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>This one is kinda buried in the list. This is what motivated the harsh austerity measures in Greece. So an entire country was punished because of a bug in a sp

>This one is kinda buried in the list. This is what motivated the harsh austerity measures in Greece. So an entire country was punished because of a bug in a spreadsheet. That isn't true. This paper indicated that moderately high levels of public debt constrained economic growth. As you have pointed out, the paper was riddled with errors and the evidence that moderately high levels of public debt slow economic growth isn't really there. What happened in Greece is quite different. Lenders lost confidence in the Greek government's ability to repay their debt. Partially because there was re-statement of public debt that increased the debt level by 11% overnight. What the Greek government did after that to get out from under this was to cut spending (austerity). Economists have always been sceptical that this would work since during a recession is the very worst time to cut spending since it reduces cumulative demand at a time when it is already down. Indeed it did not work as we all know, but Eurozone lenders were not willing to allow a partial default which is what should have happened and being in the Euro means that there is no possibility for a devaluation.

hef19898 7y ago
Well, basically the EU forced harsh measures on Greece so Greece could get money from the EU to repay debts to banks and other institutional investors. Investors didn't loose anything (over simplifying here), the EU got it's money back and Greece, along with Greeks, paid the bill. Would have been easier to just wire the money over to the investors directly and leave the Greeks alone. Investors understood the rescue of Greece exactly like that anyway if you ask me. But maybe the EU had to maintain the public impression of austerity. Or rather the Germans.
bobcostas55 7y ago
Greece consistently ran huge deficits during the crisis. They had a huge debt write-off in 2012 and still ended up with 180% debt/gdp, that doesn't happen if your spending policy is austere. https://3gp11q1ujq964apmpt3s9cda-wpengine.netdna-ssl.com/wp-content/uploads/2017/07/Greek-Government-Budget-Deficit_2.png https://3gp11q1ujq964apmpt3s9cda-wpengine.netdna-ssl.com/wp-...
- pjc50 7y ago
  Austerity is not measured in Euros but in the human casualties of the policy. https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Social_effects https://en.wikipedia.org/wiki/Greek_government-debt_crisis#S...
  - deleted 7y ago
    [deleted]
- pbhjpbhj 7y ago
  That's something curious about the UK at the moment - borrowing is huge, like the Tory government has borrowed more since they took over than the country borrowed previously in history, ever, (according to a stat I heard, but the actual figures are huge according to the Nat.Stats.Off too; this isn't just hearsay) and yet we've been going through massive austerity. Spending on services has been drastically cut, but the country has been borrowing vastly more money. The only way I see that working is if taxes have plummeted (but taxes for ordinary folk have risen slightly if anything) or if the money is being syphoned off somewhere ... but we're talking GDP levels of cash here. Anyone explain it to me?

hef19898 7y ago

Well, basically the EU forced harsh measures on Greece so Greece could get money from the EU to repay debts to banks and other institutional investors. Investors didn't loose anything (over simplifying here), the EU got it's money back and Greece, along with Greeks, paid the bill. Would have been easier to just wire the money over to the investors directly and leave the Greeks alone. Investors understood the rescue of Greece exactly like that anyway if you ask me. But maybe the EU had to maintain the public impression of austerity. Or rather the Germans.

bobcostas55 7y ago

Greece consistently ran huge deficits during the crisis. They had a huge debt write-off in 2012 and still ended up with 180% debt/gdp, that doesn't happen if your spending policy is austere. https://3gp11q1ujq964apmpt3s9cda-wpengine.netdna-ssl.com/wp-content/uploads/2017/07/Greek-Government-Budget-Deficit_2.png https://3gp11q1ujq964apmpt3s9cda-wpengine.netdna-ssl.com/wp-...

pjc50 7y ago
Austerity is not measured in Euros but in the human casualties of the policy. https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Social_effects https://en.wikipedia.org/wiki/Greek_government-debt_crisis#S...
- deleted 7y ago
  [deleted]
pbhjpbhj 7y ago
That's something curious about the UK at the moment - borrowing is huge, like the Tory government has borrowed more since they took over than the country borrowed previously in history, ever, (according to a stat I heard, but the actual figures are huge according to the Nat.Stats.Off too; this isn't just hearsay) and yet we've been going through massive austerity. Spending on services has been drastically cut, but the country has been borrowing vastly more money. The only way I see that working is if taxes have plummeted (but taxes for ordinary folk have risen slightly if anything) or if the money is being syphoned off somewhere ... but we're talking GDP levels of cash here. Anyone explain it to me?