Who is bailing out Greece and why?

Cancel 2016.2

Cancel 2016.2

The Almighty
http://www.realclearpolitics.com/articles/2010/05/13/crony_capitalism_105560.html

Good article on it linked above...

Now American taxpayers also own a little bit of a small nation. They provide the U.S. contribution of 17 percent of the assets of the International Monetary Fund, which is giving Greece $39 billion (the IMF also is contributing $321 billion to a "stabilization" fund for other eurozone nations with debt problems). So the U.S. government, which would borrow 42 cents of every dollar it spends under the president's 2011 budget, is borrowing to rescue Greece and others from the consequences of their borrowing.
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Yeah, that makes sense... lets borrow more to help those who got into trouble by borrowing too much.

That nation, whose GDP is below that of the Dallas-Fort Worth metropolitan area, is "too big to fail," meaning too inconveniently connected to too many big banks. Bailing out Greece really rescues European banks that improvidently bought Greek bonds. Visit here for a useful New York Times graphic illustrating how European nations borrow from one another. For example, Italy owes France (French banks) $511 billion, a sum nearly equal to 20 percent of France's GDP. About one-third of Portugal's debt is held by Spain, which has $238 billion of its debt held by Germany and $220 billion by France. Russell Roberts of George Mason University notes that this "discourages prudence and wariness" because when "everyone has financed everyone else, you can justify bailing everyone out."
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So, those who wanted Glass Steagall repealed (Clinton), argue that the reason they wanted it repealed is so that our banks could compete internationally. Great... so now our system is just as fucked up as those in the EU. Great job Clinton.

America's projected $9.7 trillion in budget deficits in this decade will drive the nation's debt to 90 percent of GDP (Greece's is 124 percent). So some people say that to avoid a Greek-style crisis, America should adopt a value-added tax (VAT). But Europe's most troubled nations -- the PIIGS: Portugal, Ireland, Italy, Greece and Spain -- have VATs of 20 percent, 21 percent, 20 percent, 21 percent and 16 percent, respectively. As part of its austerity penance, the Greek government is going to give itself more money by raising its VAT to 23 percent.
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I like Volcker on the whole, but the above shows how friggin bad the VAT is. They have already tried that approach. IT DOES NOT WORK. IT IS REGRESSIVE AND HURTS THE ECONOMY.

It is time to shrink the government. We all know that there is vast amounts of waste permeating in every facet of the government. I doubt there is any one agency/department that doesn't have a Rush Limbaugh layer of fat around it.
 
I always was of the opinion the EURO and European union would never be a permanent thing. No way you going to put an Italian, frenchman, Spaniard, greek, and so on into a room and not witness them fighting. When things are good no problem.. but as soon as something goes wrong which it will the EURO will fail. This Greek thing is nothing and look at the outrage by the Germans. They hate greeks now.
 
Superfreak said:
Yeah, that makes sense... lets borrow more to help those who got into trouble by borrowing too much.
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Pretending that "Greece" is being bailed out as opposed to holders of Greek debt is silly. The Greek bailout is a bailout not of those that borrowed to much, but those that lent too much.


Superfreak said:
So, those who wanted Glass Steagall repealed (Clinton), argue that the reason they wanted it repealed is so that our banks could compete internationally. Great... so now our system is just as fucked up as those in the EU. Great job Clinton.
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Yawners.


Superfreak said:
I like Volcker on the whole, but the above shows how friggin bad the VAT is. They have already tried that approach. IT DOES NOT WORK. IT IS REGRESSIVE AND HURTS THE ECONOMY.
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Yawners.


Superfreak said:
It is time to shrink the government. We all know that there is vast amounts of waste permeating in every facet of the government. I doubt there is any one agency/department that doesn't have a Rush Limbaugh layer of fat around it.
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Easy to say, tough to do. Everybody wants to cut "spending," but when you start asking about specific categories of spending you find that not to many people actually want anything of substance to be cut. I've posted this chart before which illustrates the problem. The blue lines represent how many people want the corresponding category of spending cut. The red line represents the expenditures in the corresponding category of spending:

VSpending.jpg
 
This is like your boss buying a new mercedes with your wages and wanting you to feel like you won something in the deal.
 
Chapdog said:
I always was of the opinion the EURO and European union would never be a permanent thing. No way you going to put an Italian, frenchman, Spaniard, greek, and so on into a room and not witness them fighting. When things are good no problem.. but as soon as something goes wrong which it will the EURO will fail. This Greek thing is nothing and look at the outrage by the Germans. They hate greeks now.
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The Germans hate the Greeks because their banks lent the Greek government too much money. If the Germans want to hate on anybody they should hate their banks.
 
I wish the tea party would get interested in this one. The us spending like 50 billion to bail out Greece. Greece really! Really!
 
