Can Italy, and thus the Euro, be Saved?

[Euro]

But I would think the most natural way would be for German companies to buy the goods that the new greek economy specializes in.

But regardless, its simple Saving-Investment model, dont you agree?

Greece is socialist. Becoming capitalist would be the best way to restore prosperity. Did you notice how well China has done following the tried and true Republican path? Greece needs to make unions illegal and eliminate anti-supply side business taxes so business will stop moving to Bulgaria, for starters.

There is a vast difference between being a socialist state with a socialist economy and having a socialist prime minister win one election. Does the state own the industries? No...

Swedens largest party is the Social Democratic Workers party. So why isnt swedens economy faltering and debt skyrocketing???

In Norway the largest party is the Labour party. Why are they doing fine???



Because its a trade problem!!!!!

Greecee was a socialist state but it’s not run by conservatives now. Greece is run by tenokrati (That means experts professors, engineers,economists not politicians) So they are politically neutral.

Sweden has since 2010 been runned by a majority coallition (blue block) that includes both swedish liberal party and conservative party cooperating. So the cons and libs cooperate in a coallition (blue block). The socialdemocrats have not run Sweden since 2010, and they didn’t do well high unemployment, debt....
Wiht the blue majority coalliton (blue block) in office the Swedish economy have grown more than any other EU economy. But the blue coalliton cosnsist of both libs and cons fighting together against the socialists (red block).

Norway has the same system with a red block(socialists) and blue block(cons+libs). Norway is run by a red majority coalliton red block(socialists) since 2005. But on the straw polls the blue coalliton has a clear lead and i’m sure their will be a change the next election with the blue coallition in office.

So the libs and cons cooperate and has a common enemy in the socialist parties to keep them out of office in the nordic countries. I think a third party like in UK (labour) could be good for US, that way the parties are forced to cooperate finding the good solutions not just fighting against each other.

 

[CrusaderFrank]

No, I'm waiting for you to explain how trade balances drive an economy.

Usually, trade imbalances are a symptom, not a cause. But they can be a cause because they can induce capital flight in the short-run. Negative trade balances are one of the first things macro traders screen for when looking to short a country.

In the long run, trade balances do not drive an economy.

You know I'm not completely unfamiliar with economics, but according to the Shrieking Liberal economist cbirch, these imbalances were a driver and a cause, and not an effect and I'm still waiting for him to explain it

 

[cbirch2]

No, I'm waiting for you to explain how trade balances drive an economy.

Usually, trade imbalances are a symptom, not a cause. But they can be a cause because they can induce capital flight in the short-run. Negative trade balances are one of the first things macro traders screen for when looking to short a country.

In the long run, trade balances do not drive an economy.

You know I'm not completely unfamiliar with economics, but according to the Shrieking Liberal economist cbirch, these imbalances were a driver and a cause, and not an effect and I'm still waiting for him to explain it

How many more times do i have to say it?

It was the abrupt stop in the flow of capital to greece in 2008!

Not a new phenomena, it caused a low of defaults in latin american 30 years ago as well.

Abrupt stop.

 

[Toro]

Usually, trade imbalances are a symptom, not a cause. But they can be a cause because they can induce capital flight in the short-run. Negative trade balances are one of the first things macro traders screen for when looking to short a country.

In the long run, trade balances do not drive an economy.

You know I'm not completely unfamiliar with economics, but according to the Shrieking Liberal economist cbirch, these imbalances were a driver and a cause, and not an effect and I'm still waiting for him to explain it

How many more times do i have to say it?

It was the abrupt stop in the flow of capital to greece in 2008!

Not a new phenomena, it caused a low of defaults in latin american 30 years ago as well.

Abrupt stop.

That's true. This is where "Reflexivity" comes in, where the effect becomes the cause.

However, the underlying structural imbalances in Greece resulted in a trade imbalance, not the other way around.

 

[CrusaderFrank]

Usually, trade imbalances are a symptom, not a cause. But they can be a cause because they can induce capital flight in the short-run. Negative trade balances are one of the first things macro traders screen for when looking to short a country.

In the long run, trade balances do not drive an economy.

You know I'm not completely unfamiliar with economics, but according to the Shrieking Liberal economist cbirch, these imbalances were a driver and a cause, and not an effect and I'm still waiting for him to explain it

How many more times do i have to say it?

It was the abrupt stop in the flow of capital to greece in 2008!

Not a new phenomena, it caused a low of defaults in latin american 30 years ago as well.

Abrupt stop.

And this capital of which you speak, it is mindless, how does it choose the direction in which it travels?

And now that, according to your chart, this capital seems to be headed back to Greece what does that mean? Is the Crisis solved?

 

[cbirch2]

I dont know how much more data i could throw at you. Greece was not a profilate spender. Not at all.

