The average Greek is working a full 40% longer than the average German • Hacker News Board

Re: The average Greek is working a full 40% longer than the average German

#111

Post by josh33 » Mon, May 14, 2012, 1:34 PM UTC

stevoski wrote: post #64

kamaal wrote: post #58

Earlier quoted context omitted.

Fine, I never said borrowing was wrong. I said borrowing without having means to pay back is wrong. You almost make it look as though Greece did nothing wrong in borrowing, but now Germany and alike are committing a huge sin in not bailing them out. UK, Italy and all those countries you mentioned might definitely have the same debt. But the situation there is different because those people have a way of paying their…

Spending more than you earn can sometimes be quite healthy, for an individual, for a company, and for an economy. It's called investment. An example: when you buy take a mortgage to buy a house several times your annual income, you've spent more than you earned. Typically you need two or three decades to pay off the extra money you spent.

That is called debt.

Re: The average Greek is working a full 40% longer than the average German

#112

Post by nickik » Mon, May 14, 2012, 1:50 PM UTC

anotherthrow wrote: post #50

arethuza wrote: post #42

Earlier quoted context omitted.

"How do we prevent individuals from spending recklessly?" How about not bailing out banks that insist on making poor loans?

That might be a start, but probably only if banks were suitably sized and regulated in the first place which wasn't the case this time. Better bank regulation / breaking up banks going forward seems more sensible.

I would look into Hisotry and Economic Theory befor you make such clames. Specially about the size of banks, the US had strong regulations on bank sizes for a long time (I dont know when the stoped exactlly) and that lead to a massiv amount of bank failure in the great depression. About 8000 Banks failed in the US, most of them single branch (this is in a system with a central bank), while you look at canada where you dont have a central bank (until 1935) you have only one bank failure.

The History shows that some of the banking system with less regulation (and sometimes not central bank) have shown to be much stronger. This is large subject if you are intressting look for "free banking".

The most comprehensive book on the subject is: The Theory of Free Banking: Money Supply under Competitive Note Issue by George Selgin

Download here: http://files.libertyfund.org/files/2307/Selgin_1544_EBk_v5.1...

It might be easier to just go to youtube and look for some videos.

The most importend thing is that you dont just bail out the banks, it dosn't matter what size they are.

Re: The average Greek is working a full 40% longer than the average German

#113

Post by nickik » Mon, May 14, 2012, 1:55 PM UTC

rmc wrote: post #74

kamaal wrote: post #4

Well BBC ran a show last night. And it did show the some reasons why Greece is such trouble today. It turns out people spent like crazy, far beyond their means. Things like electricians driving Porsche's and High End Mercedes cars. All of it imported from Germany. When a nation full of people with government included involves in such spending it is but other wise natural that they price for it later on. The anchor di…

Why spend more than what you can earn? Because you can generate more wealth than the interest costs you, and hence everyone can get wealthier. Government and people and companies have been borrowing money to spend on things for ages.

That is quite right and works for buissnesses, sometimes. Buissnesses are part of the market and they have competition. Government is a hole other thing, Government can creat wealth too, matters differ on how often that happens.

Specially in the last 10 year (or longer) most government didn't seam to be much of investing there money smartly.

Re: The average Greek is working a full 40% longer than the average German

#114

Post by damncabbage » Mon, May 14, 2012, 2:00 PM UTC

kamaal wrote: post #4

Well BBC ran a show last night. And it did show the some reasons why Greece is such trouble today. It turns out people spent like crazy, far beyond their means. Things like electricians driving Porsche's and High End Mercedes cars. All of it imported from Germany. When a nation full of people with government included involves in such spending it is but other wise natural that they price for it later on. The anchor di…

It also doesn't help that tax evasion is almost a national sport.

Re: The average Greek is working a full 40% longer than the average German

#115

Post by nickik » Mon, May 14, 2012, 2:01 PM UTC

cafard wrote: post #83

yequalsx wrote: post #78

Earlier quoted context omitted.

When a market is flooded with easy, cheap money distortions occur. Witness the housing excesses in the U.S. prior to 2008. This is a phenomenon of human nature. Excess credit inevitably leads to too many bad loans.

This stuff is cyclical. The deregulation of S&L rates in the 1980s led to huge problems.

I have studyed this stuff quite a bit. The deregulatian probebly had some effect but compaired with the effect the easy money had it was not that imprtend. There where other things like that the taxcode favers buying instead of renting. Asian saving lowered long term lones .....

