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Croatia just canceled the debts of its poorest citizens

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Re: Croatia just canceled the debts of its poorest citizens

#211
post #132

Earlier quoted context omitted.

Geesh. I'm no Greek and not fond of Syriza, but god damn, the brainwashing is strong here. a) fraud the state's accountings: True, but the difference was minimal (2.7% or so to 3.07%, and by fraud you mean they accounted for the expenses on arrival and not when ordering, not cook your books). Also, this was well known by all the other countries and none of them made a peep at the time b) get as many as you can before…

This post has no connection with reality, I have no clue why it's upvoted. a) Regarding the state accounting fraud: first of all, using the past tense ("was") is misleading. As of last year, Greece was still cooking its books[0]. It remains to be seen if they have actually stopped. You say the difference was minimal. When? When they brought in Georgiou to fix the Greek statistics service, the 2009 deficit was revised…

Ok, let me go point by point

a) you are right. I was only referring to the pre-euro accounting. Sorry if I didn't make myself clear.

b+c) I don't know the exact figure, but if I remember correctly, private loses were about 20% only.

"One estimate is that Greece actually subscribed to €156bn worth of new debt in order to get €206bn worth of old debt to be written off, meaning the trumpeted write-down of €110bn by the banks and others is more than double the true figure of €50bn that was truly written off. Taxpayers are now liable for more than 80% of Greece's debt.[219] James Mackintosh, Investment Editor at the Financial Times, noted a JPMorgan Chase estimate that "only €15bn of €410bn total 'aid' to Greece" actually went into the country's economy, the rest having been handed over to its creditors. " [1]

d) Yes, they can't 'force' any government to do as they say, but if they don't, they don't give them the money they need. They aren't open to negotiating at all. They want the gov. to sell profitable businesses and to reduce social spending. That is their 'sensible' way to deal with the issue. I don't have first hand experience of what they did in Greece, but if what they tried to do in Portugal is any indication, it was a loser's game from the start. They didn't care about economic recovery or sustainable growth. No, they were repo men trying to get as much of the money back as possible. Which is fine, it's their job and the countries accepted the money, but then, not for one second please tell me how these countries are lazy and spenders, and the damn hard worker Northern brethren has to act like a parent. Let's not forget Germany were one of the first countries to go over the 3% deficit target and got scot free through political pressure [2] [3]

[1] http://en.wikipedia.org/wiki/Greek_government-debt_crisis#An...

[2] http://www.theguardian.com/business/2003/nov/25/theeuro.poli... - sorry, its the guardian, but you can google other sources

[3] http://en.wikipedia.org/wiki/Stability_and_Growth_Pact#Refor...

Re: Croatia just canceled the debts of its poorest citizens

#212

Earlier quoted context omitted.

Well, yes, except for where not entirely or at all. [0] [0] http://www.npr.org/blogs/thetwo-way/2011/11/28/142854391/rep...

Could you explain more about what you mean? I don't understand what I am supposed to get out of your link (I see where it says banks profited from a program designed to help them profit, but I don't see anything about money they didn't pay back).

Well, I'm just going to rehash what's in the link, but the banks had already been "rescued" to the tune of $1.2 trillion, with a Fed guarantee of $7.77 trillion BEFORE Congress was lobbied for TARP.

The government made back a small portion of the total output to banks throughout the financial crisis, not close to 100%, and then proceeded to further deregulate since the bailout.

Re: Croatia just canceled the debts of its poorest citizens

#213
post #45

Hi, croat here. Just one detail, this year there will be elections in Croatia and current gov didn't do anything useful for our economy, so this is kind of popular measure. Don't get me wrong, it's always nice to help, but situation is little bit complicated, taxes are very high and in some way this is not fair to people that are paying everything. Also, there are huge number of people living and exploiting social me…

Don't apologize. Your English far outclasses my Croatian. Interesting, from what you write it seems as though Croatia is dominated by a two-party system, like here in the U.S. Is that true?

More like two leading blocks, system is multiparty with 116 (!) registered parties. http://en.wikipedia.org/wiki/List_of_political_parties_in_Cr...

Re: Croatia just canceled the debts of its poorest citizens

#214
post #45

Hi, croat here. Just one detail, this year there will be elections in Croatia and current gov didn't do anything useful for our economy, so this is kind of popular measure. Don't get me wrong, it's always nice to help, but situation is little bit complicated, taxes are very high and in some way this is not fair to people that are paying everything. Also, there are huge number of people living and exploiting social me…

These exact same words could come out of a Brazilian. Word by word. I don't know about Croatia, but in that case they are only half-truths. The idea that there are 'people who pay for everything' is usually misguided. There are the exploited, and the less exploited. Both pay in one way or another, and only a very small elite group is actually well off. You say "the situation is complicated" and "this is not fair", bu…

One way it could fail is by having a substantial portion of the same people back in a similar situation within a few years. I don't know how likely that is to happen.

Re: Croatia just canceled the debts of its poorest citizens

#215

> Among economists, the scheme is regarded as unprecedented and exceptional. Couldn't be further from the truth. In times past it was commonplace to cancel debts periodically. Moses and Hammurabi are just two examples off the top of my head.

