Greece

Thanks for Democracy, Greece, But Don't Let the Door Hit You on the Way Out of 1st World!

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So the Syriza has won the recent election in Greece and its leader, Alexis Tsipras, has vowed to stand against the "vicious cycle of austerity" foisted on the country by its creditors. And by the general guidelines of the European Union (EU), which insists that its members at least pretend to be serious about being able to their governments' books.

It's always nice to see a country peacefully change governments, especially when the incoming group apparently represents the will of the people. Nicer still to see it happen in Greece, the country that in many ways birthed the notion of representative democracy and has a long history of autocratic regimes and often violent protests.

But don't be fooled for a minute that anything happening in Greece has to do externally imposed "austerity" programs. The problems with the Greek economy stem from a basic, simple fact of ecoonomcs: Eventually the bill comes to due. You can't continue spending money you don't have, especially when you're a small economy that has to borrow dough from other, larger places. The homeland of Sophocles going bust and possibly being kicked out of the EU isn't a Greek tragedy. It's a sign that there is some order in the universe.

Recall the reasons for Greece's dire straits: Not simply years but decades of wildly unbalanced spending that culminated with debt representing almost 200 percent of the country's economy. The EU's basic rule is that countries are not supposed to have debt that amounts to more than 60 percent of GDP and the organization's regulators stupidly turned a blind eye to that. The idea of keeping debt to GDP at lower levels is not simply some sort of Nordic puritan fetish; it's a sign that a country is neither taxing nor spending too much and it also means that if and when a crisis hits (as they do from time to time), a nation will have more options in responding, including taking on debt in the short term.

Even the leftwingers at University of Massachussetts agree that large, persistent deficits and subsequent national debt correlates with slower growth and reduced outputs over time. Ironically, they came to that conclusion while critiquing the "debt overhang" theory of Carmen Reinhart and Kenneth Rogoff in 2013.

Researchers affiliated with the University of Massachusetts at Amherst discovered a coding error in Reinhart and Rogoff's data, re-ran the numbers and concluded "the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent."

Which is to say that U Mass folks came up with numbers that correspond almost exactly to what Reinhart, Rogoff, and Vincent Reinhart found in their April 2012 paper, "Debt Overhangs: Past and Present." Looking at 26 debt overhangs in 22 advanced economies since 1800, "The authors find that on average, debt levels above 90 percent are associated with growth that is 1.2 percent lower than in other periods (2.3 percent versus 3.5 percent)."

The election of an "anti-austerity" government in Greece will reignite debates over "austerity measures" in response to recessions and other economic downturns. Hopefully this time around, the debate will be more grounded in actual policies and a clear distinction about the forms of austerity. Broadly speaking, austerity measures refer to a government trying to reduce deficits by cutting spending, raising taxes, or some combination of the two as a way of reducing its debt-to-GDP ratio. There is, however, a huge difference between which path is taken. Cutting governmet spending tends to have better results than raising taxes or a combination of spending cuts and tax hikes. As Reason columnist and Harvard's Alberto Alesina, who co-authored a major study on austerity in 2013 for the Mercatus Center, wrote in Forbes:

"Austerity" implemented through tax hikes is harmful, but austerity based on appropriate spending cuts is the best way to reduce a country's public debt burden. Implementing pro-growth reforms as part of the fiscal adjustment process can minimize any economic cost that budget cuts may have. This is especially important in the case of highly regulated economies where the government spends about half of its GDP….

Which incidentally describes Greece.

It's easy to understand why increasing taxes during a downturn exacerbates problems. Such a move sucks money out of people's pockets and puts it in the hands of government, which at its best is going to lose some of it in simple bureaucratic waste. But there's more to why fiscal adjustments made up of mostly or all spending cuts can sometimes (not always, but sometimes) counterbalance a downturn or even be expansionary. Alesina and de Rugy write:

The standard explanation is that lower spending reduces the expectation of higher taxes in the future, with positive effects on consumers and investors….spending-based fiscal adjustment accompanied by supply-side reforms, such as liberalization of markets for labor, goods, and services, readjustments of public sector size and pay, public pension reform, and other structural changes tend to be less recessionary or even to have positive economic growth. Such reforms signal a credible commitment toward more market-friendly policies: less taxation, fewer impediments to trade, fewer barriers to entry, less union involvement, less labor market and business regulation.

