121–130 of 350 posts
Earlier quoted context omitted.
Well, as part of their debt relief, Germany got a new government. Is that what Greece wants?
Greece has a new government. One that has no connection with either the thieves that caused the problem in the first place nor the incompetent idiots that didn't solve it in the last 5 years.
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?
I won't say the victims of predatory lending have a moral obligation to default, since this could get them killed. But in the absence of good government, this is the only way to drive predatory lenders out of existence.
And yes, good governance includes making life unprofitable for loan sharks.
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…
[Note: Germany paid less than half of its WWI reparations, until recently. I'm not sure what WWI debt you are referring to though.]
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…
Also, there is another gigantic difference here, Germany lost a bloody war and we told them how it was going to be, we restructured their economy, wholesale, and they were in no position to disagree. About half the debt was forgiven because they did what we made them do. If Greece wants to put their sovereignty on the table and let their creditors structure their economy for them, that's a very different negotiation than what they've had. Further, the west wanted a strong Germany between them and the communists, what's Greece got to bring to that table?
All this hypocrisy talk misses the point. Greece should go elsewhere to finance their debts if they don't like dealing with Germany. With their history, lifestyle, economy and government, I think that will be a challenge. Nothing prevents BRICs from investing there, they just don't seem that interested. Nations aren't individuals but try to go negotiate with a pawn shop or payday lending place, it sucks to need money and not have options. Sure, Germany has defaulted in the past, Greece can crap on then when the tables are reversed...
"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.
In theory, yes.
In practice, the poor also have higher job-switching costs (because of higher uncertainty that they'll find another one), which means their wages can be inflation-sticky upward as well.
Also, what little savings they have tends to be in cash and they find it harder to store it in inflation hedges.
>If you're involved in any economic activity beyond hoarding cash, inflation isn't a bad thing.
Hold on -- all usage of money involves some kind of hoarding, in the sense of "store money in liquid form for some unknown future need". But that's the entire freakin' point of money in the first place: that you don't have perfect knowledge of your future needs. (The coincidence of wants problem by itself doesn't include this -- far more important -- role of money.)
You can see this role during hyperinflation -- people are no longer able to indefinitely defer choosing where to spend their money, but must spend it immediately on something else that will hold some of its value or which sates a current need, and they bear a tremendous cost in having to choose this way.
Monetary policy must strike a balance between "no one spends ever" vs "everyone must spend now", and leaning toward one or the other bears some of the downsides of the extreme cases. Spending too soon and too late have their own costs. It's not as simple as "any storage/hoarding of money should be discouraged".
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.
Earlier quoted context omitted.
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…
West Germany did repay some of the defaulted WWI debt to help rebuild their reputation after they lost WWII. Also, there is another gigantic difference here, Germany lost a bloody war and we told them how it was going to be, we restructured their economy, wholesale, and they were in no position to disagree. About half the debt was forgiven because they did what we made them do. If Greece wants to put their sovereignt…
Continued loyalty to NATO and the EU? http://www.reuters.com/article/2015/07/03/eurozone-greece-ru...
I feel sorry for the Greek people, but I personally favour throwing them out of the Eurozone if they default on the debt. It will be a very dangerous signal to send that you can borrow money, and not pay it back without any retribution. This is particularly important since more countries are going in the same direction as Greece (I think Spain and Puerto Rico are close, but I might be wrong). Besides that, it also hu…
In a well regulated system, the people who make bad bets are not entitled to retribution. They are "entitled" (read: expected) to go out of business. At the very least, they suffer embarrassing losses that they must explain to their shareholders.
"Moral hazard", properly understood, is a term used to describe conditions that encourage reckless lenders. The threat of default is a good thing. That's what keeps otherwise rapacious lenders fearful enough to excercise good judgment and prudent restraint. Indeed, in advanced economies, the power of bankruptcy judges to wipe out debt is seens as an essential component of healthy capital markets. Bad lenders get wiped out, and take the money of their imprudent investors with them.
That's what should have happened to the private lenders who originated the Greek debt. Instead, they got bailed out by EZ members who are following up one bad choice with another in promising their electorates that they can collect from a nation manifestly unable to pay.
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…