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>Also, even if they were wrong to do so, something must have caused creditors to demand austerity Austerity in Greece (much as in America) is pure class warfar

>Also, even if they were wrong to do so, something must have caused creditors to demand austerity Austerity in Greece (much as in America) is pure class warfare: an attempt to break the back of the working classes so that their wages and negotiating leverage will be pressured down. There is a reason that French and German creditors demanded that pensions and public sector salaries be slashed but "allowed" Greece to continuing purchasing expensive imported military hardware. It's the same reason why Schaeuble and Dijsselbloem keep pushing for austerity despite the fact that it will never help get the debt paid back: they aren't actually interested in being paid back.

latch 12y ago
Is there a reason "allowed" is in quotes? I feel like I'm missing something obvious, but I don't know what. Without that [possible] missing piece, couldn't Greece just have opted not to buy any military hardware?
- speeder 12y ago
  I don't have the full explanation now, some people explained and gave sources to me in 2011, but some legal moves were made abusing some contracts that made greece buy a bunch of military hardware for the same value as some unwanted bailout (that they also had to take, to get the bailout they actually wanted). If I rembember correctly about 100 billion in total went in thsoe sort of deals. The greek population then became very upset, because the hardware bought don't even work right (some subs that DO work, but float always tilted and are unstable, and some military planes that need an absurd amount of ground maintenance to fly just a little, something that to greece is useless, they need planes that can fly for longer time compared to the amount of time on ground).
- crdoconnor 12y ago
  >Is there a reason "allowed" is in quotes? I feel like I'm missing something obvious, but I don't know what. Without that [possible] missing piece, couldn't Greece just have opted not to buy any military hardware? One of the conditions of the bailout to Greece was essentially that the Troika should have some control over the Greek budget to ensure that it wasn't "spending irresponsibly". The fact public sector pensions were at the top of the list of 'must-do' cuts and military hardware purchases weren't even on the list demonstrates where the Troika's priorities really lay.
AnimalMuppet 12y ago
> Austerity in Greece (much as in America) is pure class warfare: an attempt to break the back of the working classes so that their wages and negotiating leverage will be pressured down. Can you supply actual evidence for that claim? Because for those who don't agree with you (and there are many), the bare claim is not very persuasive.
- crdoconnor 12y ago
  Here's what the IMF (a member of the Troika) has to say: https://systemicdisorder.wordpress.com/2012/10/10/quietly-the-imf-confesses-that-austerity-does-not-work https://systemicdisorder.wordpress.com/2012/10/10/quietly-th... >The IMF said a common figure used by governments was to assume that for each dollar lost in government spending, 50 cents is erased from gross domestic product, an assumption used when creating austerity budgets. But, the fund said, its study of the issue has found that, since the economic collapse that began in 2008, for each dollar cut from government spending, GDP is reduced from 90 cents to $1.70. i.e. yes it cuts your deficit, but your public debt/GDP gets worse.
  - AnimalMuppet 12y ago
    Interesting: In "normal" times, adding a dollar of government spending adds 50 cents to GDP, that is, it's inefficient. I don't find it surprising that things changed in 2008 - we entered a very different economic environment then. So austerity was a bad (even disastrous) policy choice starting in 2008. But it seems reasonable to ascribe the bad choice to the troika being unfamiliar with that new environment, rather than to "pure class warfare". (Except once they learned that the conditions changed, doubling down on a non-working policy is less easy to justify.)