This argument is supported by a wide range of examples, including Japan in the 1980s, Canada and Sweden in the 1990s, and Germany in the mid-2000s. Needless to say, Greece's austerity measures were accompanied by effectively no serious structural reforms in a country that was always far more generous in its benefits than even other EU members.

The full paper is worth reading, as is de Rugy's work on how "balanced approaches" to austerity (that is, combing tax increases and typically mild spending cuts or reductions in the rate of spending increases) don't work.

When it comes to Greece, it's worth remembering that its economy has been in crapper for a long time, even before the financial crisis hit. By most accounts, the creditor nations in the EU have wisely spent the past few years insulating themselves from the inevitable collapse of the Greek economy and the government's default. Which means it may well finally be time to say ????????? and ???? ????! to the birthplace of democracy.

NEXT: WATCH: This Impoverished City Hiked Spending to $25,000 per Student to Fix Its Schools. And Nothing Changed.

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  1. This is what I don’t get. I keep seeing these guys described as “anti bailout”. What the fuck is that even supposed to mean? Do they think they’re keeping the Germans’ heads above water, or something?

    1. Their stated plan is that if they tell Germany that they’re not paying back the money Germany lent them, Germany will be forced to just give them money with no strings attached.

      What I can’t figure out yet is if Syriza is stupid enough to actually believe this or just thinks Greek voters are.

      1. Not quite. These idiots believe that repayment of the bonds is a “bailout” of the banks so Greece should just default and spend that money on social programs.

        1. “These idiots believe that repayment of the bonds is a “bailout” of the banks so Greece should just default and spend that money on social programs.”

          Holy shit, really?

          Yeah, that default won’t possibly have any negative consequences on Greece’s future economic growth.

        2. In a certain sense, this isn’t entirely untrue. The German banks are the major creditors of the Greeks. Of course, what that misses is the fact that, without their banking system in the game, the Germans really don’t have any reason whatsoever to really give a fuck what happens to the Greeks. The Greeks default on their debt and the gravy trains stops.

          1. That is the jist of what I said. How is it partly untrue?

            1. These idiots believe that repayment of the bonds is a “bailout” of the banks…

              That isn’t entirely either true or untrue. It is also a “bailout” of Greece.

              1. Not from the leftist perspective.

  2. But Cheney said “Reagan proved deficits don’t matter”!

    1. And Obama was stupid enough to believe Cheney??

        1. His actions say otherwise.

      1. That $7.4 trillion in total debt accumulated over the last six is just a figment of your imagination!

        1. A result of trillion dollar plus Bush deficits that Obama has cut by 2/3rds.

          1. Re: Peter Caca,

            A result of trillion dollar plus Bush deficits that Obama has cut by 2/3rds.

            It wasn’t Obama who cut the deficit. It was Congress.

          2. Math isn’t your strong suit, is it. A deficit is the first derivative of debt. An accumulated debt over the last six years is the integral of that over Mr. Obama’s administration. By definition, it excludes Mr. Bush’s tenure.

            1. Facts are not your strong suit. It was Bush policy that created the deficits and debt since Clinton left an annual surplus.

              The Obama $800 billion stimulus excepted.

              1. To accept your version of events, one has to assume that deficits (additions to the debt) during Mr. Obama’s tenure are Bush’s fault. You may be that stupid. The rest of us aren’t.

                1. It’s not sentient, therefore it doesn’t believe anything.

                  To believe an idea you must be cognitively capable of comprehending it. It’s not capable of anywhere that level of cognition.

          3. Lol, Obama has not cut shit. Spending more that happens to be slightly less than what you thought you were going to spend is not a cut.

