://mises.org/daily/2301
Here is a quote:
Logically, within the model's confines, the government is either a creature of the other economic actors (households and firms) or it is not. If it is an institution created and run by the household and firm sectors to rationalize externalities, then (assuming that it can and will do this and that it is the optimal means of doing this), we actually are not dealing with government at all in the usual sense of the word. We are dealing with a voluntary means of negotiating exchanges, a kind of a market, and we are not dealing with coerced taxes.
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Believing free markets don't work is as idiotic as saying squats are bad for you.
In both cases, you can see that people who use/do them live considerably better than their counterparts, yet people invent X or Y excuse to why it doesn't work, or point out the 1 in 50 cases where they don't help.
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EPT
