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This guy is a reknowned economist? He's conflating "war reparations" with "external debt", and also seems to have missed the big fanfare recently when Germany p

by vacri 11y ago

This guy is a reknowned economist? He's conflating "war reparations" with "external debt", and also seems to have missed the big fanfare recently when Germany paid the last of it's WWI reparations - instead he claims they never paid any WWI or WWII reparations. Similarly, 'England took 100 years to repay' he claims as the way forward, yet ignores that Germany took 92 to pay their WWI debt[1]. Not hard, I guess, since he thinks that there was no repayment at all. He also talks of Germany's post WWII debt completely independently of the Marshall Plan and the Allies pouring money in to counter the Soviets. This is clearly just an axe being ground. [1]http://www.dailymail.co.uk/news/article-1315869/Germany-end-World-War-One-reparations-92-years-59m-final-payment.html http://www.dailymail.co.uk/news/article-1315869/Germany-end-...

Aloha 11y ago
Germany was given a significant discount on its external debts in 1960, and very generous repayment terms. "The total under negotiation was 16 billion marks of debt resulting from the Treaty of Versailles after World War I which had not been paid in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the U.S., France and Britain. Another 16 billion marks represented postwar loans by the U.S. Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact. An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction." [1] [1]https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts https://en.wikipedia.org/wiki/London_Agreement_on_German_Ext...
- vacri 11y ago
  "Making 50% of the reparations" is considerably more than "never paid their debts", and while on favourable terms, we're also talking about half of Germany doing this - the country was torn in two, and was at the pointy end of the Cold War. Forgiveness of some of the debt has also been part of the Greek proposals. It's not like debt forgiveness is unique to the German situation. Pretty much any time some entity is in risk of default, there'll be some degree of debt forgiveness; cue news stories of "creditors getting 30/50/70 cents on the dollar". Keep in mind also that Germany underwent massive social changes as part of their recovery process - it certainly wasn't 'business-as-usual'. That Germany managed to do so well speaks to the industriousness of German culture, not that they were 'let off lightly'. If Greece gets handed money without significant reforms, what will be some fundamental social, political, or cultural differences between 2010 Greece and 2020 Greece?
csallen 11y ago
> He's conflating "war reparations" with "external debt" War reparations are a type of debt. The terms aren't mutually exclusive. Nor is Piketty saying they are the exact same thing. I fail to see your point here. > instead he claims they never paid any WWI or WWII reparations. Where did he say never paid "any"? He very clearly outlines two methods of eliminating debt, and makes the case that Germany used the very method that it is now denying Greece. Your post seems very straw-mannish.
- vacri 11y ago
  > The terms aren't mutually exclusive. 'Conflate' doesn't mean that the terms are supposedly mutually exclusive. > Nor is Piketty saying they are the exact same thing. The only example of 'external debt' Piketty is talking about is war reparations. There is nothing else suggested there - it's all war reparations. That's not the same kind of debt as the debt that Greece faces. War reparations are an arbitrary debt anyway, only paid by losers. Where are the war reparations the US is paying Iraq for storming in and destroying everything? Germany doesn't shoulder sole responsibility for WWI; they simply lost, so the other guys got to demand payment. It's not like Germany exchanged that debt for goods or services rendered, living beyond their means. And even when the war reparations were being decided on, there were plenty of people on the victor's side saying "whoah, this is ridiculous!". What does it mean to be accused of 'not paying your debts' when even people on the other side are calling for the arbitrary punitive measures to be smaller? > Where did he say never paid "any"? True, he didn't say 'any', but there's still plenty of other problems in what he's saying - such as the timeframes for repayment. And there is zero mention of any of the other political factors involved, such as staving off the Soviets. The situation that postwar Germany is in has little to do with modern-day Greece. -- Edit: Another thing that doesn't show up on the balance books in the aftermath of a world war is the redrawing of borders. After both world wars, Germany had it's borders redrawn, and disasterously in the case of WWII. Also, in addition to the financial debt from war reparations, after WWI, Germany had it's colonial holdings stripped. Neither of these two things are anything like what's happening in Greece at the moment.
Daishiman 11y ago
Germany's reperations were cut subtantially from the baseline, and he did not claim what you are saying, at all. You're exemplifying Dunning-Kruger at its maximum: critiquing a world-renowned economist who wrote an 900-page book on the state of income inequality of this century as someone who wouldn't be aware of the history of European debt relief. Get a grip.
deleted 11y ago
[deleted]