    2. Hahahahahahahhahahahahahahahahahaha

  3. “vicious cycle of austerity” foisted on the country by its creditors

    Standing against the “vicious cycle” of anything with the people you owe money to is always a pro strategy.

    1. Yeah, guess you’d have to be a leftwing socialist deadbeat to understand where they’re coming from. “They won’t lend us money we can’t pay back, and we’re not gonna take it anymore!”

      1. Well put.

  4. Greece is already third world. Next stop: Venezuela.

    1. VZ is already third world. Clorox and other US companies are pulling out.

      1. You misunderstood my point.

        1. You think actually understands anything?

          1. Good point.

        2. There’s a shocking development.

          1. Butthurt shriek is butthurt.

            My point was that Venezuela is the bottom of the barrel even among third world nations, and that’s where Greece is heading. Now try and read for comprehension, dipshit.

            1. Venezuela’s actually near the bottom of the barrel. To really start scraping that, I present to you – Zimbabwe.

              1. I said the same thing.

                No, you didn’t.

            2. One key difference:

              As long as Greece remains in the EU, it can’t print money for itself to fund its lavish deficits.

    2. When the government collapses, along with the economy, the socialists will all say, “See how bad austerity and freedom are?”

  5. …which insists that its members at least pretend to be serious about being able to their governments’ books.

      1. Cutting governmet spending

        1. Leave Gillespie alone. It’s not like he’s an editor or anything.

          1. I assume they’re just smoking pot at work. In which case, more power to them.

        2. As Reason columnist and Harvard’s Alberto Alesina

          I’m guessing Veronique should be after Columnist.

  6. The New Drachma is gonna make Greek vacations a real bargain.

    1. I hope you like molotov cocktails.

      Because the rioting that is going to follow when the Greek lumpen-proletariat realizes Syriza’s “plan” puts them in even deeper shit is going to make what has gone before look like a debutante ball.

  7. BOOOOOOOOOOOOOOOOOOOOSH‘s fault.

    Of course.

    1. NO FAIR! THE GOP WILL CUT SPENDING NEXT TIME! EVEN THO THEY NEVER HAVE!

      1. CHRISTFAGS!!!!!!!
        KOCHTOPUS!!!!!!!

        1. ABCDEFGHIJKLMNOPQRSTUVWXYZ

          Or perhaps more in today’s spirit …

          ACBEFDGIKSHUIQPRTCUUZ

  8. Maybe the Greeks can sell what’s left of the Parthenon. The British Museum could complete their set.

    1. As a bonus, it would be better cared for in the British Museum than in Athens.

      1. Until their Muslim infestation destroys it, and the West continues to ignore the choice that faces us.

        1. In that case, let’s leave it outside Athens, where feral dogs can piss on it instead of feral Muslims.

          1. You vastly underestimate the number of feral Muslims in Greece.

            http://en.wikipedia.org/wiki/Islam_in_Greece

  9. insists that its members at least pretend to be serious about being able to their governments’ books.

    I’ll go with, “What is ‘balance’ Alex.”

      1. Howzabout “ignore”?

  10. These people are so retarded its amazing. They have run out of other people’s money. The rest of the Euro zone isn’t giving them any more money or helping them with their debt without them agreeing to austerity. There is no money there. And since they don’t own the Euro, they can’t just print more.

    If they want to leave the Euro and start printing Drachmas again, good luck. Then all of the pensioners and welfare queens can get their checks, that is true. Of course the checks won’t be worth anything thanks to inflation.

    The best part is that the leftists have promised to pull out of NATO and virtually eliminate the military. So not only are they out of other people’s money, they are not even going to have a military to go out and steal it. Let them do that and maybe ISIS can start its reconquest of Europe there. The Greeks may be broke, but they probably offer a ready supply of Infidel sex slaves.

    1. Not really: “rest of the Euro zone isn’t giving them any more money or helping them with their debt”
      I’m sure you’ve heard the old joke about “when you borrow a little, the bank owns you. when you borrow a lot, you own the bank.” You can bet the German banks will be re-structuring this deal to kick the can down the road a few more years.

