Why is Greece Bankrupt and in a crisis?

[smokedog]

I hearing conflicting stories. I heard/read that it was because of socialism and that they a so-called social 'luxurious" lifestyle(early retirement,etc.). However, i recently watched a interview with some Greek citizens and they are saying, and i quote "all this crisis, is the result of the capitalist system"

Any ideas? Or anyone hearing something similar or different?

[Go4Long]

Read this book:
http://www.chapters.indigo.ca/books/Boomerang-Michael-Lewis/9780393081817-item.html?cookieCheck=1

very good read

[01RedDX]

.

[JRSC00LUDE]

I honestly haven't informed myself to any valid degree on that topic but, I can say this - Socialists believe capitalism is responsible for any and every bad thing in the world. Hell, communists likely think capitalism is the financial spawn of Satan himself.

[Modelexis]

"all this crisis, is the result of the capitalist system"

This is not a conclusion or any sort of alternate story or theory, this is a misunderstanding of economics and the fundamentals of how the world works.

[ExtraSlow]

Here's the coles notes:
- Greek government has spent more than it earned for many decades.
- A huge percentage of the population works for the government
- Almost nobody in Greece pays taxes, even the tax collectors or other government employees, there is no enforcement
- Any money the government does collect is lost to corruption
-Greek government can't afford to pay back the money it borrowed (bonds)
- Nobody will lend Greece money because they know it won't be paid back
- Government can't afford to pay anyone

[supe]

I am also very interested in this topic.

My economist friend told me that other governments in this situation could just print more money as a temporary solution which obviously has longer term ramifications, but because Greece is part of the EU this can't happen.

[Modelexis]

Originally posted by supe
I am also very interested in this topic.

My economist friend told me that other governments in this situation could just print more money as a temporary solution which obviously has longer term ramifications, but because Greece is part of the EU this can't happen.

Does your friend subscribe to the Keynesian or Austrian school of economics?

[chkolny541]

Originally posted by 01RedDX
Well, the Greeks are a hard working people who just want to work an honest two hours a day, three days a week, not pay any taxes and retire at 45 with 90% of their salary for the rest of their lives.
What's wrong with that?

this, lol.


They did this to themselves. Curious about the impact on the rest of the EU.

[kertejud2]

Originally posted by 01RedDX
Well, the Greeks are a hard working people who just want to work an honest two hours a day, three days a week, not pay any taxes and retire at 45 with 90% of their salary for the rest of their lives.
What's wrong with that?

Portugal, Italy, Greece and Spain: It's the Mediterranean Dream.

[Sugarphreak]

...

[Hakkola]

I wouldn't blame "socialism," the problem appears to be corruption, stupidity and maybe laziness.

[ragu]

1. Corruption
2. Poorly planned social payments, subsidies.
3. http://www.bbc.co.uk/news/world-europe-17108367

[ZenOps]

They ain't got no nickel.

They got a nation of singers and no more right wingers.

[Maybelater]

The obvious solution is to keep on giving them more money.

[Toma]

Originally posted by smokedog
I hearing conflicting stories. I heard/read that it was because of socialism and that they a so-called social 'luxurious" lifestyle(early retirement,etc.). However, i recently watched a interview with some Greek citizens and they are saying, and i quote "all this crisis, is the result of the capitalist system"

Any ideas? Or anyone hearing something similar or different?

They are bankrupt for the same reasons all the other eurozone countries are (PIIGS, France, Germany is running a high debt ratio etc)

The Euro, and the central "planning" (ie by bankers), and the central bank of Europe.

Talk about an idiotic idea. They bundled "central banking, massive inflation" with "borderless travel" to sell it to the people.

I hope it dies, and I hope they default 100%

The civilians of greece should not have to pay for the greed of bankers.

Corporatism and central banking cannot survive, and are failed concepts.

[TKRIS]

"This American Life" did a fantastic show on this a few weeks ago. I'd suggest you dig that up. It's only an hour long radio show

[Abeo]

http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010

Long article, but if you read it all you'll get a better idea of how they got where they are now

[1barA4]

Originally posted by 01RedDX
Well, the Greeks are a hard working people who just want to work an honest two hours a day, three days a week, not pay any taxes and retire at 45 with 90% of their salary for the rest of their lives.
What's wrong with that?