How could greece have been a profligate spender if it was spending less than the countries you consider to have been fiscally responsible?

How could greece have been a masssive welfare state if it was spending less per capita than any other euro country?

So why is greek in debt?

Greece couldnt collect revenues. It consistently collected significantly less revenue than the rest of europe.

Notice that greek revenue drops off a cliff. Its spending was average for the eurozone, but better than france, germany, denmark, finland, the netherlands.

If greek was such a massive spender, why did it spend less than the countries that are in very good shape?

 

[cbirch2]

You know I'm not completely unfamiliar with economics, but according to the Shrieking Liberal economist cbirch, these imbalances were a driver and a cause, and not an effect and I'm still waiting for him to explain it

How many more times do i have to say it?

It was the abrupt stop in the flow of capital to greece in 2008!

Not a new phenomena, it caused a low of defaults in latin american 30 years ago as well.

Abrupt stop.

That's true. This is where "Reflexivity" comes in, where the effect becomes the cause.

However, the underlying structural imbalances in Greece resulted in a trade imbalance, not the other way around.

Ok, yea. I'd agree that a trade imbalance is the result of a structural problem. But you arent really arguing that the government deficit is the structural problem...are you? Surely both the government deficit and the trade deficit are the result of structural economic problems; the trade deficit is just trend that might reflect the problem.

 

[cbirch2]

Well capital never ceased flowing to greece entirely...that would be a pretty unrealistic event. There was a sudden decrease in the amount of capital, goods, things, stuff, into greece. That decrease hasnt reversed. its just dropped down a lot and remained constant.

 

[Euro]

If greek was such a massive spender, why did it spend less than the countries that are in very good shape?

The problem in Greece is corruption, people that don’t pay their taxes. Their is a large black market that don’t pay taxes. Italy has the same problem, a large black market where people don’t pay taxes. Southern europe is prette much like mexico with large black markets that don’t pay taxes.

Germany has fewer companies than Italy but Germany has a much higher population. The problem is to many small company owners that don’t pay their taxes in Southern Europe. And large black markets. In northern europe you don’t have the large black markets that don’t pay taxes. That way the governments get their tax income.

 

[cbirch2]

If greek was such a massive spender, why did it spend less than the countries that are in very good shape?

The problem in Greece is corruption, people that don’t pay their taxes. Their is a large black market that don’t pay taxes. Italy has the same problem, a large black market where people don’t pay taxes. Southern europe is prette much like mexico with large black markets that don’t pay taxes.

Germany has fewer companies than Italy but Germany has a much higher population. The problem is to many small company owners that don’t pay their taxes in Southern Europe. And large black markets. In northern europe you don’t have the large black markets that don’t pay taxes. That way the governments get their tax income.

Exactly...

 

[JimBowie1958]

If greek was such a massive spender, why did it spend less than the countries that are in very good shape?

The problem in Greece is corruption, people that don’t pay their taxes. Their is a large black market that don’t pay taxes. Italy has the same problem, a large black market where people don’t pay taxes. Southern europe is prette much like mexico with large black markets that don’t pay taxes.

Germany has fewer companies than Italy but Germany has a much higher population. The problem is to many small company owners that don’t pay their taxes in Southern Europe. And large black markets. In northern europe you don’t have the large black markets that don’t pay taxes. That way the governments get their tax income.

Exactly...

While I agree with the above, that is not the total picture:
Greek government debt crisis - Wikipedia, the free encyclopedia

The Greek economy was one of the fastest growing in the eurozone from 2000 to 2007; during that period, it grew at an annual rate of 4.2% as foreign capital flooded the country.[5] A strong economy and falling bond yields allowed the government of Greece to run large structural deficits. According to an editorial published by the Greek right-wing newspaper Kathimerini, large public deficits are one of the features that have marked the Greek social model since the restoration of democracy in 1974. After the removal of the right-wing military junta, the government wanted to bring disenfranchised left-leaning portions of the population into the economic mainstream.[6] In order to do so, successive Greek governments have, among other things, customarily run large deficits to finance public sector jobs, pensions, and other social benefits.[7] Since 1993 the ratio of debt to GDP has remained above 100%.[8]

Initially currency devaluation helped finance the borrowing. After the introduction of the euro in Jan 2001, Greece was initially able to borrow due to the lower interest rates government bonds could command. The late-2000s financial crisis that began in 2007 had a particularly large effect on Greece. Two of the country's largest industries are tourism and shipping, and both were badly affected by the downturn with revenues falling 15% in 2009.[8]

To keep within the monetary union guidelines, the government of Greece had misreported the country's official economic statistics.[9][10] In the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001 for arranging transactions that hid the actual level of borrowing.[11] The purpose of these deals made by several successive Greek governments was to enable them to continue spending while hiding the actual deficit from the EU.[12]

