NFT: Greece is broke

In comment 12347577 kicker said:

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in 26% lower tax receipts. And no large scale civil movements against this; this type of "corruption" is largely seen as a cost of doing business in Greece.

Are you sure it's not a higher percentage? A while back (last year) I read a 40% number with respect to tax receipts. Perhaps they stepped up enforcement at least to a degree since then.

In comment 12347236 Eric from BBI said:

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Greeks are a lost cause. If the EU wants to survive, they need to dump them. It's going to happen sooner or later anyway.

Totally agree. Been saying this for a while. Syriza are one problem. It is Podemos who tower over this situation because if they get in in Spain then shit will get real fast. That is not a 5% correction to an already high market.

There is a school of thought that the EU has to show the Spanish and others the consequences of the Greek's actions. The risk with that is an Iceland style rapid revival makes the Greece option look appealing.

In comment 12347758 njm said:

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In comment 12347577 kicker said: Quote: in 26% lower tax receipts. And no large scale civil movements against this; this type of "corruption" is largely seen as a cost of doing business in Greece. Are you sure it's not a higher percentage? A while back (last year) I read a 40% number with respect to tax receipts. Perhaps they stepped up enforcement at least to a degree since then.

That was solely income tax, and not other taxes as well.

everyone says that Greece s problem are because citizens did not not paying income tax -

rather than the Global financial meltdown of 2008 which causes all economy in the world to contract and then the imposed austerity by the Trioka which has cause Greece GDP to contract 25% in 5 years

the problem isn't Greece not paying their debt
the problem is freaking 28% unemployment
the probem is 60% youth unemployment

In comment 12348301 giantfan2000 said:

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everyone says that Greece s problem are because citizens did not not paying income tax - rather than the Global financial meltdown of 2008 which causes all economy in the world to contract and then the imposed austerity by the Trioka which has cause Greece GDP to contract 25% in 5 years the problem isn't Greece not paying their debt the problem is freaking 28% unemployment the probem is 60% youth unemployment

at 1:20 am Manh George said: "...Greece has practically nothing to sell that anyone anywhere else in the world wants, other than tourism."

The lack of industry equates to unemployment - so your point, while valid, has already been covered here at least in part.

You are correct to highlight it however as it has been glossed over quite a bit on this thread.

Part of the solution is to improve tax collection, and another, more important part of the solution is to increase employment levels, particularly among the youth.

Job creation requires a lot more than protesting for more jobs however, a fact that many people in the U.S. and abroad seem blind to. We often assign the blame for high levels of youth unemployment on policy, when the reality is that most youth today (in the U.S. and abroad) are not skilled enough to be employable. I don't know enough about Greece to label their youth as unskilled, but I can say that there is global demand for laborers with specific skill sets.

You're correct. The root problem is that Greece has a third world economy yet wanted a first world lifestyle - and that dog don't hunt.

This will all shake out painfully for Greece - economically, politically, socially and psychologically. The whole country is being exposed as a fraud and laughing stock in a very public and humiliating way.

the more I'm convinced that the only way out is a default/restructuring (everyone agrees that Greece pays back less than they actually owe) and an exit from the Euro. I have no idea how that sausage gets made but it has to happen, IMO.

whose root causes lie in a lack of competitive advantage and excessive debt.

Anyone that blames Greece's problems on austerity is a simpleton with an eye toward politics, not economics.

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Anyone that blames Greece's problems on austerity is a simpleton with an eye toward politics, not economics.

Yes you are the expert Rob!
you still got that gold under your bed ??

their economy was debt-fueled at its height, the bill was going to come due sooner or later. In the last 20 years, they cracked the Maastricht 3% just once (by cooking the books) so as to gain entrance into the EU. Unemployment, particularly youth unemployment, is a symptom of much wider structural features, not their cause. If your point is that there are other villains, sure. But if your point is that this was a healthy economy groaning under the back to back hits of recession and then austerity, that's simply not hte case.

In comment 12348454 giantfan2000 said:

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Quote: Anyone that blames Greece's problems on austerity is a simpleton with an eye toward politics, not economics. Yes you are the expert Rob! you still got that gold under your bed ??

Homerjonesredux was the gold bug, ace. I can honestly say I have never commented on precious metals, or any other directly investable asset, as I feel this isn't the forum for it. Try again?

Bear in mind, no matter how you deflect, you are still dead fucking wrong on this topic.

Robbed it off a lever to pull in these circumstances - devaluation. Forty years ago, this would have been a minor event for currency traders, painful for Greece in the short-term (Argentina's GDP contracted some 10 percent in the wake of its devaluation), but the concept of contagion would be completely foreign.

Greek drachmas to invest in Zimbabwe dollars.

One of these days I'm going to cash that in.

They went into austerity because their problems were so bad. Years and years of government over spending gone amok. The social system, lack of private jobs, ridiculous govt pensions, and the complete lack of fiscal responsibility is what brought them here.

Macro and Micro econ dont work the same way. Yes, in some sense the dynamics are similar: If you spend what you dont have, youll wind up broke.

But the entire Macro system is built on trust and credit, not actual money in the bank. What austerity does is essentially confuse these two realms, forcing a national treasury (a public institution responsible for the welfare of citizens, not profit making), operating on the Macro level, to adhere to micro rules. Under austerity, a treasury that is responsible for welfare and public services is restricted from providing these services. Innocent people suffer as a result.

This does not excuse Greece's ineffectual (invisible?) tax collecting machinery and irresponsible fiscal policy. However, one might argue that these policies need to be reformed along side debt relief.

A Keynesian would say that when the economy stumbles, public spending and services need to increase in order to account for the drop in activity/ demand left by struggling private sector. The time for austerity and belt tightening is during boom times, when economies can cut back on their own terms.

A classical econ student, who sees the macro and micro realms operating in closer relation would advocate riding the boom wave all the way to the top, and then tightening belts when the going gets tough, similar to how a private household would behave.

it's that he is often misapplied, and that in these applications people often ignore Keynes's own cautions. They were already running substantial deficits during boom times, it isn't clear that additional money would have really improved things. And Greece's issue is not a lack of government spending.

can someone explain to me in elementary terms whats wrong with Greece? I know they are broke but how did it get to this point?

i mean thinking like a 10 year old, they are a tourist hot spot and should bring in outside money. Is this not the case?

dont kill me but i just want to understand this good.

In comment 12348818 GMAN4LIFE said:

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can someone explain to me in elementary terms whats wrong with Greece? I know they are broke but how did it get to this point? i mean thinking like a 10 year old, they are a tourist hot spot and should bring in outside money. Is this not the case? dont kill me but i just want to understand this good.

Tourism is quite substantial, but the Euro made (makes) tourism more expensive and undermines the advantage Greece had as a relatively inexpensive destination depending on the ebbs and flows of exchange rates. And Greece makes very little other than olive oil. They have an outsized role in merchant shipping, but that's about it. And they have a huge public sector, huge legacy costs from past public sector workers, and their tax collection is a joke.