Sig worthy. :)

[you&me]

Originally posted by 1barA4


Sig worthy. :)

Perhaps you should properly credit SNL then... DX isn't that whitty :D

[sputnik]

Originally posted by 01RedDX
Well, the Greeks are a hard working people who just want to work an honest two hours a day, three days a week, not pay any taxes and retire at 45 with 90% of their salary for the rest of their lives.
What's wrong with that?

:werd:

The only people who deny this fact and try and blame other factors are those that still believe in the socialist utopia.

pcgfqS5_nuY

Full doc available here (http://thepiratebay.se/torrent/7044651/Ch4_Go_Greek_for_a_Week_576p_x264_AAC_HDTV_).

[Toma]

Originally posted by sputnik


:werd:

The only people who deny this fact and try and blame other factors are those that still believe in the socialist utopia.


Bullshit.

If it was JUST Greece, then why the entire Union in trouble? France, Portugal, Italy, Spain, Ireland, Germany etc.

It's like looking at the US crisis and refusing to take into account the Federal Reserve and the roles of central banking, and lending "air" money out at interest.

The entire system is made out so that GROWTH is the only thing that can SUSTAIN the economy. What sense does that make? The world is not infinite, so how can we expect infinite growth?

It is also based on having a balanced or positive trade deficit. Well how in the fuck is that gonna happen in a modern world?

Duh.

Can't blame ordinary people for a faulty system.

[ZenOps]

I tells you what the problem is... Free money. Thats right, free money. That and the bankers actually thought that people would ever feel obligated to pay it back with or without interest.

I have no illusions that the $1 Trillion US student loan bubble will never be paid back. Do I really think that a student will actually be able to in reality pay every $100 accrued debt with 68 pounds of copper pennies - with four pounds of copper interest every year?

Hell no, that would be "reality" like actually producing wheat and bread - who wants that, lol.

You would be lucky to get a person who shuffles paper for six digits salaries on 35 years - Like Rob Anders. Get that whip out Rob! Make them students pay 68 pounds of copper for every $100 they owe. Zenops needs a monster box of nickels and silver.

[sputnik]

Originally posted by Toma


Bullshit.

If it was JUST Greece, then why the entire Union in trouble? France, Portugal, Italy, Spain, Ireland, Germany etc.

It's like looking at the US crisis and refusing to take into account the Federal Reserve and the roles of central banking, and lending "air" money out at interest.

The entire system is made out so that GROWTH is the only thing that can SUSTAIN the economy. What sense does that make? The world is not infinite, so how can we expect infinite growth?

It is also based on having a balanced or positive trade deficit. Well how in the fuck is that gonna happen in a modern world?

Duh.

Can't blame ordinary people for a faulty system.

Spain, France, Portugal and Italy are in the same boat for the same reasons. Just to a lesser extent. Italy has already had massive government cuts to ease the risk of default.

Why can't you blame ordinary people?

Greece (among other countries) have HUGE public sector payrolls with salaries far and above that of other EU countries. Not to mention the gratuitous perks, bonuses and retirement benefits.

People there have been living high off the hog with the government ignoring the balance sheet for decades. Now it is coming to bite them in the ass and it is time to take their medicine.

However, given your socialist bent I am not surprised where you lay the blame.

At the end of the day if you can't pay your bills you need to cut back. Blaming the FIAT money system or the central bank just makes you look ignorant to your own issues.

[Toma]

Originally posted by sputnik


Spain, France, Portugal and Italy are in the same boat for the same reasons. Just to a lesser extent. Italy has already had massive government cuts to ease the risk of default.

Why can't you blame ordinary people?

Greece (among other countries) have HUGE public sector payrolls with salaries far and above that of other EU countries. Not to mention the gratuitous perks, bonuses and retirement benefits.

People there have been living high off the hog with the government ignoring the balance sheet for decades. Now it is coming to bite them in the ass and it is time to take their medicine.

However, given your socialist bent I am not surprised where you lay the blame.

At the end of the day if you can't pay your bills you need to cut back. Blaming the FIAT money system or the central bank just makes you look ignorant to your own issues.

Ok. So if it's not the system.....

Can you explain how every country can have a positive trade deficit?

