Sarkozy - DEFEATED!!!!
- Thread starter nottyboi
- Start date
Give us bread and circuses prevails.
The only problem is that eventually in one way or another the bill has to be paid either through self-imposed austerity or when the credit is cut off and the later has this funny way of plunging everyone involved into depression.
If anyone other than M. Hollande and his advisers believe that a 75 percent tax rate is going to do anything save destroy landed estates (which can't be uprooted and moved overseas) they really need remedial courses in history and tax policy.
Austerity, we don't want no damn austerity. We want to spend, spend, spend and spend some more. Being fiscally irresponsible is so much more fun than austerity.
Aardvark154 said:
On the other hand, once you are in a depression austerity will not get you out. Painful as it will be, the Greeks should view the mistakes of the past as a lesson but move on into the future. They should default on their debt and focus on rebuilding rather than repaying.
That will put the EU in a tough spot, but perhaps EU bankers should have thought about that before allowing Greece to borrow so much from them.
At the end of the day a default amounts to
a transfer of wealth from the rich to everybody else, and perhaps that is now needed. Instead of paying bond holders Greece would be paying salaries.
Spain and Portugal should perhaps also pull the rip cord.
(I know this us a French result but the choices are starker and clearer in the case of Greece.)
No, sometime those owing the bill run like Hell out the door and down the street, "stiffing" the restaurant and the waiter both.
Have to love this British headline: "Au revoir, austerity! New Euro crisis as French oust Sarkozy in vote for return to ruinous spending".
His point is, in that case, the restaurant pays. The bill always does get paid. It really is a question of who pays it. In your example the restaurant was not expecting to provide a free dinner, but did. In the case of austerity measures, the bankers weren't expecting to be gifting that money to the Greek people, but that's what happened.
While I suspect that given what I know of the European countries (other than Germany) desire for social program on top of social program it would seem natural to expect the new French President to start spending money he doesn't have to keep the masses happy, you never know.
Sometimes, the "socialists" are far better at balancing the books than the conservatives.
Case in point would be the Chretien Liberals (with Paul Martin guiding the ship) did far more to address the Canadian deficit than ever did the likes of Mulroney or Harper.
Same in the states where Clinton actually had a surpluss several years in a row and then GWB came on board and cut taxes predominently for the rich and ran a deficit of 500 billion a year in each of his years as president.
From what I read of Sarkozy, he does not seem to have done too well at reigning in the French deficit. (Same with Cameron in the UK who increases taxes on the middle class, but cuts taxes for the rich).
So we'll see what the new dude comes up with. I have my doubts, but we'll see.
Sometimes, the "socialists" are far better at balancing the books than the conservatives.
Case in point would be the Chretien Liberals (with Paul Martin guiding the ship) did far more to address the Canadian deficit than ever did the likes of Mulroney or Harper.
Same in the states where Clinton actually had a surpluss several years in a row and then GWB came on board and cut taxes predominently for the rich and ran a deficit of 500 billion a year in each of his years as president.
From what I read of Sarkozy, he does not seem to have done too well at reigning in the French deficit. (Same with Cameron in the UK who increases taxes on the middle class, but cuts taxes for the rich).
So we'll see what the new dude comes up with. I have my doubts, but we'll see.
Yes, but the person who ran out on the check in this situation is doing so in front of everyone on the planet. Good luck in getting service in another restaurant again.
Greece may well be able to pull itself out of its current financial crisis. But it's still going to hurt. A LOT. Since Greece put itself in this position, there was no solution that didn't include Greece getting Greek. By not staying with austerity, Greece is going to go through a whole lot of pain and is going to come out of this unable to borrow cash from anyone for a long, long, long time. Personally, I'd go for more pain and getting properly on my feet at the end of the day, but that's obviously not what much of Europe has chosen. Fine. That's their choice. The rational voter has always been a myth anyway.
That's the problem with running out on your bill from a restaurant like this. You're never able to get service at any other restaurant, so you'll go hungry at times in the future. The restaurant loses money. The restaurant's other ("good") customers end up having to pay with increased bills over time. In the end, NOBODY WINS. EVERYBODY PAYS. Greece WILL pay for the money they're defaulting on: they're just going to pay for it for a longer time and in more subtle ways than are immediately obvious.
