Thomas Piketty: “Germany has never repaid.” • Hacker News Board

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

#181

Post by haberman » Mon, Jul 06, 2015, 3:04 AM UTC

cm2187 wrote: post #15

fiatjaf wrote: post #12

Earlier quoted context omitted.

It is not a Ponzi scheme if it is not always and necessarily growing.

Most western countries can't even afford paying the interest of their debt. So as it is, it is kinda necessarily growing. But the ponzi scheme aspect is rather the fact that countries can only pay back debt with new borrowing. If investors stop rolling their debt, even the US would collapse within a few months.

> Most western countries can't even afford paying the interest of their debt.

If that were true, the countries would be in default. And yet they are not.

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

#182

Post by jessaustin » Mon, Jul 06, 2015, 3:10 AM UTC

minot wrote: post #40

vruiz wrote: post #26

Earlier quoted context omitted.

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

Inflation is tax on the poor.

Inflation is a "tax" on those who have savings. In some cases (e.g. elderly retired) those who have savings are poor, but mostly if you have enough money left over after eating and keeping the lights on to save, you're not poor.

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

#183

Post by ForHackernews » Mon, Jul 06, 2015, 3:10 AM UTC

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…

So what you're saying is Greece needs to declare war on the rest of the Eurozone, and then lose badly?

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

#184

Post by craigyk » Mon, Jul 06, 2015, 3:25 AM UTC

luso_brazilian wrote: post #152

HSO wrote: post #59

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…

OK, I'll try to shed some light on why this subject tends to inflame some of the europeans nationalistic sentiment with a concrete example: 1. Meet Portugal (my country). Some may know us derisively as the P in PIGS because of our financial problems (much similar to the Greek one in nature and extent). In 2010 and 2011 as one of the 14 member states of the EU that were part of the Greek loan facility Portugal contrib…

No doubt you should be annoyed, but you should direct most of that ire at the troika than at Greece. The money that went to "bailout" Greece really made its way to EU lenders by way of Greece. A real bailout would have consisted of of policies and loans that went to rebuilding the Greek economy, not toward squeezing every last drop of tax revenue from the few Greeks who are still employed and pay taxes.

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

#185

Post by Dylan16807 » Mon, Jul 06, 2015, 3:29 AM UTC

cwp wrote: post #42

caskance wrote: post #38

Earlier quoted context omitted.

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.

Wha?

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

#186

Post by Daishiman » Mon, Jul 06, 2015, 3:30 AM UTC

yummyfajitas wrote: post #84

So I've been vaguely following the Greece and Puerto Rico situations (the Greece situation is causing me to put some trading strategies on hold), but there is something I don't understand about it. How come so many left wing advocates (Piketty, Krugman, etc) are coming out advocating for Greek bailouts?

Greek debt is literally impossible to pay as it is. They're not advocating default; they're advocating for the creditors to accept reality, write down their losses, and move on.

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

#187

Post by vacri » Mon, Jul 06, 2015, 3:30 AM UTC

Aloha wrote: post #169

vacri wrote: post #29

This guy is a reknowned economist? He's conflating "war reparations" with "external debt", and also seems to have missed the big fanfare recently when Germany paid the last of it's WWI reparations - instead he claims they never paid any WWI or WWII reparations. Similarly, 'England took 100 years to repay' he claims as the way forward, yet ignores that Germany took 92 to pay their WWI debt[1]. Not hard, I guess, since…

Germany was given a significant discount on its external debts in 1960, and very generous repayment terms. "The total under negotiation was 16 billion marks of debt resulting from the Treaty of Versailles after World War I which had not been paid in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the U.S., France and Britain. Another 16 b…

"Making 50% of the reparations" is considerably more than "never paid their debts", and while on favourable terms, we're also talking about half of Germany doing this - the country was torn in two, and was at the pointy end of the Cold War.

Forgiveness of some of the debt has also been part of the Greek proposals. It's not like debt forgiveness is unique to the German situation. Pretty much any time some entity is in risk of default, there'll be some degree of debt forgiveness; cue news stories of "creditors getting 30/50/70 cents on the dollar".

Keep in mind also that Germany underwent massive social changes as part of their recovery process - it certainly wasn't 'business-as-usual'. That Germany managed to do so well speaks to the industriousness of German culture, not that they were 'let off lightly'. If Greece gets handed money without significant reforms, what will be some fundamental social, political, or cultural differences between 2010 Greece and 2020 Greece?

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

#188

Post by Daishiman » Mon, Jul 06, 2015, 3:37 AM UTC

vacri wrote: post #29

This guy is a reknowned economist? He's conflating "war reparations" with "external debt", and also seems to have missed the big fanfare recently when Germany paid the last of it's WWI reparations - instead he claims they never paid any WWI or WWII reparations. Similarly, 'England took 100 years to repay' he claims as the way forward, yet ignores that Germany took 92 to pay their WWI debt[1]. Not hard, I guess, since…

Germany's reperations were cut subtantially from the baseline, and he did not claim what you are saying, at all.

You're exemplifying Dunning-Kruger at its maximum: critiquing a world-renowned economist who wrote an 900-page book on the state of income inequality of this century as someone who wouldn't be aware of the history of European debt relief. Get a grip.

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

#189

Post by craigyk » Mon, Jul 06, 2015, 3:40 AM UTC

muro wrote: post #168

jsprogrammer wrote: post #123

Earlier quoted context omitted.

I guess it's not clear what you're arguing then. It seemed as though you believe Greece's debt should not be forgiven. [Note: Germany paid less than half of its WWI reparations, until recently. I'm not sure what WWI debt you are referring to though.]

In "The Economic Consequences of the Peace", there is argument that the original reparations were make-believe and impossible. The 1929 revision was probably closer to reality and Germany did recently repay them. [at least according to news articles from 2010]

Germany was _forgiven_ over 50% of it's post war debts. By my rough calculation, 35B+ in today's dollars.

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

#190

Post by tcbawo » Mon, Jul 06, 2015, 3:40 AM UTC

ChuckMcM wrote: post #170

I wonder if this will end up being "The Interview" in Piketty's career. I realize it was translated but even so it seems the most inartful discussion of a complex subject by someone considered an expert that I've seen in a long while. I reminds me a bit of Linus Pauling's interviews about vitamins where he goes off the rails.

Historical context aside, he does have a good point in the end. Greece's credit card is maxed out and it doesn't appear that any amount of restructuring will make it possible to repay in full.