[Toma]

Let me simplify it for you. The system only works long term if every country in it exports more than they import.

Say you have a sport league with 10 teams. They all play each other. How can they ALL have more wins than losses?

[dimi]

Originally posted by Toma
Say you have a sport league with 10 teams. They all play each other. How can they ALL have more wins than losses?

Maybe if one of the teams (Greece) that lost to every other team gets kicked out of the league (EU)? :dunno: lol

[Toma]

Originally posted by dimi


Maybe if one of the teams (Greece) that lost to every other team gets kicked out of the league (EU)? :dunno: lol
That's not as silly as it sounds. Bleed every country dry, then kick em out. The one standing in the end is the winner. :poosie:

Not much of a "league" in the end though ;)

It is plain and simple built on a lie, and is unsustainable.

Ask yourselves these questions. Who hands out the "Euro" itself, how much do they hand out, to which country, how is the amount decided, at what interest rate, and then think about trade balances and repayment.

[TKRIS]

Greece is in trouble because they lied and manipulated their financial statistics in order to gain entry into the eurozone, then, the combination of the good-will awarded as being a eurozone member, as well as the apparently miraculous (and completely fictional, as it turns out) turn around of their economy, they were able to borrow huge sums of money that they couldn't possibly pay off.
Greece borrowed money off a lie. Now they expect the ECB to go against it's policies of mitigating inflation to bail them out, otherwise they'll take the whole system down with them.

The problem with the ECB/eurozone/euro idea is that, by clumping everyone together, it allowed a tiny, otherwise financially insignificant country like Greece to go WAY further into the hole than they ever could have gone on their own. If Greece hadn't been skewing their numbers, there's no way they'd have been let into the union, and there's no way they would have been able to borrow the amount of money they borrowed.

Greece is like a guy who works at 7-11, but figured out a way to make it look like he's the CEO of 7-11 when you check his credit score. He then went out and spent like he was the CEO, and consequently finds himself in a bit of a pickle. Now someone has to cover all the money he spent, and the only real option the ECB has is to make more money to cover his debt, devalueing their own money in the process.

[BananaFob]

Originally posted by TKRIS
Greece is in trouble because they lied and manipulated their financial statistics in order to gain entry into the eurozone, then, the combination of the good-will awarded as being a eurozone member, as well as the apparently miraculous (and completely fictional, as it turns out) turn around of their economy, they were able to borrow huge sums of money that they couldn't possibly pay off.
Greece borrowed money off a lie. Now they expect the ECB to go against it's policies of mitigating inflation to bail them out, otherwise they'll take the whole system down with them.

The problem with the ECB/eurozone/euro idea is that, by clumping everyone together, it allowed a tiny, otherwise financially insignificant country like Greece to go WAY further into the hole than they ever could have gone on their own. If Greece hadn't been skewing their numbers, there's no way they'd have been let into the union, and there's no way they would have been able to borrow the amount of money they borrowed.

Greece is like a guy who works at 7-11, but figured out a way to make it look like he's the CEO of 7-11 when you check his credit score. He then went out and spent like he was the CEO, and consequently finds himself in a bit of a pickle. Now someone has to cover all the money he spent, and the only real option the ECB has is to make more money to cover his debt, devalueing their own money in the process.

Very succinct summary of what actually happened.

[Hakkola]

Originally posted by Toma

Say you have a sport league with 10 teams. They all play each other. How can they ALL have more wins than losses?

Interleague play.

[HiTempguy1]

Yes, because 95% of Greeks avoiding/not paying their taxes is totally the fault of capitalism :facepalm:

[Graham_A_M]

Originally posted by TKRIS
Greece is in trouble because they lied and manipulated their financial statistics in order to gain entry into the eurozone, then, the combination of the good-will awarded as being a eurozone member, as well as the apparently miraculous (and completely fictional, as it turns out) turn around of their economy, they were able to borrow huge sums of money that they couldn't possibly pay off.
Greece borrowed money off a lie. Now they expect the ECB to go against it's policies of mitigating inflation to bail them out, otherwise they'll take the whole system down with them.