      1. Sure they can always threaten default. But if they start spending again, that threat doesn’t work anymore. You can only extort money from the Germans if them giving you more of it actually prevents you from defaulting. IF they end austerity, the jig will be up. The rest of Europe will realized they are screwed and the money is gone and will finally stop sending good money after bad.

        The Leftist plan seems to be to try one more time to extort some money out of the rest of Europe. It is doubtful that there is much more money to be extorted. So one of two things is going to happen. Either they will get a little more money but ultimately act reasonably and grossly disappoint their supporters or they will get their bluff called and be forced to leave the Euro and the whole place ends up like Zimbabwe.

        1. Especially if they leave the Euro. What incentive is there for Europe to help them if they’re no longer part of the Eurozone? The only reason Europe bailed out Greece was because a total collapse would have damaged the Eurozone, but if Greece leaves then why bother helping them?

          1. None. If they leave the Euro zone, Europe can shut the borders and prevent a refugee crisis.

            The other thing is what would happen to the no doubt large numbers of Greeks who are working in Europe. Do they get deported if Greece is no longer part of the Euro? Get to stay as citizens of wherever they are?

            1. Eurozone != EU; there are already countries that enjoy the same freedom of movement/employment that don’t participate in the euro, so it’s not clear that would matter. Unless Greece is talking about an actual EU exit, which I have not heard.

              1. yeah, the UK and Czech Republic are in the EU but not on the Euro. Yeah, that is a good point.

                1. I’m thinking a 1M Drachma note will be an inexpensive souvenir in a year or two.

      2. I do not think it is a given that the Germans are down for any more of this crap.

  11. Well, based on Greece’s history, the only thing that’ll save them now is being invaded by Macedonia.

    1. Now that would be a stimulus!

      /Krugderp

    2. Which we will take as proof of the growing Islamic threat, and proceed to invade Greece to stop them. Sounds like fun.

      1. Don’t give Cytotoxic any ideas please

        1. His cognitive dissonance on the threat of Islamic radicals and his complete commitment to open boarders is endlessly entertaining.

          To Cytoxic, any Muslim in the world is more or less a proper target for fire bombing because they are such a threat. Yet, those same Muslims have an absolute right to immigrate to the US and once here will become liberty loving patriotic citizens.

          Cytoxic might be the only pro open boarders, paranoid anti-Muslim guy in the world.

          1. ^ This. He has yet to effectively explain to me why it is imperative that we drone kill terrorists in Yemen, but should simultaneously allow infinite immigration from Yemen to Western countries.

            Apparently they magically stop being terrorists the instant they hit the European border.

            1. To Cytoxic, any Muslim in the world is more or less a proper target for fire bombing because they are such a threat.

              ITT, retards.

              It’s called freedom. We can filter the immigrants as they reach our shores, a task that can only be achieved with open borders. Only with an open immigration system can you have immigrants go through proper controls instead of walking across the desert. In any event the Hebdo shooters were born in France.

          2. Isn’t he. . . . . . . . Canadian?

            ‘nuf said.

            1. From Alberta and hates driving.

              1. His master-plan is to get the canadian muslims to emmigrate to US, then close the borders.

                3-D checkers, bitchez!

        2. I’d be rooting for Macedonia. Did you know Greece has an asspain over Macedonia’s name? Bush’s first act upon re-election was to recognize Macedonia as Macedonia.

  12. “Austerity” implemented through tax hikes is harmful, but austerity based on appropriate spending cuts is the best way to reduce a country’s public debt burden. Implementing pro-growth reforms as part of the fiscal adjustment process can minimize any economic cost that budget cuts may have.

    I’m not expert on Greece per se, but they may be saddled with cultural issues that call any of this into question.

    Generally speaking, if you lower tax rates and generally free up an economy, money and innovation flow more freely generating some modicum of economic growth. The more money in people’s pockets, the more they’ll invest and spend in things that spur on economic activity which in turn, stimulates growth.

    But what of countries like Greece? Countries which have had what, two, three generations of cradle-to-grave welfare systems where it’s possible that any spirit of investment and entrepreneurial spirit has essentially atrophied.

