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Thomas Piketty: “Germany has never repaid.”

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Re: Thomas Piketty: “Germany has never repaid.”

#41

Post by jsprogrammer »

sgnelson wrote: post #21

This makes me lose respect for Piketty. There's a very clear difference between a country that comes out of two world wars, with everything all but destroyed, including millions dead. I'm sorry, no matter how bad 2008 was, it was no World War. His inability to grasp this just boggles the mind. There's a very big difference between war caused debt and economic caused debt (note that I'm basically making these two "deb…

>There's a very clear difference between a country that comes out of two world wars, with everything all but destroyed, including millions dead.

Which allows us to provide a further distinction: the country who had everything destroyed was directly responsible for that destruction. Yet, the debt that they racked up because they tried to take over eurasia while killing and torturing millions in the process, was forgiven not many years after the killings and torturings took place.

I think there should be a distinction between a country that kills and tortures millions and one that does not. So, why again should we forgive the debts of those responsible for killing and torturing millions, but not those of a country who has done nothing comparable?

Re: Thomas Piketty: “Germany has never repaid.”

#42

Post by cwp »

caskance wrote: post #38
obblekk wrote: post #10

There's one way in which Picketty is right: it's impossible to force a country to repay their debt. After WW1 France tried first through international (England) enforcement bodies, and then ultimately by occupation of the Ruhr valley (Germany's most productive region then). Both approaches failed. Eventually the Weimar inflated their currency until the French debt was worth nothing, workers in the Ruhr valley striked…

If you are willing to accept payment in land, it's quite easy.

You also have to be willing to kill all the people currently living on it.

Re: Thomas Piketty: “Germany has never repaid.”

#44

Post by adventured »

vruiz wrote: post #26
adventured wrote: post #13

"The second method is much faster. ... Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief." So Piketty is advocating a special tax on the poor. The group of people that can least deal with inflation, with no ability to shift assets or income to avoid it, nor deal with the increased cost of goods in relation to their debased incomes.

How do you go from "tax on private wealth" to "tax on the poor"?

Inflation always hits the non-rich the hardest. The rich have countless options for avoiding inflation. Those that are primarily wage dependent, do not.

This is why the wealth gap has expanded so much in the US the last 15 years: the abuse levied on the dollar. Take a look at how nearly every single thing priced in dollars zoomed after 2001, including the GDP of every nation on earth and commodities - all went up simultaneously, often dramatically, and all stopped going up simultaneously. That was the dollar losing value, aka the non-rich in America having their standard of living hammered, while the rich were able to shield themselves from the damage, leading to a vastly expanded wealth gap.

Re: Thomas Piketty: “Germany has never repaid.”

#45

Post by Spooky23 »

netcan wrote: post #34

It actually reads to me that he is saying something quite similar to what I have been thinking recently: countries go bankrupt, we need a bankruptcy court/procedure for governments. The US needs it for its bankrupt local governments. The EU needs it for member states. The rationale behind bankruptcy is this: if a borrower cannot repay their debts in full, the lender cannot receive them in full. This isn't negotiable.…

Sovereigns don't need bankruptcy protection, they just stop paying.

Somebody will always lend money to states, even poorly managed states. At the end of the day, three people with the most to lose are the richer countries of the world, because they are also in debt, and a sovereign default will screw up all of the debt models.

In the U.S., there is municipal bankruptcy. U.S. States cannot go bankrupt, which will be interesting when states run as poorly as Greece (ie Illinois) get hit by a tidal wave of retirement obligations.

Re: Thomas Piketty: “Germany has never repaid.”

#46

Post by cm2187 »

netcan wrote: post #34

It actually reads to me that he is saying something quite similar to what I have been thinking recently: countries go bankrupt, we need a bankruptcy court/procedure for governments. The US needs it for its bankrupt local governments. The EU needs it for member states. The rationale behind bankruptcy is this: if a borrower cannot repay their debts in full, the lender cannot receive them in full. This isn't negotiable.…

For a court to mean anything, you need an authority to enforce its decision. You would need some form of international army. Who would control it? Who will enforce a decision against Russia or China (or the US!).

Re: Thomas Piketty: “Germany has never repaid.”

#47

Post by Mikeb85 »

adventured wrote: post #13

"The second method is much faster. ... Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief." So Piketty is advocating a special tax on the poor. The group of people that can least deal with inflation, with no ability to shift assets or income to avoid it, nor deal with the increased cost of goods in relation to their debased incomes.

> The group of people that can least deal with inflation

Inflation in the cost of goods and services = wages go up. If you're involved in any economic activity beyond hoarding cash, inflation isn't a bad thing.

Re: Thomas Piketty: “Germany has never repaid.”

#48

Post by aikah »

sgnelson wrote: post #21

This makes me lose respect for Piketty. There's a very clear difference between a country that comes out of two world wars, with everything all but destroyed, including millions dead. I'm sorry, no matter how bad 2008 was, it was no World War. His inability to grasp this just boggles the mind. There's a very big difference between war caused debt and economic caused debt (note that I'm basically making these two "deb…

who started World War II ?

> There's a very big difference between war caused debt and economic caused debt

not if you started the very war that put you in debt.

Re: Thomas Piketty: “Germany has never repaid.”

#49

Post by coldtea »

sgnelson wrote: post #21

This makes me lose respect for Piketty. There's a very clear difference between a country that comes out of two world wars, with everything all but destroyed, including millions dead. I'm sorry, no matter how bad 2008 was, it was no World War. His inability to grasp this just boggles the mind. There's a very big difference between war caused debt and economic caused debt (note that I'm basically making these two "deb…

>This makes me lose respect for Piketty. There's a very clear difference between a country that comes out of two world wars, with everything all but destroyed, including millions dead.

Yes. The main difference being that Greece didn't invade anyone, didn't cause millions of deaths and didn't exterminate 6 million Jews.

Just over-borrowed. And it has paid for it with 5 years destruction of its economy (40-50% effective less buying power per person among other things and unemployment rates similar to the Weimar republic). Hey, Greece didn't even ask for its loans NOT to be repaid -- they just asked for a better deal, without heavy taxation and anti-business austerity measures that prevent development and make it even more impossible to reboot.

The idea that the first case is somehow more justified to relieve is ludicrous -- not to mention insulting to the victims of the Holocaust and WW.

[EDIT] Besides, the main historical reason Germany was "forgiven" wasn't that it had suffered losses too (war agressors have no right to complain about that), but because it suddenly was in the right place to serve as a nice Cold War ally, half to the West/NATO and half to the USSR, so both sides wanted it to be in good standing.

Re: Thomas Piketty: “Germany has never repaid.”

#50

Post by Spooky23 »

cm2187 wrote: post #3

If you believe Piketty, debt is never meant to be repaid and no one should therefore ever invest in sovereign debt. That would solve the debt debate. No creditor = no need to worry about whether we want to pile more debt. And he has a point. I personally don't believe that any of the US, Japanese and European sovereign debt will ever be repaid. The whole thing is a ponzi scheme. Investors hope that their investment w…

It's not a Ponzi scheme. As long as investors have confidence in the faith and credit of the debtor to meet the contract, we're good.

Otherwise, the debtor will just ship pallets of printed currency to the creditors.

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