protomyth 12y ago
In the US, "austerity" was done by the Congress and forced on President Truman from 1946 - 1948. It worked quite well after the war as President Truman wanted to continue spending to reinvigorate the economy (FDR style projects). This lead to some very good years. The modern US has not bothered to reduce its borrowing or spending in a meaningful way.
- crdoconnor 12y ago
  >In the US, "austerity" was done by the Congress and forced on President Truman from 1946 - 1948. It worked quite well after the war The only reason it "worked" was because it was implemented after the New Deal, which had provisions (like social security) that acted as a counter-cyclical automatic stabilizer. >The modern US has not bothered to reduce its borrowing or spending in a meaningful way. Naturally. The US economy would crater if it did. There has been a lot of political pressure to chip away at US social security, however, with austerity used as the pretext for why it is "necessary". Fortunately the AARP is a powerful enough political force in Washington to make this politically impossible. For now. As in Greece - all arguments about austerity go out of the window when talking about the military's budget, so this is most often used by Congress as a means of giving their constituents' economies a keynesian kick while not offending their corporate backers.
  - protomyth 12y ago
    So, keep borrowing and hope it all works out? "The only reason it "worked" was because it was implemented after the New Deal, which had provisions (like social security) that acted as a counter-cyclical automatic stabilizer." references?
    - crdoconnor 12y ago
      >So, keep borrowing and hope it all works out? Personally I think that they should default now and start issuing tax anticipation notes like California did. Losing access to the credit markets is irrelevant to them now, so they might as well hit the reset button. >references? Explanation here: http://socialdemocracy21stcentury.blogspot.sg/2011/01/keynesianism-in-america-in-1940s-and.html http://socialdemocracy21stcentury.blogspot.sg/2011/01/keynes...
dingaling 12y ago
> Austerity in Greece (much as in America) is pure class warfare: an attempt to break the back of the working classes so that their wages and negotiating leverage will be pressured down. Austerity == reduction in Government spending. When has that ever been bad? Isn't small-government something to which all countries should aspire. A couple of comparisons, bear in mind Greece has a population of 12 million and the UK 60 million Does Greece really need 700,000 civil servants ( down from 900,000 ) when the UK makes do with 420,000? Does Greece really need a standing military of 140,000, the same size as the UK's military?
- sebkomianos 12y ago
  What's happening is not reduction in Government spending. It's reductions everywhere. They haven't just been firing civil servants that were doing a bad job (or no job at all), they have been cutting budgets of hospitals, they have been shutting down schools, they have been reducing health insurance coverage, etc etc. And that's where the current party came in and said "Okay, we HAVE TO make reforms because we have been spending wrongly, among other things, BUT we can't do whatever just so numbers look right - it has to make sense, both for the country to continue existing and for the creditors to see that they have a longterm trustworthy partner on the other side of the table." As for your last question, two things: a) Why does an EU-member country have to spend on military AT ALL? Shouldn't such costs be executed at a EU-wide level? b) Greece is neighbourhooding with Albania, FYROM, Bulgaria, Turkey. UK is surrounded by...the sea, Ireland and...France.

