Greek style Austerity - would you like it imposing on you?

[Fareast]

Could we stand a long, deep recession ? Sell the car ! Blackpool, not Miami ! Cut down on fast food and convenience food ! Economise on electricity and gas ? OMG to the power of 4 !!

 

Hey, hang abaht.......a lot of us have been through all that-----and had even less than that ! And History is full of similar examples Nearly everyone in the 1930 's had less than they did in the 1920 's...........and so life goes on-------------------up and down, down up, down. You have to learn to be flexible and learn NOT to spend money you haven 't really got.

 

I just wonder if the experience will do us any good psychologically or spiritually ?

[Gordonb]

Perhaps that is what it would be like if our civil servants had a retirement age of 58 at 80% of Salary for long servers (pre 1992)

http://www.world-psi.org/TemplateEn.cfm?Section=Home&Template=/ContentManagement/ContentDisplay.cfm&ContentFileID=23237

 

Equally it would appear that their tax collection system makes ours look perfect.

[Anna B]

Our repayment size is getting smaller because we are tightening our belts instead of spending more.

 

 

Greece is making things worse for themselves in the real world because they keep on striking and worsening the economy even further.

 

If they were to get out of the EU monetary thing, they could deflate their currency and in their own economic bubble everything would be virtually hunky dory!

 

I hate to mention it, but our debt is still growing in spite of cut backs, and will continue to do so.

 

It has reached a point where no amount of austerity measures as we know them will reduce it sufficiently. We are about to enter third world territory and the Government know it.

[just_words]

I hate to mention it, but our debt is still growing in spite of cut backs, and will continue to do so.

 

It has reached a point where no amount of austerity measures as we know them will reduce it sufficiently. We are about to enter third world territory and the Government know it.

 

But the rate it is growing has diminished some because we haven't been borrowing more to dig ourselves out, and for that we are in a slightly better position than most.

 

But we couldn't carry on with the communist style public sector that Labour had given us...

 

And hey, we can always deflate...

 

But now we are leaner and meaner, the only way is up (unless we have loads of strikes about getting more money, you know that stuff we ain't got any of as you succinctly pointed out!)

 

 

P.S. Not so sure about the third world territory and you know it!

[chem1st]

I hate to mention it, but our debt is still growing in spite of cut backs, and will continue to do so.

 

It has reached a point where no amount of austerity measures as we know them will reduce it sufficiently. We are about to enter third world territory and the Government know it.

 

If we run a deficit of X and increase the debt by 5% but inflate the money supply, wages, price of goods and GDP by 10%, the debt as a % of GDP has been reduced...

[andyofborg]

If they were to get out of the EU monetary thing, they could deflate their currency and in their own economic bubble everything would be virtually hunky dory!

 

in the longer term they might, but in the short and medium term it would be catastrophic.

 

it would take months to return to the drachma and during that time everyone who was able too would move their money out of greece to other countries.

 

also, the exchange rate of the new drachma against pretty much every other currency would collapse.

 

they have lost 10% or so of GDP, they could lose up to 50%.

 

there are two problems here which need to be dealt with, one is the soverign debt crisis and that can only be resolved by a controlled default. this should allow the debt to be written off at a rate that doesn't crash most of the banks.

 

the other problem is the stresses within the eurozone caused by differing sizes of the economies and borrowing needs. they need to be resolved by more central control over borrowing, there are other ways but the obvious one is by the ECB issuing eurobonds on behalf of the whole eurozone rather than allowing each country to borrow willy nilly.

 

also the big northern european economies will always be able to outcompete the smaller ones no matter which way the euro moves so they need to acknowledge that they have a responsibility either, directly or indirectly, to support the smaller ones.

[just_words]

in the longer term they might, but in the short and medium term it would be catastrophic.

 

it would take months to return to the drachma and during that time everyone who was able too would move their money out of greece to other countries.

 

also, the exchange rate of the new drachma against pretty much every other currency would collapse.

 

they have lost 10% or so of GDP, they could lose up to 50%.

 

there are two problems here which need to be dealt with, one is the soverign debt crisis and that can only be resolved by a controlled default. this should allow the debt to be written off at a rate that doesn't crash most of the banks.

 

the other problem is the stresses within the eurozone caused by differing sizes of the economies and borrowing needs. they need to be resolved by more central control over borrowing, there are other ways but the obvious one is by the ECB issuing eurobonds on behalf of the whole eurozone rather than allowing each country to borrow willy nilly.

 

also the big northern european economies will always be able to outcompete the smaller ones no matter which way the euro moves so they need to acknowledge that they have a responsibility either, directly or indirectly, to support the smaller ones.

 

Yes on all points, quite widely discussed in various circles.

[andyofborg]

I hate to mention it, but our debt is still growing in spite of cut backs, and will continue to do so.

 

It has reached a point where no amount of austerity measures as we know them will reduce it sufficiently. We are about to enter third world territory and the Government know it.

 

it is well within our means to service the debt so the fact that it's growing isn't that important, also much of the growth in borrowing at the minute is a result of higher unemployment which can be paid off when growth returns.

 

that is assuming that growth returns, to get growth there needs to be

investment, in the absence of private sector investment there needs to be public sector investment. if you have little or none from anywhere like now then you don't get growth like now.

[I1L2T3]

The last 30 years of general prosperity were fuelled by an expansion of credit the likes of which have never seen before. Governments, companies and individuals have all played their part in pumping up the credit bubble.

 

The credit bubble machine died in 2008. Anything that is generated, e.g. by central banks, is pumped straight to the top. It doesn't filter down any more.

 

We're going down the crapper big time.

[metaphoria]

Chill. Economies rise and fall, and rise again.

 

And if they don't we'll all be in it together and perhaps bond with our neighbours (we might even talk to people we can actually see) And like all good people do in times of hardship, we'll make do and mend.

 

Keep calm and carry on ;-)