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Old 07-07-2015, 07:19 PM   #441
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That was and continues to be the national debate at this time.

Around the time of the financial crisis, there was discussions about the federal govt. accounting for 1/5 to 1/4 of GDP.

With the fiscal cliff and national debt limit crises, it's probably less now. For a couple of years, job growth numbers each month were lowered by the fiscal drag of local, state and federal jobs being shed.

Not sure if that's still the case but govt. jobs are counted in those numbers.

Of course a lot of people believe it's all too much. Some want the govt. only to provide national defense and nothing else.
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Old 07-07-2015, 07:24 PM   #442
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... Some want the govt. only to provide national defense and nothing else.
Yes, there are nut cases who believe that.

I think most people are like myself who like for us to have rangers to patrol and to protect our national forests and parks, for meat inspectors to be sure we will not die of salmonella, etc...

So, how far do we go? That's a trillion dollar question.

I guess if your GDP goes straight up, yet you also run a huge trade deficit because you do not produce the goods that you need, that should tell you something.
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Old 07-07-2015, 08:15 PM   #443
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Greece is on course to have the worst peacetime depression of developed countries in recent history, and it is largely due to the punitive measures imposed by the EU in the wake of the financial crisis. And lots of suffering -- unemployment is at 25% and youth unemployment is at 50%.
Sure, but that's not the root cause. IMO the root cause is simply decades of fiscal mismanagement coming home to roost.
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Old 07-07-2015, 09:35 PM   #444
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Come on, folks. When you are trying to get out of financial hardship, what do you do? You throw away the credit cards. You cut your budget. You get a part time job. You do things to get out of the financial disaster. You don't need to be told by others on how to tighten your belt. Greek is lucky to have allies to loan more money. If it were you who are already in heavy debt, no bank is going to loan you more money. And as a head of family, you will make the decisions on how to tighten the belt. You won't ask your child to vote for or against it.
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Old 07-07-2015, 10:08 PM   #445
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Come on, folks. When you are trying to get out of financial hardship, what do you do? You throw away the credit cards. You cut your budget. You get a part time job. You do things to get out of the financial disaster. You don't need to be told by others on how to tighten your belt. Greek is lucky to have allies to loan more money. If it were you who are already in heavy debt, no bank is going to loan you more money. And as a head of family, you will make the decisions on how to tighten the belt. You won't ask your child to vote for or against it.
No, that's what you do if you're an individual, not what you do as a country. If you're a country and you're in a deflationary spiral then 1) your amount of debt increases with deflation and 2) the more the government cuts back on spending confidence falls, people slow down spending, and deflation increases. It really is different, and that's just textbook macroeconomics.

Don't believe me? Here's some data (a bit dated, from 2009-2012) that shows the effect of austerity on growth (from Paul Krugman via the IMF; x-axis is a measure of austerity, y-axis is growth, more details at http://krugman.blogs.nytimes.com/201...ty-europe-2/):

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Old 07-07-2015, 11:07 PM   #446
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Not much sympathy here for Greece, and lots of cultural stereotyping about how Greeks lack fiscal discipline, etc. But those of you who have that view might want to take a look at this graph:



Now, go back and determine what the REAL GDP would have been if not for the huge deficit spending they were doing from 02 to 08.... then avg it out...


The GDP today is right in line with where Greece would have been if not for the increase due to all that extra spending... they are retracting to get back to their mean line.... nothing more....
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Old 07-07-2015, 11:14 PM   #447
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No, that's what you do if you're an individual, not what you do as a country. If you're a country and you're in a deflationary spiral then 1) your amount of debt increases with deflation and 2) the more the government cuts back on spending confidence falls, people slow down spending, and deflation increases. It really is different, and that's just textbook macroeconomics.

Don't believe me? Here's some data (a bit dated, from 2009-2012) that shows the effect of austerity on growth (from Paul Krugman via the IMF; x-axis is a measure of austerity, y-axis is growth, more details at http://krugman.blogs.nytimes.com/201...ty-europe-2/):


I do not understand the graph and the link does not work...


My next question would be... why is Greece so far from the rest of the group who seem to have been able to do austerity right? It is not austerity that is the problem as the other countries have proven.... so there is something else that has made Greece the outlier that is not on this graph....
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Old 07-07-2015, 11:20 PM   #448
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I do not understand the graph and the link does not work...


My next question would be... why is Greece so far from the rest of the group who seem to have been able to do austerity right? It is not austerity that is the problem as the other countries have proven.... so there is something else that has made Greece the outlier that is not on this graph....
Sorry, here's the correct link: http://krugman.blogs.nytimes.com//20...rity-europe-2/

The x axis is the level of austerity. The further to the right you go, the more austerity. The y axis shows how much growth there was from 2009-2012. Greece is so far from the rest of the group because the EU imposed extremely severe austerity as a precondition to the 2010 and 2012 bailouts. But, as the graph shows, this was a self-defeating proposition for EU bureaucrats, since the austerity made it even more unlikely that Greece would be able to make good with its creditors. This is something that many mainstream economists agree with, BTW.
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Old 07-08-2015, 12:21 AM   #449
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No, that's what you do if you're an individual, not what you do as a country. If you're a country and you're in a deflationary ....
I was referring to people's attitude. I don't see it from the Greeks.
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Old 07-08-2015, 12:27 AM   #450
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I was referring to people's attitude. I don't see it from the Greeks.
I think that 25% unemployment along with a 25% GDP drop (pretty close to the US Great Depression) is a pretty tight belt for the Greeks. They're hardly living the high life these days.
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Old 07-08-2015, 07:19 AM   #451
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Sorry, here's the correct link: http://krugman.blogs.nytimes.com//20...rity-europe-2/