The problem with the ECB/eurozone/euro idea is that, by clumping everyone together, it allowed a tiny, otherwise financially insignificant country like Greece to go WAY further into the hole than they ever could have gone on their own. If Greece hadn't been skewing their numbers, there's no way they'd have been let into the union, and there's no way they would have been able to borrow the amount of money they borrowed.

Greece is like a guy who works at 7-11, but figured out a way to make it look like he's the CEO of 7-11 when you check his credit score. He then went out and spent like he was the CEO, and consequently finds himself in a bit of a pickle. Now someone has to cover all the money he spent, and the only real option the ECB has is to make more money to cover his debt, devalueing their own money in the process.

Very interesting. This thread has been quite an eye opener. I never took too much interest in exactly whats happening with Greece, but wow.... Im flat out amazed this went on as long as it did.

WTF were they thinking that would eventually happen? :facepalm:

[TKRIS]

Originally posted by Graham_A_M


Very interesting. This thread has been quite an eye opener. I never took too much interest in exactly whats happening with Greece, but wow.... Im flat out amazed this went on as long as it did.

WTF were they thinking that would eventually happen? :facepalm:

Look into what's happening to the guy the ECB sent in to sort their books out, because it gets better.

He's facing life in prison.

[max_boost]

Oh the drama bra

-8P3PPfq1pc&sns=fb

I'm scared. :( :cry:

[Toma]

Greeks owe 37 billion ($50 billion) in back taxes. Of that amount, 32 billion, is owed by corporations.....

Greece is in Debt by 600 billion.

So, I am confused again by the "blame the people" rhetoric.

[Toma]

Originally posted by max_boost


-8P3PPfq1pc&sns=fb



:thumbsup:

[jdmXSI]

Originally posted by max_boost
Oh the drama bra

-8P3PPfq1pc&sns=fb

I'm scared. :( :cry:

I know, I hope that this won't be the case but it wouldnt surprise me the least if it happens.

[max_boost]

Originally posted by jdmXSI


I know, I hope that this won't be the case but it wouldnt surprise me the least if it happens.

I got it off your feed and after watching it I was like :eek: :eek: :eek:

I think it's about time I get off my ass and learn how to hunt and gather. :nut:

[Beerking]

Holy Shit man!

If you need clarification on why Greece is where they are, than the world IS truly fucked.

Greece is the tip of the iceberg my friend. Study up because we are in time that will differ from any other economical standpoint in history. Things are about to get really chaotic.

Europe is in big trouble (Ireland is next, then spain, italy, france etc). China is taking a dump and the USA/Israel want to bomb the shit out of Iran because.....(well because they have nuke capability /sarc.)

Even my wife knows whats going on.

[Supa Dexta]

Originally posted by max_boost


I got it off your feed and after watching it I was like :eek: :eek: :eek:

I think it's about time I get off my ass and learn how to hunt and gather. :nut:

Come spend some time with me on the farm.. I'll work ya. Ill start you off easy for the first week or so, picking stones. :rofl:

[Q-TIP]

Toma, one reason we should always be expecting growth is because the world population continues to grow. You so quickly point out how everyone else is naive and how you know how the world really works, but your tone always comes across to me as a sort of desperate attempt to be taken seriously online.

[Maybelater]

Originally posted by Q-TIP
Toma, one reason we should always be expecting growth is because the world population continues to grow. You so quickly point out how everyone else is naive and how you know how the world really works, but your tone always comes across to me as a sort of desperate attempt to be taken seriously online.

That is a pretty narrow assessment.

Just people more people are alive doesn't mean we automatically have the jobs and resources to sustain these individuals. How can the human population grow indefinitely?

[clem24]

Originally posted by Maybelater


That is a pretty narrow assessment.

Just people more people are alive doesn't mean we automatically have the jobs and resources to sustain these individuals. How can the human population grow indefinitely?

Yes but right NOW the population is growing. Save your comment and repost when the population STOPS growing.

[ExtraSlow]

Resources are what constrain economic growth, NOT population.

[Maybelater]

Originally posted by clem24


Yes but right NOW the population is growing. Save your comment and repost when the population STOPS growing.

Just because population grows doesn't mean the economy does. Once those children become working adults there isn't magically going to be jobs waiting for them to fill, simply because they exist and need work. The economy FIRST has grow to make room for them, not the opposite.