In 2009, the government of George Papandreou revised its deficit from an estimated 6% (8% if a special tax for building irregularities were not to be applied) to 12.7%.[13] In May 2010, the Greek government deficit was estimated to be 13.6%[14] which is one of the highest in the world relative to GDP.[15] Greek government debt was estimated at €216 billion in January 2010.[16] Accumulated government debt was forecast, according to some estimates, to hit 120% of GDP in 2010.[17] The Greek government bond market relies on foreign investors, with some estimates suggesting that up to 70% of Greek government bonds are held externally.[18]

So the Greek governments official figures were deceptive and when the Big crunch hit the equities markets in late 2008, tourism dropped, all revenues dropped, less receipts came in and the deficits exploded.

Greece made itself particularly vulnerable to the 2008 crisis and got their proverbial wang caught in the liquidity trap door.

 

[Euro]

The problem in Greece is corruption, people that don’t pay their taxes. Their is a large black market that don’t pay taxes. Italy has the same problem, a large black market where people don’t pay taxes. Southern europe is prette much like mexico with large black markets that don’t pay taxes.

Germany has fewer companies than Italy but Germany has a much higher population. The problem is to many small company owners that don’t pay their taxes in Southern Europe. And large black markets. In northern europe you don’t have the large black markets that don’t pay taxes. That way the governments get their tax income.

Exactly...

While I agree with the above, that is not the total picture:
Greek government debt crisis - Wikipedia, the free encyclopedia

The Greek economy was one of the fastest growing in the eurozone from 2000 to 2007; during that period, it grew at an annual rate of 4.2% as foreign capital flooded the country.[5] A strong economy and falling bond yields allowed the government of Greece to run large structural deficits. According to an editorial published by the Greek right-wing newspaper Kathimerini, large public deficits are one of the features that have marked the Greek social model since the restoration of democracy in 1974. After the removal of the right-wing military junta, the government wanted to bring disenfranchised left-leaning portions of the population into the economic mainstream.[6] In order to do so, successive Greek governments have, among other things, customarily run large deficits to finance public sector jobs, pensions, and other social benefits.[7] Since 1993 the ratio of debt to GDP has remained above 100%.[8]

Initially currency devaluation helped finance the borrowing. After the introduction of the euro in Jan 2001, Greece was initially able to borrow due to the lower interest rates government bonds could command. The late-2000s financial crisis that began in 2007 had a particularly large effect on Greece. Two of the country's largest industries are tourism and shipping, and both were badly affected by the downturn with revenues falling 15% in 2009.[8]

To keep within the monetary union guidelines, the government of Greece had misreported the country's official economic statistics.[9][10] In the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001 for arranging transactions that hid the actual level of borrowing.[11] The purpose of these deals made by several successive Greek governments was to enable them to continue spending while hiding the actual deficit from the EU.[12]

In 2009, the government of George Papandreou revised its deficit from an estimated 6% (8% if a special tax for building irregularities were not to be applied) to 12.7%.[13] In May 2010, the Greek government deficit was estimated to be 13.6%[14] which is one of the highest in the world relative to GDP.[15] Greek government debt was estimated at €216 billion in January 2010.[16] Accumulated government debt was forecast, according to some estimates, to hit 120% of GDP in 2010.[17] The Greek government bond market relies on foreign investors, with some estimates suggesting that up to 70% of Greek government bonds are held externally.[18]

So the Greek governments official figures were deceptive and when the Big crunch hit the equities markets in late 2008, tourism dropped, all revenues dropped, less receipts came in and the deficits exploded.

Greece made itself particularly vulnerable to the 2008 crisis and got their proverbial wang caught in the liquidity trap door.

Yes good post.

The retiremnet age in Greece is also lower than in the rest of Europe. They can retire when 55 in Greece, Italy 57. In northern europe they can’t retire before they are 65. At the same time they live longer in southern europe giving them high pension costs. They also have a low fertility rate which means few young people and many old people.

So a small group of young people has to work to support a large group of old people. That way government spending will increase more and more, and then taxes will increase making the private sector less competitive by taxing them more and more.

Infrastructure is also bad making transport of both import and export goods expensive and that way they are not competitive.Germany has the autobahn system with no speed limit, that way they can transport goods in an effecitve way. So Hitler did something good when buidling the autobahn system in Germany.

 

[CrusaderFrank]

Cbrirch, you hysterical little monkey, are you saying that the governments need to spend more to address the "trade imbalance" which is the cause of the EU problems?

It's hard to understand you because the spittle flies when you talk

 

[CrusaderFrank]

If greek was such a massive spender, why did it spend less than the countries that are in very good shape?

