jay pettitt on 28/11/2012 at 22:36
Greece obviously isn't the problem. Greece has problems, it's the poster-girl of problems. And the Eurozone is behaving rather shamefully to compound Greece's problems - but they are far far too tiny to bring down the Euro let alone the rest of the World. The Eurozone and the rest of us could easily bail Greece out tomorrow, or cut it loose from the Euro.
The Euro has, what I guess, are much the same problems as the rest of us. It's just dipped back into recession so it's politk to point and say there's proof how much better our policies are. In truth the US, UK, Euro, Japan and the rest will bob about by greater and lesser amounts for a good while yet.
But yeah, it's an arse that the Euro is back in recession, because that hurts them and they stop buying goods and services from us, and it's not as though we're doing much better and can afford to lose the trade.
It affects Lazarus because the Eurozone is one of the world's really big economies that can move and shake things and get things going. And if they don't because they're limping around with a bad foot (Italy?) you don't get so much pensions, health provision, technology, education and so on. Either because you're from a small economy and you don't get to ride their coat tails or because you're from a large economy and you're going to have to make up the difference when you're probably not doing so well already.
What you want is a scenario where everyone does well.
Pyrian on 28/11/2012 at 22:49
Quote Posted by jay pettitt
What you want is a scenario where everyone does well.
You
communist! :mad: :joke:
jay pettitt on 28/11/2012 at 23:01
The reason why you'd (hopefully) want to cut Greece free from the Euro is because the Eurozone is hurting Greece, not the other way around.
Personally I couldn't care less whether the UK (me) joined the Euro or not (possibly I'd rather be in). One week it'll be up, the next it'd be down. In all likely hood having another largerish stableish economy on board wouldn't have done the Euro any harm at all.
Why have a really big single economy? You get to flaunt the size of your economy around the world stage.
jay pettitt on 28/11/2012 at 23:08
Quote Posted by Pyrian
The way I hear it, the shared currency has become a problem...
There might be a bit of that, but I think it's over played. I can't see that the situation is actually wildly different from the US having the same currency with a large number of States, all of which have a lot of self control and some are variously impoverished while others are doing somewhat better.
Peanuckle on 28/11/2012 at 23:28
I'm not much of an economist, so can somebody answer me this?
Where exactly does the money go in a recession? I mean, for a while everyone's doing great, then suddenly everyone's poor. What the fuck?
I understand how speculation can fuck things over like with the housing bubble in America, and I think that speculation should just be outright illegal. But what else happens?
Renzatic on 28/11/2012 at 23:53
Quote Posted by Peanuckle
Where exactly does the money go in a recession? I mean, for a while everyone's doing great, then suddenly everyone's poor. What the fuck?
It's not that the money goes anywhere, it's that it quits moving. In a healthy economy, money flows about. In a recession, it becomes stagnant.
That's the very basics of it anyway. At least as far as my "I've barely studied economics" education takes me.
icemann on 29/11/2012 at 00:03
Stagnant in part due to consumers choosing in mass to stop buying things they want, and instead only buying the essentials and saving the rest of their money. This results in less money going to businesses which leads to job losses & company closures etc etc. Domino effect basically.
Pyrian on 29/11/2012 at 00:06
Quote Posted by jay pettitt
I can't see that the situation is actually wildly different from the US having the same currency with a large number of States, all of which have a lot of self control and some are variously impoverished while others are doing somewhat better.
The states of the U.S. are more integrated than the nations of Europe, and the Federal government of the U.S. is larger as an independent fiscal entity than the EU fiscal equivalents.
How does that play out in practice to create a serious problem in Europe's fiscal integration while only a significant nuisance in the U.S.?
An unemployed person in Greece stays in Greece and collects entitlements from Greece's already overstressed coffers. An unemployed person in, let's say, Nevada, can much more easily pick up and move to New Mexico (or Vermont or whatever), and even if they stay in Nevada, the Federal government is paying their unemployment, social security, medicare, half of their medicaid, and so on. There are many state entitlement programs, varying by state, but the point is that the U.S. federal government provides a rather substantial fiscal cushion that doesn't really exist in the EU.
If the European Union contributed as much to the populations of its member states having issues as the U.S. Federal government does to its, Greece wouldn't
have a fiscal crisis right now. It would be in the hands of the EU, much like how the U.S. federal government is experiencing a substantial deficit. How's that going for the U.S.? The interest rates for U.S. treasuries are at historic
lows, sometimes even running below inflation, which is practically unheard of. The market interest rates for Greece debt is flat-out unsustainable; they couldn't pay it off even in theory, requiring repeated EU bailouts.