For example if we decided to increase the population today by 100% and let 34'000'000 people in from around the world, we wouldn't double GDP, we would break down because majority of those people would not be able to fill a limited amount of available positions.

[Rarasaurus]

There would be double the demand for everything if population doubled. Businesses would grow and hire to supply that demand and then GDP would also rise.

I could agree if resources and space was a concern but in Canada it is not.

[Supa Dexta]

Some of you have a skewed view of things, even within this own country. Look at how many communities have been having kids for years that only grow up to leave to work in AB. So yes in AB's eyes there's an abundance of jobs and then people just show up to fill them, so were the jobs here first, or do more people make more jobs?..

But if all of these people stayed in their own home towns, you think the jobs would just appear because they stay there?

In a way they can, we had a Mennonite settlement start up not far from where I grew up.. Everyone of the men started their own business and are making a go of it, landscaping, farming, car wash..etc. But not everyone can do that, many people may be skilled, but don't have the skills to do a start up and make it work.

Some of those communities maintain a population, but most have been shrinking as the jobs dissapear.

[Maybelater]

Originally posted by Rarasaurus
There would be double the demand for everything if population doubled. Businesses would grow and hire to supply that demand and then GDP would also rise.

I could agree if resources and space was a concern but in Canada it is not.

Where did they get the money to buy goods?

[Hakkola]

Originally posted by Supa Dexta
so were the jobs here first, or do more people make more jobs?..

Why is that an "or" question? They can both be correct.

[Toma]

Originally posted by Rarasaurus
There would be double the demand for everything if population doubled. Businesses would grow and hire to supply that demand and then GDP would also rise.

I could agree if resources and space was a concern but in Canada it is not.
Depends where the population doubled.

An American consumes 33x more in a lifetime than a Chinese person.

Canada's population is actually shrinking if you removed immigration. Not sure on the US, I suspect it would be close to the same.

BTW, this is why we actually have war. We always attack countries with "nationailzed" resources and economies, and after we bomb them to the stoneage, we "open" their economies.

Instant new market and growth!

Of course, war (and hollywood), is another way to encourage growth. Gotta spread American "ideals", and "morality", so the rest of the world "wants" to become bigger consumers.

[Go4Long]

Originally posted by Toma
Canada's population is actually shrinking if you removed immigration. Not sure on the US, I suspect it would be close to the same.


Also:
-car sales are dropping if you only count cars not made in North America.
-American's are eating out less, if you don't count fast food.
- Mexican cartels don't move drugs to the states, if you only count legally.
- 100% of the population agrees with the F-35 purchase, if you only count lockheed martin employees
- Everyone believes that 9-11 was a conspiracy, if you only count complete fuckin lunatics
- Immigration is at it's highest point in recorded history, if you don't count 1906-1915 or 1956
- The fertility rate of canadians is at it's highest point in recorded history, if you don't count the data before 1995
- and there are no white people in North America, if you only count data from before 1000 CE

Anyone got any more facts they'd like to submit where you only take half of the data in to account?

[Q-TIP]

Now that I have a minute to finish my thought from a while back, perpetual economic growth has been not only fueled by a population explosion but that population explosion has been directly tied in Europe and North America with the radical advancement of technology.

We can now extract more from less in a shorter time than ever before in history. So until the population starts shrinking and technological advance grinds to a halt the world economy should continue to grow indefinitely. This does not mean that resources will be spread around the world fairly, and it also does not mean that some populations will grow faster than technology allows them to extract enough resources to meet their needs.

[lastlatvian]

http://www.youtube.com/watch?feature=player_embedded&v=U3xgAC0WiOo#!

link if emb doesn't work (http://youtu.be/U3xgAC0WiOo)

[Toma]

U3xgAC0WiOo

[Toma]

Originally posted by lastlatvian
http://www.youtube.com/watch?feature=player_embedded&v=U3xgAC0WiOo#!

link if emb doesn't work (http://youtu.be/U3xgAC0WiOo)

Nice Video.

Edit! EXCELLENT Video.

U3xgAC0WiOo

[drewb]

Originally posted by Maybelater


Where did they get the money to buy goods?

From working the new jobs that are created due to producers expectations of the increase in demand from population growth.

This scenario can be analyzed nicely with the Keynesian coordination business cycle model.