    I guess I’d fear that if you cut government spending (welfare, short work weeks, pensions, lavish UE benefits) that the Greek people would continue to, you know, just sort of sit around.

    1. Cut them off the dole and they will figure it out. People always respond to incentives. And there is more work and business going on there than you think. It is just under ground. I guarantee you that a bunch of those pensioners and such work for cash or run businesses on the side. They haven’t forgotten how to work.

    2. I know an American Greek businessman who has family still living i Greece and fucking hates those people.

      Every negative stereotype you have about someone just hanging out on the dole is true of a large proportion of the Greek populace. They’re desperately trying to cling to that fabled 50 year old retirement age.

      That’s not a myth, by the way. People like pastry chefs, for example, are allowed to retire at 50 on the grounds that their work might cause them later life respiratory problems.

      1. Like I said, cut them off and they will figure it out.

      2. Greece – If Camden Were A Country.

      3. My favorite is that radio and TV announcers get to retire at 50 because of the danger of bacteria on microphones. It’s hazardous work, just like firefighting and coal mining!

      4. And I am hoping that my “early retirement” opition is to be let out of the r?sti mines at age 66.

      5. From a Greek friend – he says that anyone with half a hope of a future – think, under 35 or a few bucks in your pocket – has already left Greece for anywhere else in euroland or beyond.

    3. That’s why they need mass immigration to change their culture, and possibly the Greek state needs to be disintegrated.

  13. Maybe the Greeks can sell what’s left of the Parthenon.

    They should ask the NFL for a team. I hear they already have a stadium constructed at vast taxpayer expense.

    1. Win!

  14. I viewed the vote as a protest vote more than anything else. The same two parties — what’s considered center-right and center-left in Europe — have ruled Greece since the last military junta was forced out in 1974. All of the poor decisions Greece has made since 1974 can be laid at those parties: joining the Eurozone and abandoning the drachma, hosting the Olympics, the out-of-control expansion of the welfare state to cover up for poor economic planning, etc.

    The voters had a choice between continuing with the parties that had miserably failed them, a new centrist party saying the same shit that the old ones were saying, an ultra-nationalist party and the far-left Syriza. It’s little surprise they chose the way they did.

    1. And the ultra-nationalist party made gains too. Basically the voters fled the middle.

  15. The solution, of course, is to make Greece a giant theme park.

    1. +1 measles outbreak

    2. is it not already? with olive oil water slides?

      1. It’s long had some aspects of a theme park, but it’s never had the firm, four-fingered hand of the Mouse guiding it.

        1. The Greek national bird is a bird that’s on fire.

          1. Well, that’s got to go. They need a more family-friendly mascot. Like a Disney Hercules.

  16. Don’t worry, I just had a conversation with somebody who insisted that SYRIZA, despite being an acronym that means “Coalition of the Radical Left” with members that openly self-identify as communist, Maoist, Marxist, Trotskyist, eco-socialist, etc., etc., etc., is not actually far-left and that even Krugman refers to their policies as “conventional economics”. He said that “austerity has done measureable damage to Greece”, I said that raising debt from 127% of GDP to 177% over 5 years means there has been no austerity.

    He re-iterated that , I replied: “OK, Pol Pot” and took my leave.

    So, yeah. Greece. They’re in good hands, obviously.

      1. The editing job is about as good as Gillespie’s.

        1. Yeah, too bad I’m not getting a solid six figures to comment here like he is.

    1. The Washington Post comments on this were funny, because the top-rated comment was a long whine about the reporter using the word “radical” which was editorializing and untrue and blah blah blah. Way down was a reply pointing out what their name meant.

      1. Yeah, the “reality-based community” up to their usual tricks. If the constituent parties of SYRIZA and the name itself don’t scream radical left… well, you can see why I just called him Pol Pot and stopped wasting my time.

  17. The rhetoric of the new prime minister (or is it President?) of Greece is pretty similar to the last guy’s.

    They’re Greek; they talk a big game then totally fold under pressure.