Don't believe it? Try declaring bankruptcy and then trying to get a loan. Or even renting a house. Do you have any idea how much more of a security deposit I charge for someone with credit that bad before I'll rent to them? Does Greece really want to spend the next several decades being forced to put millions more up front in escrow (at worse if any interest) for international deals? Because that's what's going to happen. Which means Greek companies will have to charge more for goods and services than non-Greek companies, which means non-Greek companies will own an even larger share of the Greek economy than they already do. Which means more Greeks out of work, which means a larger Greek welfare state, which means a greater burden on the Greeks who do have work, etc., etc., etc.
That's the problem with the welfare state mentality. It isn't strictly economics (though how you pay for a state when half the population works for or receives welfare from the state is a difficult question). It's about the rot that happens when everybody defaults on their responsibilities and debts.
Which is fine. The Chinese will just end up owning more of Greece and France. Europe is doomed to be a continent of nothing but quaint tourist destinations anyway.
I can't comment as to Canada's history on this front, but it is worth noting that the balancing of the books under Clinton came after he lost Congress in '94. The combination of the "liberal" President, a "conservative" Congress (truth is, American politics is about a hair's width from "far left" to "far right", especially when compared to the range in other nations), and an economic boom that really had little to do with politics (Al Gore notwithstanding, the Internet boom of the 90s was a private industry boom that government had little to do with other than getting the hell out of the way). And the balanced books were "paper" balanced. It's kind of like me saying my books are balanced because my financial plan has me paying off my credit cards in 2015 and my mortgages in 2025. Doesn't mean I can spend my 2027 surplus right now, which is kind of what Clinton and Congress did.
However, you need to mention a number of points: There was a Republican Congress for much of the period where the U.S. was not running a deficit budget, the Clinton Administration save for blowing up the Serbians and Somalia was not involved in a war, and the Clinton Administration drastically slashed the U.S. military.
Nice theory, but it hasn't worked that way in practice. When I look around at the nations that defaulted in the past... they seem fine.
By staying with austerity Greece is going to go through a whole lot MORE pain. Austerity, as you conceive it, and if you're honest about what it really means, has the Greek economy in recession for decades. Think about that. If you're 20 years old in Greece and looking towards the future, the current plan has your economy in recession until you retire. They will struggle to pay back what they owe, no matter how you restructure the debt. It means a continued siphoning off of whatever wealth they do generate, leaving nothing to re-invest in growth in their own economy. That will be far more catastrophic for them than a default. Within 50 years or so they will have sunk to third world nation status, under that plan.
Obviously something has to change. They can't go on with tax evasion, overpaid public servants, and pointless spending on idiotic projects. Assuming they can clean up those issues, a default would allow them to divert money into sensible projects that would create growth in their economy. It doesn't have to be government spending--it could come in the form of a reduced tax burden on Greek businesses and payrolls, which would drive free enterprise growth in their economy. Or it could be some sort of more sensible government intervention. But either way, if the money is being siphoned off to Germany and France, there won't be either kind of growth in their economy.
If that's true then it's obvious restaurants behave differently than bond investors. Defaulting appears to have been a good move for Argentina...
I think quite a few people who have declared bankruptcy have in fact gone on to get loans. In our system, after seven years you are clear. The question then is whether paying off your debt would take more than seven years, and if the level of hardship in paying it off is just as great, and lasts longer than seven years, then bankruptcy becomes a rational decision.
Fundamentally, I am claiming Greece is in that position. It owes so much money that there is no conceivable way the economy is ever going to recover properly unless they default.
Please don't twist this around into "you just don't believe in paying your bills", I pay my bills, I save for my retirement, I have never declared bankruptcy, and I have repaid every debt I ever took on. However, if I were the Greek president, and I was more interested in the future of the country than the past, and I were honest about the prospects of ever paying that money off, and the impact those payments are going to necessarily have on GDP--I would say to hell with the Euro and default.
The Sun (U.K.) headline is a bit disappointing:
http://www.thesun.co.uk/sol/homepag...ollande-in-French-presidential-elections.html
http://www.thesun.co.uk/sol/homepag...ollande-in-French-presidential-elections.html
It was expected, apparently all of Europe isn't ready to face reality yet.... the kids credit cards will have to take a bit more pain to allow the old to retire at 60....
OTB
OTB
in which case the waiter or restaurant pick up the bill...like I said..it always gets paid.
Now we can compare how well, say, England does (2 years of austerity) or Spain vs France.
Will austerity lead to growth, or will a more equitable, responsible government lead to growth?
The Frenchies woke up came to their senses and decided they had enough of those Blowhard gasbag Cons and threw them out!
Good on them!....
Good on them!....
