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The thing that seems to be often missed about the 'Greek bailout'is it wasn't about bailing out Greece, it was more about bailing out the German bankers who'd l

The thing that seems to be often missed about the 'Greek bailout'is it wasn't about bailing out Greece, it was more about bailing out the German bankers who'd lent Greece more money than they should have. The Greek people were shafted by the EU, IMF etc. because they didn't want to see the German bankers take the pain. We see a similar problem with the current round of Quantitive Easing that the ECB are undertaking - they're giving the money to the bankers in the hope they'll lend it to others. Instead they should be giving it to people, so they can save, spend or pay off debt as they wish - it'll all end up in the banking system anyway but will actually do some benefit first.

tormeh 12y ago
I agree, but on the other hand Greece was taking the loans. It takes two to tango and it's both's fault. But yeah, QE should go directly and equally to citizens. Everything else is transfer of wealth from the poor to the rich.
cyphunk 12y ago
"Give the money to the people". The US did this in the form of tax credits for housing. Germany did something similar in the form of credits for car purchases. This form of giving goes directly toward an industry in need. I'm not sure how giving a blanket check helps. If the problem is consumer spending and IF this is an important driver for your economy it may have some impact but I think the problems the EU were facing were not this. So giving money to the people just sounds like dangerous populism and an action that makes little attempt to rebalance some ailment in the economic system.
- dpark 12y ago
  > I'm not sure how giving a blanket check helps. It doesn't help at all. We did that in the US with George Bush's 2008 tax rebates. Getting a check was nice, but I'm pretty sure the economic boost was smaller than the cost to the government.
- youngtaff 12y ago
  But at the moment we end up subsidising the banks with our money so they can make more money at our expense If you want to kickstart economies then expecting banks that are up shit creek due to their past lending and investment practices isn't the way to do it. The way to do it is give people money to use as they wish and not pick favourite industries. If people save the money it increases banks capital ratios, if they pay off debt it reduces the banks loan book, if they spend it it may increase inflation through consumer prices. Some people might even use it as capital to create a new business. Our current bank focused model of QE does none of these things.
netcan 12y ago
It's a part of it. But greece was insolvent not just because of historical debt but because of the budget/tax ratio.
bobcostas55 12y ago
>it was more about bailing out the German bankers who'd lent Greece more money than they should have. Considering the fact that private holders of Greek debt lost ~80% of their money in the default, I think this is a ridiculous thing to say.
- youngtaff 12y ago
  Most of the bailout money has gone to Greece's external creditors: "Since May 2010, Greece has been sent about $177 billion in European taxpayer money to keep the country afloat and ward off a bigger crisis that might threaten the entire currency union. Of that amount, a full two-thirds has gone to pay off bondholders and the troika." http://www.nytimes.com/2012/05/30/business/global/athens-no-longer-sees-most-of-its-bailout-aid.html http://www.nytimes.com/2012/05/30/business/global/athens-no-...

tormeh 12y ago

I agree, but on the other hand Greece was taking the loans. It takes two to tango and it's both's fault. But yeah, QE should go directly and equally to citizens. Everything else is transfer of wealth from the poor to the rich.

cyphunk 12y ago

"Give the money to the people". The US did this in the form of tax credits for housing. Germany did something similar in the form of credits for car purchases. This form of giving goes directly toward an industry in need. I'm not sure how giving a blanket check helps. If the problem is consumer spending and IF this is an important driver for your economy it may have some impact but I think the problems the EU were facing were not this. So giving money to the people just sounds like dangerous populism and an action that makes little attempt to rebalance some ailment in the economic system.

dpark 12y ago
> I'm not sure how giving a blanket check helps. It doesn't help at all. We did that in the US with George Bush's 2008 tax rebates. Getting a check was nice, but I'm pretty sure the economic boost was smaller than the cost to the government.
youngtaff 12y ago
But at the moment we end up subsidising the banks with our money so they can make more money at our expense If you want to kickstart economies then expecting banks that are up shit creek due to their past lending and investment practices isn't the way to do it. The way to do it is give people money to use as they wish and not pick favourite industries. If people save the money it increases banks capital ratios, if they pay off debt it reduces the banks loan book, if they spend it it may increase inflation through consumer prices. Some people might even use it as capital to create a new business. Our current bank focused model of QE does none of these things.

netcan 12y ago

It's a part of it. But greece was insolvent not just because of historical debt but because of the budget/tax ratio.

bobcostas55 12y ago

>it was more about bailing out the German bankers who'd lent Greece more money than they should have. Considering the fact that private holders of Greek debt lost ~80% of their money in the default, I think this is a ridiculous thing to say.

youngtaff 12y ago
Most of the bailout money has gone to Greece's external creditors: "Since May 2010, Greece has been sent about $177 billion in European taxpayer money to keep the country afloat and ward off a bigger crisis that might threaten the entire currency union. Of that amount, a full two-thirds has gone to pay off bondholders and the troika." http://www.nytimes.com/2012/05/30/business/global/athens-no-longer-sees-most-of-its-bailout-aid.html http://www.nytimes.com/2012/05/30/business/global/athens-no-...