by vacri 11y ago

Aloha 11y ago

Germany was given a significant discount on its external debts in 1960, and very generous repayment terms. "The total under negotiation was 16 billion marks of debt resulting from the Treaty of Versailles after World War I which had not been paid in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the U.S., France and Britain. Another 16 billion marks represented postwar loans by the U.S. Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact. An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction." [1] [1]https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts https://en.wikipedia.org/wiki/London_Agreement_on_German_Ext...

vacri 11y ago
"Making 50% of the reparations" is considerably more than "never paid their debts", and while on favourable terms, we're also talking about half of Germany doing this - the country was torn in two, and was at the pointy end of the Cold War. Forgiveness of some of the debt has also been part of the Greek proposals. It's not like debt forgiveness is unique to the German situation. Pretty much any time some entity is in risk of default, there'll be some degree of debt forgiveness; cue news stories of "creditors getting 30/50/70 cents on the dollar". Keep in mind also that Germany underwent massive social changes as part of their recovery process - it certainly wasn't 'business-as-usual'. That Germany managed to do so well speaks to the industriousness of German culture, not that they were 'let off lightly'. If Greece gets handed money without significant reforms, what will be some fundamental social, political, or cultural differences between 2010 Greece and 2020 Greece?

csallen 11y ago

> He's conflating "war reparations" with "external debt" War reparations are a type of debt. The terms aren't mutually exclusive. Nor is Piketty saying they are the exact same thing. I fail to see your point here. > instead he claims they never paid any WWI or WWII reparations. Where did he say never paid "any"? He very clearly outlines two methods of eliminating debt, and makes the case that Germany used the very method that it is now denying Greece. Your post seems very straw-mannish.

vacri 11y ago
> The terms aren't mutually exclusive. 'Conflate' doesn't mean that the terms are supposedly mutually exclusive. > Nor is Piketty saying they are the exact same thing. The only example of 'external debt' Piketty is talking about is war reparations. There is nothing else suggested there - it's all war reparations. That's not the same kind of debt as the debt that Greece faces. War reparations are an arbitrary debt anyway, only paid by losers. Where are the war reparations the US is paying Iraq for storming in and destroying everything? Germany doesn't shoulder sole responsibility for WWI; they simply lost, so the other guys got to demand payment. It's not like Germany exchanged that debt for goods or services rendered, living beyond their means. And even when the war reparations were being decided on, there were plenty of people on the victor's side saying "whoah, this is ridiculous!". What does it mean to be accused of 'not paying your debts' when even people on the other side are calling for the arbitrary punitive measures to be smaller? > Where did he say never paid "any"? True, he didn't say 'any', but there's still plenty of other problems in what he's saying - such as the timeframes for repayment. And there is zero mention of any of the other political factors involved, such as staving off the Soviets. The situation that postwar Germany is in has little to do with modern-day Greece. -- Edit: Another thing that doesn't show up on the balance books in the aftermath of a world war is the redrawing of borders. After both world wars, Germany had it's borders redrawn, and disasterously in the case of WWII. Also, in addition to the financial debt from war reparations, after WWI, Germany had it's colonial holdings stripped. Neither of these two things are anything like what's happening in Greece at the moment.

Daishiman 11y ago

Germany's reperations were cut subtantially from the baseline, and he did not claim what you are saying, at all. You're exemplifying Dunning-Kruger at its maximum: critiquing a world-renowned economist who wrote an 900-page book on the state of income inequality of this century as someone who wouldn't be aware of the history of European debt relief. Get a grip.

deleted 11y ago

[deleted]