Chapdog said:
I always was of the opinion the EURO and European union would never be a permanent thing. No way you going to put an Italian, frenchman, Spaniard, greek, and so on into a room and not witness them fighting. When things are good no problem.. but as soon as something goes wrong which it will the EURO will fail. This Greek thing is nothing and look at the outrage by the Germans. They hate greeks now.
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Outside of the governments, the people in many of these countries are pissed. Some are pissed at each other, some are pissed at the governments that allowed this crap to occur. As the article states, the fact that the EU is a round robin of debt means they have all become so intertwined that one falling country dominoes into the rest.

Here is the lesson:

I propose we create an entitlement where no one has to work and the government provides for us all. We can borrow from future generations to pay for it. Who is with me??? I mean is that not the be all end all of entitlements?

If someone opposes it we can just say 'why do you hate everyone? why do you want to make them work rather than be at home with their families? you are selfish.'

Now... there is one obvious reason the above wouldn't work... beside that, what is the second reason?
 
Topspin said:
If the American tax payer can bail out the drunk lazy Greeks. Who gets turned down?
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American workers. we're supposed to pay off the world debt as all our jobs are sent out overseas. Awesome.



We can only meet these expectations with our historical "can-do" attitude.*



* indicates "fuck that"
 
NigelTufnel said:
Pretending that "Greece" is being bailed out as opposed to holders of Greek debt is silly. The Greek bailout is a bailout not of those that borrowed to much, but those that lent too much.

Yawners.

Yawners.
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As usual, your insight is amusing. The bailout.... bails out BOTH the borrower AND the lender. If Greece received no help, they would end up defaulting on their debt. That would eliminate most lending sources to them. Their economy would shrivel up worse than it already is. This is far more crucial to Greece as a country than it is to the banks that loaned them the money. Would the banks be hurt? Of course they would, but to pretend this is just a bailout for them is absurd.


Easy to say, tough to do. Everybody wants to cut "spending," but when you start asking about specific categories of spending you find that not to many people actually want anything of substance to be cut. I've posted this chart before which illustrates the problem. The blue lines represent how many people want the corresponding category of spending cut. The red line represents the expenditures in the corresponding category of spending:

VSpending.jpg
Click to expand...

I do not disagree on how tough it would be. But that is the point. We CANNOT keep taking the EASY route. We HAVE to make the tough choices now. Unless of course the game plan is to keep pushing the problem into the future, letting it fester and spoil for as long as possible until it finally explodes onto the country and destroys everything.

Allowing the idiots in DC to raise the nations debt by over $9 Trillion in the next decade is nothing short of insane.
 
Topspin said:
If the American tax payer can bail out the drunk lazy Greeks. Who gets turned down?
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That is the problem. We keep trying to fix the problem in a manner that actually ADDS to the problem in the long term. All we are doing is pushing off the pain to future generations. Or at least that is what they are attempting to do. We have to tighten our belts, steady our legs.... and take the beating that is coming. Get it over with. Learn from our mistakes. Make sure we elect leaders that understand this 'promise the world to get re-elected' campaign strategy is no longer acceptable.

and yes... I realize in today's polarized atmosphere that is far easier said than done. Because it is much easier to simply point fingers to the other party and say 'its all their fault!!!'
 
Superfreak said:
As usual, your insight is amusing. The bailout.... bails out BOTH the borrower AND the lender. If Greece received no help, they would end up defaulting on their debt. That would eliminate most lending sources to them. Their economy would shrivel up worse than it already is. This is far more crucial to Greece as a country than it is to the banks that loaned them the money. Would the banks be hurt? Of course they would, but to pretend this is just a bailout for them is absurd.
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The Greek economy is going to shrivel up regardless. Have you taken a peek at the austerity package? This is a debt holder driven bailout. The effects of the debt holders being wiped out would reverberate through the European economy and the fear is that lending would seize up. The benefits to Greece are incidental to the benefits to the banks.


Superfreak said:
I do not disagree on how tough it would be. But that is the point. We CANNOT keep taking the EASY route. We HAVE to make the tough choices now. Unless of course the game plan is to keep pushing the problem into the future, letting it fester and spoil for as long as possible until it finally explodes onto the country and destroys everything.

Allowing the idiots in DC to raise the nations debt by over $9 Trillion in the next decade is nothing short of insane.
Click to expand...


Yawners.
 
NigelTufnel said:
The Greek economy is going to shrivel up regardless. Have you taken a peek at the austerity package? This is a debt holder driven bailout. The effects of the debt holders being wiped out would reverberate through the European economy and the fear is that lending would seize up. The benefits to Greece are incidental to the benefits to the banks.

Yawners.
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Yawn.
 
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