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Thomas Piketty: “Germany has never repaid.”

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

#51

Post by Mikeb85 »

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…

> The whole thing is a ponzi scheme.

It absolutely is. If you think of money as units of labour instead of 'wealth', it makes more sense. Every year, more people are born, the workforce grows, more things are produced, more food is eaten, etc...

The money supply has to reflect that there's always more of everything. This means inflation. And it's not a bad thing.

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

#52

Post by vacri »

jsprogrammer wrote: post #41
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 forgiv…

> I think there should be a distinction between a country that kills and tortures millions and one that does not.

There isn't a major economy in the world that this does not describe. Perhaps not India. The "Race for Africa" was a low point for the UK and France, for example.

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

#53

Post by interesting_att »

Everyone here seems to be criticizing Piketty for weird reasons. He is not saying post-war Germany's debt is the exact same thing as the current Greek crisis. Pointing out parallels isn't same thing as saying two situations are equivalent.

His point is that this isn't a "moral" decision between two peoples. It's an economic decision between nations.

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

#54

Post by jqm »

minot wrote: post #28

The countries that were the Allied powers are in no position to call out Germany for not repaying its debts after the second world war because they originated from the way the Allied powers handled the money situation during and after the Great War. Look at this quote: > We cannot demand that new generations must pay for decades for the mistakes of their parents. The Greeks have, without a doubt, made big mistakes. U…

"> We cannot demand that new generations must pay for decades for the mistakes of their parents. The Greeks have, without a doubt, made big mistakes. Until 2009, the government in Athens forged its books. But despite this, the younger generation of Greeks carries no more responsibility for the mistakes of its elders than the younger generation of Germans did in the 1950s and 1960s."

Agree with your point. While the quote does have some merit, Germany had bottom up drastic structural change forced upon it before the "youth" were excused.

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

#55

Post by netcan »

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.…

EDIT: (I should have read to the end): I disagree with Pickety on his "maximum allowable budget" committee. It's an unnecessary violation of sovereignty, and I think that sovereignty is important.

If bankruptcy norms existed, they could create a market discipline. As government approached the intervention threshold, their bonds would decrease a little in value. Also in my governments-can-declare-bankrupcy world, this can happen a lot sooner and the defaults can be much smaller.

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

#56

Post by jsprogrammer »

vacri wrote: post #52
jsprogrammer wrote: post #41

Earlier quoted context omitted.

>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 forgiv…

> I think there should be a distinction between a country that kills and tortures millions and one that does not. There isn't a major economy in the world that this does not describe. Perhaps not India. The "Race for Africa" was a low point for the UK and France, for example.

Please list one instance when the modern Greek state did as described.

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

#57

Post by melling »

Mikeb85 wrote: post #39
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…

When Greece borrowed money, it was sustainable. Their GDP was growing, in large part because the European economy was growing before the crisis. When the European and world economy went down, it dragged Greece with them. The debt became unsustainable. Instead of the creditors losing out (much as an investor or normal creditor would when they invest in something that loses), the Europeans decided to bail out the initi…

I haven't followed Greece that closely but this story about Greece hiding its debt to gain entry into the Euro has been mentioned more than once:

http://www.nytimes.com/2010/02/14/business/global/14debt.htm...

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

#58

Post by ubernostrum »

felipeerias wrote: post #25

That argument gets thrown around a lot, but it is quite a terrible one. After WW2, the only Germany which acknowledged war and pre-war debts was the FDR. This was a state in ruins under foreign military occupation, with about half the territory and population of the former German state that had incurred those debts. If post-war Germany is your standard for debt relief, then Greece is still very, very far away from qu…

This was a state in ruins under foreign military occupation, with about half the territory and population of the former German state that had incurred those debts.

OK. So, the Greek government officials who ran up Greece's debt are responsible for that debt. The current government isn't, and in fact the current Greece is in economic ruin courtesy of years of "austerity" imposed forcefully by foreign powers.

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

#59

Post by HSO »

At the risk of being a moralizing bore, may I remind everybody that "Germany", "Greece" etc. are not people, and that people are not countries? I am surprised by the national coloring, however faint, of some comments here and there https://news.ycombinator.com/item?id=9834721. "I am a German" or "Greek here" should have no relevance to the ideas put forth. "Your money" and "your banks" are not really "my money" and "my banks" once I have paid the tax and don't own the bank!

The theory of complex systems reminds us that aggregates can have properties that are not traceable to any individuals themselves. Game theory tells us that incentives and constraints can get so messed up that developments take on an eigendynamic which was nobody's intent nor interest.

Please, be civilized and don't let yourselves be infected by nationalistic passions.

Your moralizing nanny...

(No seriously, I am starting to get concerned.)

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

#60

Post by spikels »

This guy may be pretty good with data collection but his ability to interpret anything is compromised by ideology. His early academic work was solid with only a bit of political bias but now that he is famous he feels compelled to opine about all sorts of things he barely understands so his politics shine through. This Q&A just confirms this trend.

I hope he realizes that he and other progressive economic pundits (Krugman, Stiglitz) are in part responsible for the disaster that is now unfolding in Greece.

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