latch 12y ago

Is there a reason "allowed" is in quotes? I feel like I'm missing something obvious, but I don't know what. Without that [possible] missing piece, couldn't Greece just have opted not to buy any military hardware?

speeder 12y ago
I don't have the full explanation now, some people explained and gave sources to me in 2011, but some legal moves were made abusing some contracts that made greece buy a bunch of military hardware for the same value as some unwanted bailout (that they also had to take, to get the bailout they actually wanted). If I rembember correctly about 100 billion in total went in thsoe sort of deals. The greek population then became very upset, because the hardware bought don't even work right (some subs that DO work, but float always tilted and are unstable, and some military planes that need an absurd amount of ground maintenance to fly just a little, something that to greece is useless, they need planes that can fly for longer time compared to the amount of time on ground).
crdoconnor 12y ago
>Is there a reason "allowed" is in quotes? I feel like I'm missing something obvious, but I don't know what. Without that [possible] missing piece, couldn't Greece just have opted not to buy any military hardware? One of the conditions of the bailout to Greece was essentially that the Troika should have some control over the Greek budget to ensure that it wasn't "spending irresponsibly". The fact public sector pensions were at the top of the list of 'must-do' cuts and military hardware purchases weren't even on the list demonstrates where the Troika's priorities really lay.

AnimalMuppet 12y ago

> Austerity in Greece (much as in America) is pure class warfare: an attempt to break the back of the working classes so that their wages and negotiating leverage will be pressured down. Can you supply actual evidence for that claim? Because for those who don't agree with you (and there are many), the bare claim is not very persuasive.

crdoconnor 12y ago
Here's what the IMF (a member of the Troika) has to say: https://systemicdisorder.wordpress.com/2012/10/10/quietly-the-imf-confesses-that-austerity-does-not-work https://systemicdisorder.wordpress.com/2012/10/10/quietly-th... >The IMF said a common figure used by governments was to assume that for each dollar lost in government spending, 50 cents is erased from gross domestic product, an assumption used when creating austerity budgets. But, the fund said, its study of the issue has found that, since the economic collapse that began in 2008, for each dollar cut from government spending, GDP is reduced from 90 cents to $1.70. i.e. yes it cuts your deficit, but your public debt/GDP gets worse.
- AnimalMuppet 12y ago
  Interesting: In "normal" times, adding a dollar of government spending adds 50 cents to GDP, that is, it's inefficient. I don't find it surprising that things changed in 2008 - we entered a very different economic environment then. So austerity was a bad (even disastrous) policy choice starting in 2008. But it seems reasonable to ascribe the bad choice to the troika being unfamiliar with that new environment, rather than to "pure class warfare". (Except once they learned that the conditions changed, doubling down on a non-working policy is less easy to justify.)

protomyth 12y ago

In the US, "austerity" was done by the Congress and forced on President Truman from 1946 - 1948. It worked quite well after the war as President Truman wanted to continue spending to reinvigorate the economy (FDR style projects). This lead to some very good years. The modern US has not bothered to reduce its borrowing or spending in a meaningful way.

crdoconnor 12y ago
>In the US, "austerity" was done by the Congress and forced on President Truman from 1946 - 1948. It worked quite well after the war The only reason it "worked" was because it was implemented after the New Deal, which had provisions (like social security) that acted as a counter-cyclical automatic stabilizer. >The modern US has not bothered to reduce its borrowing or spending in a meaningful way. Naturally. The US economy would crater if it did. There has been a lot of political pressure to chip away at US social security, however, with austerity used as the pretext for why it is "necessary". Fortunately the AARP is a powerful enough political force in Washington to make this politically impossible. For now. As in Greece - all arguments about austerity go out of the window when talking about the military's budget, so this is most often used by Congress as a means of giving their constituents' economies a keynesian kick while not offending their corporate backers.
- protomyth 12y ago
  So, keep borrowing and hope it all works out? "The only reason it "worked" was because it was implemented after the New Deal, which had provisions (like social security) that acted as a counter-cyclical automatic stabilizer." references?
  - crdoconnor 12y ago
    >So, keep borrowing and hope it all works out? Personally I think that they should default now and start issuing tax anticipation notes like California did. Losing access to the credit markets is irrelevant to them now, so they might as well hit the reset button. >references? Explanation here: http://socialdemocracy21stcentury.blogspot.sg/2011/01/keynesianism-in-america-in-1940s-and.html http://socialdemocracy21stcentury.blogspot.sg/2011/01/keynes...

dingaling 12y ago

> Austerity in Greece (much as in America) is pure class warfare: an attempt to break the back of the working classes so that their wages and negotiating leverage will be pressured down. Austerity == reduction in Government spending. When has that ever been bad? Isn't small-government something to which all countries should aspire. A couple of comparisons, bear in mind Greece has a population of 12 million and the UK 60 million Does Greece really need 700,000 civil servants ( down from 900,000 ) when the UK makes do with 420,000? Does Greece really need a standing military of 140,000, the same size as the UK's military?

sebkomianos 12y ago
What's happening is not reduction in Government spending. It's reductions everywhere. They haven't just been firing civil servants that were doing a bad job (or no job at all), they have been cutting budgets of hospitals, they have been shutting down schools, they have been reducing health insurance coverage, etc etc. And that's where the current party came in and said "Okay, we HAVE TO make reforms because we have been spending wrongly, among other things, BUT we can't do whatever just so numbers look right - it has to make sense, both for the country to continue existing and for the creditors to see that they have a longterm trustworthy partner on the other side of the table." As for your last question, two things: a) Why does an EU-member country have to spend on military AT ALL? Shouldn't such costs be executed at a EU-wide level? b) Greece is neighbourhooding with Albania, FYROM, Bulgaria, Turkey. UK is surrounded by...the sea, Ireland and...France.