    There are no easy answers for them and everything they choose will be painful. I predict the stay in the Euro and ‘restructure’ again – for the 3rd time. The Germans will throw them a bone by allowing bond debt restructuring (again) – lather, rinse, repeat.

    1. That is my guess too. They will extort a bit more money out of Europe but austerity will largely go on because it has to. The alternative is to leave the Euro and start printing money which will turn the place into Zimbabwe.

      Never underestimate the stupidity of leftists. They might just be this stupid. I, however, think they probably are lying and will fold.

      1. Yeah, the Greeks have two contradictory goals: 1) keep their version of the welfare state (don’t do austerity) and 2) Stay in the Euro while maintaining ‘independence’.

        They should totally leave the Euro and re-introduce their own currency and default on their bonds, but that would require actual real austerity – not the fake kind they’ve been doing.

        If they want real independence they must have austerity. If they want the welfare state they must stay in the Euro.

        1. In other words, they have ran out of other people’s money. That is really all there is to it. You can’t have a society where everyone retires at 50 and no one has to work if they don’t want to.

          The entire leftist experiment from Marx on has been one giant hideous exercise in denying that there is no free lunch.

          1. “The entire leftist experiment from Marx on has been one giant hideous exercise in denying that there is no free lunch”

            QFT

          2. Not exactly. Up until Stalin or so it was all about eternal servitude to provide free lunchs to others.

            Eventually they figured out that most people didn’t like the servitude aspect of it, and they swithed to just free lunches for everyone.

  18. Well, I’ve manage to live long enough to see the birth and the death of the Euro.

    1. Were you in doubt this would happen, or are you terminal and thought it would outlive you by a few months?

      1. I thought it would last longer than 20 years.

        1. you missed some cynic pills along the way.

          It’s lasted much longer than expected. It will last as long as the german people put up with subsidizing the lifestyles of the Mediterranean.

          1. you missed some cynic pills along the way

            There are enormous benefits to businesses in the Eurozone from having a common currency.

            Some version of the Euro may survive if the union is quick to push out the PIIGS.

            1. There are enormous benefits to businesses in the Eurozone from having a common currency.

              It’s an enormous and crippling detriment to have that common currency be a fiat currency issued by a central banking cartel.

              1. Yeah. Those benefits are all-short term while the negatives are massive and long-term.

          2. There’s still a few ounces of Nazi gilt to extract.

          3. They’re likely to put up with it for a long time, considering their economy is based on exports, and a common currency is the only way to keep those exports cheap enough for their neighbors to afford them.

            For Germany, there really aren’t any good options.

            1. For Germany, there really aren’t any good options

              I don’t know, in the long run, invading the rest of Europe seemed to work out a lot better for them than it did for the rest of Europe. They are the economic powerhouse …

  19. Which means it may well finally be time to say … and …! to the birthplace of democracy.

    A dubious honor to be sure.

  20. So after the Euro collapses and you have all these bankrupt countries with gargantuan inflation, how long before Europe is once again embroiled in constant warfare?

    I give it three or four years before Russia desperately attempts to reclaim all of Eastern Europe and 10 years before Greece decides that the best solution to their economic woes is to annex western Turkey.

    We are only four decades removed from Turkey trying to invade Cyprus and we’ve now got an uber-nationalist Islamist in Turkey and the Commies on the march in Greece.

    1. It’s got a real pre-European war feel to it, that’s for sure. This is not a good time for the U.S. to be getting all fucked up.

    2. A good time to become an engineer in the military-industrial complex I suppose.

    3. It takes money to wage war. Who is Greece going to wage war against and with what weapons? At this point the UK, Germany, Poland,the Scandinavian countries and a few of the old Eastern Block countries are the only countries in Europe that have the financial ability to build a military if they even wanted to. Where the hell are Greece, Italy, Spain and France going to find the money to build a modern military and wage war?