So, the thing is - and this charge was leveled at the EU from the outset - monetary integration without fiscal integration is inherently a recipe for certain types of disasters that won't threaten economies that are either integrated both monetarily and fiscally, or neither.
EDIT:
Quote Posted by Renzatic
It's not that the money goes anywhere, it's that it quits moving. In a healthy economy, money flows about. In a recession, it becomes stagnant.
That's the very basics of it anyway. At least as far as my "I've barely studied economics" education takes me.
I agree with this. What I find hilariously ironic is that we know perfectly well where the money
is. It's been amassed by so-called "job creators" - wealthy and corporations. And what they're doing with that money is they're investing it or even just sitting on it (for lack of good investments - see "historically low interest rates" above) rather than spending it. And of course the reason there's little that's really good to invest in, is because consumers can't afford to buy like they used to, and the reason consumers can't afford to buy like they used to is because wealthy investors and corporations have succeeded in sopping up lots of money.
But they - the rich - don't want
things, or at least not nearly to the degree that middle-class consumers do. They just want more money. But that sort of thing can only inflate bubble economies, it's not a sustainable basis for a growing economy.
jay pettitt on 29/11/2012 at 00:20
Quote:
Where exactly does the money go...?
Don't ask me, but it's possible that the money wasn't there in the first (the housing bubble was a bubble of debt after all) and what we're getting might be a dose of reality. The policies that governments have made and the choices businesses and individuals have made for how to thrive and do well on the efforts and workiness and savings that we collectively have, might not have been very good ones.
In the case of the UK, a lot of the money went to fill the hole the banks caused by creating too much debt. We had a very small national deficit, then we took out the mother of all loans to bail the banks out and as a result we now have a medium size deficit. In a sense we're lucky that way - the UK can borrow a fuck tonne of money and lenders will line up because they'll get it back with a smattering of interest. If Greece asked to borrow a lot of money they'd get a different response. What sucks for the UK is that we're collectively paying for that extra debt with austerity measures - the public sector aren't spending and a lot of trade is lost as a result and jobs are lost from the private and public sector.
Not everyone is poor of course. Some people are doing very, very nicely. If anyone is actually hurting (and they are) it's probably got a lot more to do with regressive wealth distribution than a poorly economy. A poorly economy won't help, but it's a bit like having a cold on top of a severed off arm - you'd probably be better off stemming the blood loss before mixing lemsip.
jay pettitt on 29/11/2012 at 00:28
Quote Posted by Pyrian
The states of the U.S. are more integrated than the nations of Europe, and the Federal government of the U.S. is larger as an independent fiscal entity than the EU fiscal equivalents.
How does that play out in practice to create a serious problem in Europe's fiscal integration while only a significant nuisance in the U.S.?
An unemployed person in Greece stays in Greece and collects entitlements from Greece's already overstressed coffers. An unemployed person in, let's say, Nevada, can much more easily pick up and move to New Mexico (or Vermont or whatever), and even if they stay in Nevada, the Federal government is paying their unemployment, social security, medicare, half of their medicaid, and so on. There are many state entitlement programs, varying by state, but the point is that the U.S. federal government provides a rather substantial fiscal cushion that doesn't really exist in the EU.
If the European Union contributed as much to the populations of its member states having issues as the U.S. Federal government does to its, Greece wouldn't
have a fiscal crisis right now. It would be in the hands of the EU, much like how the U.S. federal government is experiencing a substantial deficit. How's that going for the U.S.? The interest rates for U.S. treasuries are at historic
lows, sometimes even running below inflation, which is practically unheard of. The market interest rates for Greece debt is flat-out unsustainable; they couldn't pay it off even in theory, requiring repeated EU bailouts.
So, the thing is - and this charge was leveled at the EU from the outset - monetary integration without fiscal integration is inherently a recipe for certain types of disasters that won't threaten economies that are either integrated both monetarily and fiscally, or neither.
All this might be true, but it doesn't alter the fact that Greece isn't what is hurting the Euro (much to speak of). It's the Eurozone hurting Greece (and handling the fallout very badly too). That's not okay, but I can't see how that becomes the big problem to big economies on the international scale.
Quote:
What I find hilariously ironic is that we know perfectly well where the money is. It's been amassed by so-called "job creators" - wealthy and corporations. And what they're doing with that money is they're investing it or even just sitting on it (for lack of good investments - see "historically low interest rates" above) rather than spending it. And of course the reason there's little that's really good to invest in, is because consumers can't afford to buy like they used to, and the reason consumers can't afford to buy like they used to is because wealthy investors and corporations have succeeded in sopping up lots of money.
You
Marxist :mad::joke:
