3 ms·
> Or rather it'll happen again and again until the casino is turned into a viable and competitive economy. By what mechanism? Each round of cuts drives up unem
by Bartweiss 10y ago
> Or rather it'll happen again and again until the casino is turned into a viable and competitive economy.
By what mechanism? Each round of cuts drives up unemployment and poverty, and cutting expenses hasn't solved the deficit because trashing the economy has destroyed tax revenues.
The first few rounds were rationalization, but they were too little too late. At this point the deep restructuring that's still needed is unapproachable - it's too slow and too unpopular, and the economy is already too weak. The recent cuts haven't been sensible and structural, they've been deadline-beating short-term moves to unlock a new tranche.
Germany gains from this, certainly, but by making an example of Greece. It deters other high-debt Euro nations from getting into the same state, but it's not moving Greece closer to functionality.
- occamrazor 10y agoCutting expenses has not solved the _debt_ problem, but has surely solved the _deficit_. Greece has a strong primary surplus.
- shkkmo 10y ago> but has surely solved the _deficit_. Greece has a strong primary surplus. No, it hasn't. The "primary surplus' doesn't include any debt repayments.
- Bartweiss 10y agoYes, exactly. I said "too little too late" because a primary surplus doesn't resolve crippling debt - at this point it looks like the debt is far too large to handle with any kind of sensible short-term spending cuts.