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Thomas Piketty: “Germany has never repaid.”

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

#111

Post by dnautics »

hackuser wrote: post #88
nostromo wrote: post #63

Earlier quoted context omitted.

I'd draw a distinction between debts incurred by a democratically elected government and otherwise. I also think reparations are fundamentally different than loans. Comparing war reparations to loans is blurring the lines to make a political point.

> I'd draw a distinction between debts incurred by a democratically elected government and otherwise. I think that's a good point in principle, but remember that the Greece's poor suffer the most. Drive through a poor neighorhood in town and consider how much influence the residents have over national economic policy.

What makes you think they will be helped by loans if they are made to Greece? Won't those funds just go to a slightly different permutation of politically connected folks? Moreover, you point to the poor in Greece. Why should they be privileged over the slightly poorer in, say, Bulgaria, who will hear a fractional brunt of a Greek bailout?

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

#112

Post by TillE »

tedunangst wrote: post #89
tomp wrote: post #65

Earlier quoted context omitted.

The underlying assumption in the German "NO" to Greek pleas of debt relief is the "moral hazard" of writing off a country's debt just because they cried really hard. Why don't we talk about the moral hazard of writing off a country's debt after they kill 60 million people?

Well, as part of their debt relief, Germany got a new government. Is that what Greece wants?

This is the new government. They were not in charge in 2010, they did not cause the crisis.

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

#113

Post by mnglkhn2 »

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…

There's an argument to be made that the debt forgiveness came after the realization that maybe the WW2 was also a result of the crushing debt imposed on Germany after WW1.

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

#114

Post by alexqgb »

nostromo wrote: post #63
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'd draw a distinction between debts incurred by a democratically elected government and otherwise. I also think reparations are fundamentally different than loans. Comparing war reparations to loans is blurring the lines to make a political point.

Okay, but why are you doing backflips to avoid placing any blame on reckless creditors? If idiotic European governments elected to bail out the private, sub-prime lenders whose bets in Greece had gone bad (due, in large part, to the credit bubble inflated by the same lenders) why should the Greek people pay for a shitty decision made by French and German politicians?

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

#115

Post by schwarze_pest »

subpixel wrote: post #33
mrottenkolber wrote: post #7

The interviewer completely oversteps his boundaries here. In case anybody wonders: "Die Zeit" is Germany's tabloid version of a politics paper (similar in lack of quality to "Der Spiegel"). This interview illustrates whats wrong with these tabloids very clearly: Bias, ignorance and uneducated employees. Piketty brings up some good points but the interview is painful to read, like dragging a wet mattress up a stairwel…

DER SPIEGEL lacks quality? Would you care to back that up? It's one of the most respected publications in Europe, with excellent investigative reporting.

"Das ehemalige Nachrichtenmagazin aus Hamburg" has it's name for a reason.

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

#116

Post by tptacek »

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…

I'm also not clear on what Germany's payment history has to do with the crisis. The problem isn't simply that Greece is defaulting on loans, but that it's doing so while asking for more loans, without which it will be forced into austerity.

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

#117

Post by saool »

sgnelson wrote: post #73
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'll put it this way. World War I: Germany loses, is forced to pay not just debt, but reparations. Huge economic and political instability as a result leads to a new leadership which leads directly to World War II. World War II: Germany loses, is split up, due to the Marshall plan (in part do to a fear of Communism, so not solely due to compassion), West Germany given millions of dollars to rebuild, a rather thriving…

Probably the one where the country that is indebted and in need of development gets 60% of their debt forgiven and an stimulus plan.

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

#118

Post by NamTaf »

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.…

The only rational argument for 'a country MUST repay its debts!' that I can make is if it is being charged interest on those debts no higher than the CPI increase of that currency.

The whole point of interest in a loan is to cover 2 points: 1) The lost purchasing power of that money i.e.: the cost of inflation over the period of the debt, and 2) The priced-in risk that the loan will not be repaid in a small portion of cases. This is why unsecured debt attracts a higher interest rate than secured debt and is why all debt incurs a higher interest rate than inflation.

I don't understand why popular opinion towards debt seems to invert at some point. I'm sure if you asked these same people whether bankruptcy processes should be outlawed many would say no, but yet at some point between 'person' and 'nation state' their opinion changes without changing any of the inbuilt mechanisms for supporting that process (interest on a loan to price in risk).

It's a fascinating example of once you make something sufficiently faceless, peoples' views towards it changes. See also: politics towards social classes, etc.

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

#120

Post by jqm »

tomp wrote: post #65
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…

The underlying assumption in the German "NO" to Greek pleas of debt relief is the "moral hazard" of writing off a country's debt just because they cried really hard. Why don't we talk about the moral hazard of writing off a country's debt after they kill 60 million people?

From the perspective of lending, it doesn't matter if a borrower is church attender, a drug dealer, beats his kids, or goes to work half an hour early every day. It is simply a matter of perceived ability to repay.

Germany, especially after complete restructuring following the war was manifestly a decent credit risk. Greece is another story. The moral arguments in this scenario are just noise.

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