The x axis is the level of austerity. The further to the right you go, the more austerity. The y axis shows how much growth there was from 2009-2012. Greece is so far from the rest of the group because the EU imposed extremely severe austerity as a precondition to the 2010 and 2012 bailouts. But, as the graph shows, this was a self-defeating proposition for EU bureaucrats, since the austerity made it even more unlikely that Greece would be able to make good with its creditors. This is something that many mainstream economists agree with, BTW.

Had to look for it, but found it....






Your argument is that it is horrible, but I say that you are looking at the red line....

I say it was due to unsustainable spending when they joined the Euro, with is the yellow line...

The problem is there was no way for them to keep at a false high level... the major decline is not due to austerity per se, but due to the heady levels they went up to with their unsustainable spending...


They have now adjusted back to their mean level.... and if the current gvmt had not insisted on keeping on keeping on they would have been growing.... I could be wrong, but I think that prior to Jan the Greek economy was growing again... now it will decline much further no matter what happens... with or without a bailout the Greek people are going to be worse off going forward than they would have if this gvmt never came to power...

Oh... and by the way, it was the Greek people who voted them in.... and also the Greek people who voted NO to the help...
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Old 07-08-2015, 08:04 AM   #452
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Get 'em while they are hot! Three year Greek government bonds are now yielding 52.7%. Backed by the full faith and credit of a sovereign government, nothing to fear there. This model denominated in frumpy old euros, reportedly a new model is in the works denominated in something more exciting.

All those carping on about the fiscal discipline of the Greek government, here's your chance to do well by doing good.
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Old 07-08-2015, 08:07 AM   #453
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If Greece just improved tax compliance .....



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The first, uncollected tax receipts, shows that Germany has had almost no problem when it comes to taxpayers paying their bills due to the government, while Greece has had an unparalleled challenge. Germany has fewer outstanding tax debts than any other country in Europe, while Greece has more than any other. That difference not only helps Germany enjoy a far more fiscally sound position than Greece, but it offers a stark contrast between a disciplined government and one that historically has been hardly disciplined.
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Old 07-08-2015, 08:41 AM   #454
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Meanwhile, it is going deeper to hell.

While Tsipras and his cronies play games, confidence is lost everywhere.

Would you want to take a trip to Greece this summer?

Would you want to open a remote office location?

Etc. Stop playing games. The crater is just getting deeper.
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Old 07-08-2015, 09:23 AM   #455
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Per person dollars of Government Debt.
From Bloomberg...2014 numbers.

United States $58,604
Greece $38,444

Most Government Debt per Person: Countries - Bloomberg Best (and Worst)
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Old 07-08-2015, 09:58 AM   #456
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Per person dollars of Government Debt.
From Bloomberg...2014 numbers.

United States $58,604
Greece $38,444
Ah statistics. Gotta love'em.

More stats:

General government gross debt as a percentage of GDP in 2014 (same source)

United States: 107%
Greece: 174%

Not that I like the current US debt situation or believe that it's sustainable. But it's a different kettle of fish than Greece.
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Old 07-08-2015, 10:06 AM   #457
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Per person dollars of Government Debt.
From Bloomberg...2014 numbers.

United States $58,604
Greece $38,444

Most Government Debt per Person: Countries - Bloomberg Best (and Worst)

You can't compare United States to Greece.

How many aircraft carriers does Greece have?
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Old 07-08-2015, 10:26 AM   #458
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Ah statistics. Gotta love'em.

More stats:

General government gross debt as a percentage of GDP in 2014 (same source)

United States: 107%
Greece: 174%

Not that I like the current US debt situation or believe that it's sustainable. But it's a different kettle of fish than Greece.
+1. And, in a pinch, the US can print money to make those debt payments (Lenders: Surprise! You're getting paid in slightly diminished dollars.). Greece, while in the eurozone, doesn't have that option. Soon they may have that option again, at least for debts denominated in "new drachmas". They'll have to offer a heck of an interest rate.
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Old 07-08-2015, 11:20 AM   #459
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I was listening to TV this morning and they were talking about the China meltdown...

Someone mentioned Greece and the talking head said that the Chinese economy is growing at a rate of a 'new Greece' every 6 weeks...

Kinda shows how insignificant Greece is in the world economy....
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Old 07-08-2015, 11:31 AM   #460
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Hot off the press http://www.ft.com/intl/cms/s/0/d4e3b...#axzz3fFE1bBTG
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Greece formally requested a new three-year bailout from the eurozone’s rescue fund and promised to implement pension and tax reforms as early as next week as it sought to convince creditors it was serious about a deal.
The Greek communication is here http://blogs.ft.com/brusselsblog/fil...-July-2015.pdf

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