Most importendly Fanny Mea and Fredy Mac could borrow cheap money from the Fed and went below equillibrium prices for a long time.

Re: The average Greek is working a full 40% longer than the average German

#116

Post by shrikant » Mon, May 14, 2012, 2:01 PM UTC

anotherthrow wrote: post #34

kamaal wrote: post #15

Earlier quoted context omitted.

Yes that's the documentary, Its a nice one to watch. What I realized about the entire chapter of Greece was that you can't blame the government and corporations for all the problems in the world. Sometimes we as individuals need to step back and think of our own financial future. Reckless spending on our behalf without planning for the future are disastrous. Savings and investments are important for our future. And w…

Two points: 1. I wouldn't think for a second that Michael Portillo is a reasonable unbiased analyst here. 2. How do we prevent individuals from spending recklessly? Seems like government is going to have to play a large part in that story. On (2), it's not an issue of blame, and personally I'm not interested so much in who to 'blame' - we're doing economics, not philosophical ethics. Rather it's an issue about what w…

> 2. How do we prevent individuals from spending recklessly? Seems like government is going to have to play a large part in that story.

The Reserve Bank of India (India's equivalent of the Federal Reserve) does this by encouraging saving in small ways.

In India, savings accounts are the default for retail individuals, not current/checking accounts. Most banks only permit you to open an interest-free current account as a business account. The small amount of interest earned in a savings account acts as some incentive to keep the money in it. I believe no overdrafts are permitted on savings accounts either, so easy credit in the form of spending more liquidity than you have becomes just a little more inaccessible.

Re: The average Greek is working a full 40% longer than the average German

#117

Post by factorial » Mon, May 14, 2012, 2:18 PM UTC

smcl wrote: post #37

kamaal wrote: post #17

Earlier quoted context omitted.

Although I agree that its wrong to say All Greeks are lazy, Its also true that they didn't manage their money well. Now I'm not too much of an economist. But I would be annoyed if my money is used to bail out somebody for mistakes they made.

German banks have substantial exposure in Greece and other troubled Eurozone countries, through bonds/loans. Those bailouts (and we're getting a little vague here) are often used to service these debts, allowing said banks to report a profit and pretend their investments were sound in the first place. Interesting that we rarely look at who lent Greece such vast quantities in the first place.

By "we" you are referring to the mainstream media, and those are in the business to deflect criticism from those alleged pillars of society like the big banks. Just think of how the "sovereignty crisis" came about: governments bail out the banks, and take no their debt. The next thing you know is that the CEOs of the big banks blame governments for their inability to handle money.

Re: The average Greek is working a full 40% longer than the average German

#118

Post by jakeonthemove » Mon, May 14, 2012, 2:29 PM UTC

Germans are known for their efficiency, not hard work. Besides, a rested worker is more productive than an overworked one. Germany has got it right.

Also, starting a business in Germany is much easier than in Greece - it's on par with the US and UK, while Greece is more restrictive for some reason...

Re: The average Greek is working a full 40% longer than the average German

#119

Post by hetman » Mon, May 14, 2012, 2:35 PM UTC

rmc wrote: post #74

kamaal wrote: post #4

Well BBC ran a show last night. And it did show the some reasons why Greece is such trouble today. It turns out people spent like crazy, far beyond their means. Things like electricians driving Porsche's and High End Mercedes cars. All of it imported from Germany. When a nation full of people with government included involves in such spending it is but other wise natural that they price for it later on. The anchor di…

Why spend more than what you can earn? Because you can generate more wealth than the interest costs you, and hence everyone can get wealthier. Government and people and companies have been borrowing money to spend on things for ages.

I think there's a big difference in investing money in things that will generate more money, and spending it on luxuries that will only depreciate in value. I expect the parent was referring to the latter not the former.

Re: The average Greek is working a full 40% longer than the average German

#120

Post by [deleted] » Mon, May 14, 2012, 2:36 PM UTC

varjag wrote: post #40

zerostar07 wrote: post #21

Earlier quoted context omitted.

It was (and mostly still is) so easy to avoid taxes in Greece that it's fair to say the burden is on the government more than the people. I believe it's difficult to make people tax-conscious when they see that it's so easy for everyone around them to steal. The tax authorities here are corrupt, underqualified, and have a very low rate of tax collection. It's so bad that it had better be replaced altogether.

Greece is a democracy. The government is representative of its people.

[deleted]