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Well, not really. Instead of the government lending X dollars to Greece, they can just spend those X dollars on buying tanks, even if they are not used. Would
by valenterry 4y ago
Well, not really. Instead of the government lending X dollars to Greece, they can just spend those X dollars on buying tanks, even if they are not used.
Would the government do that? Probably not, they might buy some tanks and spent the money for other things, so a different part of the economy is benefited. But when looking at the overall economy / gross product, it doesn't really matter.
- toyg 4y agoBut that's the thing - they can't spend those directly to buy tanks - until very recently, they were effectively forbidden from expanding their military capability, like Japan, and there is still a lot of political resistence against that sort of thing. So how do you forage a national defense industry then? You lend to others to buy their wares. That is only one of many, many German industries that would suffer from the demise of the Eurozone. The benefits of the common currency sustaining demand across the continent waaaaay outstrip any perceived "loss of control" for the German economy.
- valenterry 4y agoI mean, the context here is the impact on the German economy. If they can't buy tanks, they buy something else. As long as the money goes into German companies then the original claim that this would hurt German's economy is just not true. Okay, if the government actually cannot spent the money (even partially) at all, then yeah, the original claim would be true. I don't think this would be the case though.