The problem in Greece is corruption, people that don’t pay their taxes. Their is a large black market that don’t pay taxes. Italy has the same problem, a large black market where people don’t pay taxes. Southern europe is prette much like mexico with large black markets that don’t pay taxes.

Germany has fewer companies than Italy but Germany has a much higher population. The problem is to many small company owners that don’t pay their taxes in Southern Europe. And large black markets. In northern europe you don’t have the large black markets that don’t pay taxes. That way the governments get their tax income.

It's a classic result of a State controlled socialist "fuck private property" economy

 

[CrusaderFrank]

Geithner is making the rounds to the EU and he's telling them, "Let's just kick the can down the road until Obama is reelected" He is promising them the sun, moon and stars because that's how Obama operates.

 

[cbirch2]

Cbrirch, you hysterical little monkey, are you saying that the governments need to spend more to address the "trade imbalance" which is the cause of the EU problems?

It's hard to understand you because the spittle flies when you talk

Can you read?

Do you know what a trade imbalance is?

The german government does not have to spend more, but somehow the greeks have to begin exporting more goods than they import so that other countries spend more on greek goods.

It is a private sector solution, rather than a matter of simply cutting government spending (which, yes, does still have to be done in the case of greece).

 

[cbirch2]

No, I'm waiting for you to explain how trade balances drive an economy.

Usually, trade imbalances are a symptom, not a cause. But they can be a cause because they can induce capital flight in the short-run. Negative trade balances are one of the first things macro traders screen for when looking to short a country.

In the long run, trade balances do not drive an economy.

But an increased flow of euros can inflate prices and make labor and goods less competitive.

 

[CrusaderFrank]

Cbrirch, you hysterical little monkey, are you saying that the governments need to spend more to address the "trade imbalance" which is the cause of the EU problems?

It's hard to understand you because the spittle flies when you talk

Can you read?

Do you know what a trade imbalance is?

The german government does not have to spend more, but somehow the greeks have to begin exporting more goods than they import so that other countries spend more on greek goods.

It is a private sector solution, rather than a matter of simply cutting government spending (which, yes, does still have to be done in the case of greece).

Not sure what happened to you over the weekend but that last sentence is the first thing you've said that actually makes a lick of sense.

As far as exporting more I return your attention to the Peoples Republic of Vietnam who used to import 1 million tons of rice annually when they were a Workers Paradise. They recently adopted and embraced something American Democrats loathe, the Free Market and they are now the Number 2 exporter of rice on the planet. Same people, same geography, different economic philosophy.

Is that what you mean?

 

[cbirch2]

Cbrirch, you hysterical little monkey, are you saying that the governments need to spend more to address the "trade imbalance" which is the cause of the EU problems?

It's hard to understand you because the spittle flies when you talk

Can you read?

Do you know what a trade imbalance is?

The german government does not have to spend more, but somehow the greeks have to begin exporting more goods than they import so that other countries spend more on greek goods.

It is a private sector solution, rather than a matter of simply cutting government spending (which, yes, does still have to be done in the case of greece).

Not sure what happened to you over the weekend but that last sentence is the first thing you've said that actually makes a lick of sense.

As far as exporting more I return your attention to the Peoples Republic of Vietnam who used to import 1 million tons of rice annually when they were a Workers Paradise. They recently adopted and embraced something American Democrats loathe, the Free Market and they are now the Number 2 exporter of rice on the planet. Same people, same geography, different economic philosophy.

Is that what you mean?

Wow.

Thats quite a stretch.

So by your logic every capitalist country has a trade surplus?

Yea...that was just the dumbest strung together set of evidence ive had the pleasure of reading.

 

[CrusaderFrank]

Can you read?

Do you know what a trade imbalance is?

The german government does not have to spend more, but somehow the greeks have to begin exporting more goods than they import so that other countries spend more on greek goods.

It is a private sector solution, rather than a matter of simply cutting government spending (which, yes, does still have to be done in the case of greece).

Not sure what happened to you over the weekend but that last sentence is the first thing you've said that actually makes a lick of sense.

As far as exporting more I return your attention to the Peoples Republic of Vietnam who used to import 1 million tons of rice annually when they were a Workers Paradise. They recently adopted and embraced something American Democrats loathe, the Free Market and they are now the Number 2 exporter of rice on the planet. Same people, same geography, different economic philosophy.

Is that what you mean?

Wow.

Thats quite a stretch.

So by your logic every capitalist country has a trade surplus?

Yea...that was just the dumbest strung together set of evidence ive had the pleasure of reading.

I don't know where you got the "every capitalist nation" idea, I didn't write it. I think you have a severe reading comprehension problem caused by the fact that you're a fucking asshole.

You actually have a chance of beating Mr Shaman onto my ignore list, you'd be the first one ever.