Yes. I am not an economist but it troubles me that economists would be unawares (or claim to be unawares) about this aspect of the history of debt. As usual Wikipedia (the wise, the all-knowing) has a page[1] about it. Mass debt relief and forgiveness is unexceptional in history and certainly has precedent. Even as recently as the turn of the century (only a decade-and-a-half ago!) there was an international movement…

Coincidentally 2001, 2008 and 2015 are Debt relief "Shmita" years according to Abrahamic tradition. The Bible instruction is to provide debt relief to creditors every seven years. Putting my non-religious hat on, I wonder if this crept into the bible from ancient society's observations that human credit cycles last seven years.

Re: Croatia just canceled the debts of its poorest citizens

#216

Let's just look at the predictable consequences of this move: 1) Banks and other corporations will never lend money to poor people again. Full stop. If there is a chance that the government will write off that debt (effectively stealing future earnings from banks) for these loans, banks just won't issue them. Say goodbye to educational loans, healthcare loans, car loans. Say goodbye to home loans and mortgages. If yo…

> Let's just look at the predictable consequences...Banks and other corporations will never lend money to poor people again. Full stop.

I'd like to bet against that prediction. I suggest $100 to the winner's favorite charity at even odds? I predict that one year from now, I'll be able to find an example of a Croatian corporation having loaned money to a Croat with income below 1,250 kuna. My contact details are in my profile.

Re: Croatia just canceled the debts of its poorest citizens

#217

Earlier quoted context omitted.

Could you explain more about what you mean? I don't understand what I am supposed to get out of your link (I see where it says banks profited from a program designed to help them profit, but I don't see anything about money they didn't pay back).

Well, I'm just going to rehash what's in the link, but the banks had already been "rescued" to the tune of $1.2 trillion, with a Fed guarantee of $7.77 trillion BEFORE Congress was lobbied for TARP. The government made back a small portion of the total output to banks throughout the financial crisis, not close to 100%, and then proceeded to further deregulate since the bailout.

At least some of those big numbers are overnight loans that were granted in exchange for collateral (i.e., they were secured by some asset or another) and paid back the next day.

That doesn't meet 'not paid back'. You can probably call it unfair.

I don't know the timeline of it, but the fed published a bunch of the data on one of the facilities here:

http://www.federalreserve.gov/newsevents/reform_pdcf.htm

Note that on that page, it says All loans extended under this facility were repaid in full, with interest, in accordance with the terms of the facility.

The Bloomberg articles don't really talk about where the numbers come from, but I expect most of the other loans were similar, short term and secured by assets.

We've also gone beyond TARP here.

Re: Croatia just canceled the debts of its poorest citizens

#218

Earlier quoted context omitted.

Most people in the UK buy second hand cars, you can get them ridiculously cheap. The mandatory insurance can cost more than the car itself. And yes, less need as well.

It's complicated though. In the UK, for me, it's cheaper to buy and run a car than it is to use public transport. We used to use hire cars for special trips and use public transport for other things (for a time having no vehicle by choice); then we got a scooter (as a couple) to help with going out and doing shopping trips and such (definitely cheaper than getting taxis). Then work necessitated having a van, once you…

I can appreciate what you're saying, as the truth is that the cost of public transport varies wildly. I remember being surprised at how much better (cheaper, more frequent, higher quality buses) the bus service in Cardiff was compared to my home city (Bath). It's a bit of a lottery, not much you can do as (in my experience) it tends to be a single company that dominates the bus transport in an area.

Worth cycling home from work?

Re: Croatia just canceled the debts of its poorest citizens

#219
post #211

Earlier quoted context omitted.

This post has no connection with reality, I have no clue why it's upvoted. a) Regarding the state accounting fraud: first of all, using the past tense ("was") is misleading. As of last year, Greece was still cooking its books[0]. It remains to be seen if they have actually stopped. You say the difference was minimal. When? When they brought in Georgiou to fix the Greek statistics service, the 2009 deficit was revised…

Ok, let me go point by point a) you are right. I was only referring to the pre-euro accounting. Sorry if I didn't make myself clear. b+c) I don't know the exact figure, but if I remember correctly, private loses were about 20% only. "One estimate is that Greece actually subscribed to €156bn worth of new debt in order to get €206bn worth of old debt to be written off, meaning the trumpeted write-down of €110bn by the…

Would you be happy if the your country lend them your taxes money, knowing that they decide the loan terms, not knowing when and if they will pay you back?

I wouldnt.

Re: Croatia just canceled the debts of its poorest citizens

#220
post #45

Hi, croat here. Just one detail, this year there will be elections in Croatia and current gov didn't do anything useful for our economy, so this is kind of popular measure. Don't get me wrong, it's always nice to help, but situation is little bit complicated, taxes are very high and in some way this is not fair to people that are paying everything. Also, there are huge number of people living and exploiting social me…

These exact same words could come out of a Brazilian. Word by word. I don't know about Croatia, but in that case they are only half-truths. The idea that there are 'people who pay for everything' is usually misguided. There are the exploited, and the less exploited. Both pay in one way or another, and only a very small elite group is actually well off. You say "the situation is complicated" and "this is not fair", bu…

The obvious possible failure is that these people may find it hard to get credit in the future, as described in the last paragraph:

> Some economists, among them Baker, are skeptical whether the scheme will succeed: "I am not sure that this is the best way to help low-income people. If lenders think this can happen again they will charge very high interest rates to low-income borrowers," Baker said.

If you were a bank that had just been pressured into forgiving a bunch of loans, how likely would you be to make new loans to the same class of people?

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