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You responded 2 mins after I posted. Did you read the Die Zeit interview with Piketty which I linked to? What do you think about points like: "I am much more a

You responded 2 mins after I posted. Did you read the Die Zeit interview with Piketty which I linked to? What do you think about points like: "I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history. [...] Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe." Or how about the fast way for a state to leave delinquency: "Germany proved it in the 20th century. Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief." Have you read David Graeber's book which he recommends elsewhere ("Debt: The First 5000 Years") which covers how debt is just a promise, and it's fetishized (more than say promises from politicians to their constituents) when it's a promise from the weak to the powerful?

tptacek 11y ago
Before responding, I skimmed the Piketty interview to verify that he was, in fact, talking about Germany's war debt, and not debt generated through insolvency. I'm not moralizing debt. I am, however, according sovereign states and their constituent organizations the agency to decide whether or not to finance other sovereign states. However much honor you accord to debt service, the prospect that (expensive) debt forgiveness will simply generate the need for more debt forgiveness in the future is actually material to the question of how to finance Greece. (I am, in this instance, parroting something Tyler Cowen wrote yesterday; not that I agree with Cowen on everything [I'm not a libertarian].)
- calibraxis 11y ago
  Debt is fundamentally about morality. Otherwise everyone would accord Greece the agency to shrug and ignore it, like politicians break promises to consituents, or big companies ignore their debts to smaller ones. Instead, children worldwide are condemned to misery ("austerity"), because of moral statements like "you have to pay your debts". Though they did nothing to deserve it. As for Greece's finances, that's exactly what the negotiations are about. A political issue. (After all, money is a purely social construct, not some law of physics. Underlying it is power relations and violence.)
  - tptacek 11y ago
    You're dodging my point. Greece isn't simply arguing that, morality being relative and all, they've decided not to pay back their debts. They are demanding more money from their creditors. It seems like they have to: they're running a primary deficit; they're losing money even before you take debt service into account. Whatever the moral dimension of paying back their debt is has nothing to do with the question of whether Germany (ie, the EC) or the IMF (to whom Greece just defaulted) or the ECB (which doesn't want to be in this particular lending game to begin with) is going to give them more money. If Greece can't persuade the EC, IMF, or ECB to lend them more money, it's doesn't look like they can just walk away from this whole scenario. "Oh well! Debt is just politics and morality!" That might be true, but if they want to allow people to retire in their early 60s, or pay half the nominal tax rate, or not regressively tax the poor through punishing VAT increases, they're going to need to convince someone in the world of some kind of compatible morality, right? They require additional financing, don't they?
    - twobits 11y ago
      No, the greeks don't demand more money. They want to make the debt viable, in order to be able to pay it.
      - tptacek 11y ago
        I don't understand. Aren't the terms the Greeks are negotiating over additional financing from the EC, ECB, and IMF?
        atmosx 11y ago
        He has a point actually :-) Varoufakis does not accept the 7.2 billion of "aid" under current conditions because he believes that Greece has an insolvency problem and not a liquidity problem. The current hovernment wants to add at least 30% debt reatructuring (which Germany says it s off the table) and pay back only when reasonable primary surpluss has been achieved.
    - 11y ago

tptacek 11y ago

Before responding, I skimmed the Piketty interview to verify that he was, in fact, talking about Germany's war debt, and not debt generated through insolvency. I'm not moralizing debt. I am, however, according sovereign states and their constituent organizations the agency to decide whether or not to finance other sovereign states. However much honor you accord to debt service, the prospect that (expensive) debt forgiveness will simply generate the need for more debt forgiveness in the future is actually material to the question of how to finance Greece. (I am, in this instance, parroting something Tyler Cowen wrote yesterday; not that I agree with Cowen on everything [I'm not a libertarian].)

calibraxis 11y ago
Debt is fundamentally about morality. Otherwise everyone would accord Greece the agency to shrug and ignore it, like politicians break promises to consituents, or big companies ignore their debts to smaller ones. Instead, children worldwide are condemned to misery ("austerity"), because of moral statements like "you have to pay your debts". Though they did nothing to deserve it. As for Greece's finances, that's exactly what the negotiations are about. A political issue. (After all, money is a purely social construct, not some law of physics. Underlying it is power relations and violence.)
- tptacek 11y ago
  You're dodging my point. Greece isn't simply arguing that, morality being relative and all, they've decided not to pay back their debts. They are demanding more money from their creditors. It seems like they have to: they're running a primary deficit; they're losing money even before you take debt service into account. Whatever the moral dimension of paying back their debt is has nothing to do with the question of whether Germany (ie, the EC) or the IMF (to whom Greece just defaulted) or the ECB (which doesn't want to be in this particular lending game to begin with) is going to give them more money. If Greece can't persuade the EC, IMF, or ECB to lend them more money, it's doesn't look like they can just walk away from this whole scenario. "Oh well! Debt is just politics and morality!" That might be true, but if they want to allow people to retire in their early 60s, or pay half the nominal tax rate, or not regressively tax the poor through punishing VAT increases, they're going to need to convince someone in the world of some kind of compatible morality, right? They require additional financing, don't they?
  - twobits 11y ago
    No, the greeks don't demand more money. They want to make the debt viable, in order to be able to pay it.
    - tptacek 11y ago
      I don't understand. Aren't the terms the Greeks are negotiating over additional financing from the EC, ECB, and IMF?
      - atmosx 11y ago
        He has a point actually :-) Varoufakis does not accept the 7.2 billion of "aid" under current conditions because he believes that Greece has an insolvency problem and not a liquidity problem. The current hovernment wants to add at least 30% debt reatructuring (which Germany says it s off the table) and pay back only when reasonable primary surpluss has been achieved.
  - 11y ago