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The underlying assumption in the German "NO" to Greek pleas of debt relief is the "moral hazard" of writing off a country's debt just because they cried really
by tomp 11y ago
The underlying assumption in the German "NO" to Greek pleas of debt relief is the "moral hazard" of writing off a country's debt just because they cried really hard.
Why don't we talk about the moral hazard of writing off a country's debt after they kill 60 million people?
- tedunangst 11y agoWell, as part of their debt relief, Germany got a new government. Is that what Greece wants?
- tomp 11y agoGreece has a new government. One that has no connection with either the thieves that caused the problem in the first place nor the incompetent idiots that didn't solve it in the last 5 years.
- tedunangst 11y agoWikipedia tells me the Greek constitution dates to 1975. Is that wrong?
- peterfirefly 11y agoA constitution under which it is illegal to fire state workers unless by law!
- fwn 11y agoUnless by law? Well, at least that one isn't a problem for a government.
- peterfirefly 11y agoYes it is. Laws require debate and public voting in Parliament which exposes many/all members of the governing coalition to lots of bad press, which is /so/ unfair since all they really wanted was to get reelected and, honest, they didn't want to be a bother to anyone.
- fwn 11y agoYou can make it a general law with a different focus and then you alter it with a court. This is a non issue in contemporary democratic procedures.
- mike_hearn 11y agoWha?! Their new government has doubled down on the bad policies that led Greece to this state. It absolutely DOES have a strong connection to the people who caused the problem - they were put in power because the Greeks turned their back on the previous government that was at least trying to go along with the required reforms.
- tomp 11y agoWell, I guess that depends on your perspective of the reforms... IMO, the required reforms, and austerity in grneral, were all wrong (as in, unrealistic and economically unsound).
- TillE 11y agoThis is the new government. They were not in charge in 2010, they did not cause the crisis.
- jqm 11y agoFrom the perspective of lending, it doesn't matter if a borrower is church attender, a drug dealer, beats his kids, or goes to work half an hour early every day. It is simply a matter of perceived ability to repay. Germany, especially after complete restructuring following the war was manifestly a decent credit risk. Greece is another story. The moral arguments in this scenario are just noise.
- alexqgb 11y agoNever forget that the term "moral hazard" has—until very recently—referred to policies that increase the dangers posed by reckless lenders. The realization behind this expression was that the existence of an onerous collections regeime would tempt creditors into making otherwise indefensible loans. I won't say the victims of predatory lending have a moral obligation to default, since this could get them killed. But in the absence of good government, this is the only way to drive predatory lenders out of existence. And yes, good governance includes making life unprofitable for loan sharks.