      There is no doubt that socialism is doing horrible things to Europe. Given that, maybe the collapse of these socialistic governments might be a good thing. If socialism collapses, Europeans might start having children again. They might by necessity have to start working hard. Cut off the welfare and maybe lazy ass Muslims will stop wanting to immigrate there. Who knows what good effects might occur.

      1. The one fly in the ointment–well, two–is the simultaneous growth of Russian aggressiveness and the economic decline of the U.S., coupled with our hapless foreign and military policy over much of the last twenty years.

        I suspect that the Eastern European nations are going to dramatically increase their military spending and growth, which is going to force Western Europe to do some of the same, given that the U.S. isn’t entirely reliable as a military ally. From there, trouble isn’t far away.

        1. I think you are right. Frankly, I think Eastern Europe should be able to defend itself against Russia. I would take the Poles or the Finns over the Russians in a conventional war any day. Russia is falling apart. Their military sucks. All they have left are nukes.

        2. Relatively speaking, the US is economically more powerful today vis-a-vis the Eurozone and Russia than it has been in at least 15 years. The ongoing USD bull market (against nearly every other currency and asset) is evidence of that. Russia’s foreign aggressiveness is a function of their current relative economic weakness.

          Anyways, I agree with the second paragraph. Eastern Europe — some of whom are in the Eurozone — will have to ramp up military spending to counter Russia.

          1. Relatively speaking, yes. But the ability and the desire of the U.S. to be the defender of Europe isn’t what it once was. Part of that is that our absolute wealth isn’t what it once was, either.

      2. France totally has the ability to build a war machine. I am not sure why you think it doesn’t. It’s the second-largest economy in Europe and possesses a relatively large financial sector to finance the construction. Whether it has the will is a completely different question.

        1. I will give you France. But why would France and Germany or the UK go back to war at this point? I just don’t see it. i could see Russia being a problem for Poland and Germany. But I don’t see it in Western Europe.

          1. Because of NATO. Much of Eastern Europe, along with a few ex-Soviet states, are members.

            It was possibly a mistake to expand NATO into Eastern Europe following the collapse of the Warsaw Pact. But unless Western Europe and the USA are willing to break NATO, they will be forced into a war with Russia if/when Poland or one of the Baltic states are attacked. And Putin may just attack out of the belief that NATO is a worthless piece of paper.

          2. Russia won’t touch Poland, Finland, and Germany – no compelling interest. Baltic states are another matter, but not practical at the moment. Putin is more like Bismarck, trying to put together greater Russian state.

            1. Russia won’t touch Poland, Finland, and Germany – no compelling interest.

              The logic of empire may or may not sum up to “no compelling interest”.

              1. Russia is not USSR. Current drive nationalist, not international Communist ideology. People say ‘protect Russians’, nobody cares about Poles or Finns etc.

                1. *drive is nationalist

            2. Putin is more like Bismarck, trying to put together greater Russian state.

              Bismarck was consolidating small German states and in the process creating a centralized German state. A Russian national state already exists and Putin is simply taking bites out of his neighbors. The analogy doesn’t work.

              1. What Putin is doing, by using ethnic Russian populations as a pretext for annexation, is more like what Hitler was doing with Danzig and the Sudetenland, if you’re still looking for a valid analogy.

                1. If the worst thing Hitler ever did was unite German populations (and Germans were quite happy with unification), I would bless Hitler myself. I see no problem with East/West German unification either.

                  1. If the worst thing Hitler ever did was unite German populations (and Germans were quite happy with unification), I would bless Hitler myself.

                    You would bless someone willing to kill men, women and children for the privilege of redrawing lines on a map.

              2. Prussia already existed too.

                As far as Russia goes, Gorbachev fucked up royally during the collapse of the USSR. He was a nice guy with a good vision (getting rid of the Soviet system), but idiotic Communist drawn borders should have been better negotiated.

                1. Prussia already existed too.

                  Yes Prussia, not Germany. The list of German-speaking polities that existed immediately prior to unification is something on the order of 30, Prussia was one of them.

    4. The Germans won’t let the Euro collapse. The EU would first.

    5. Turkey trying to invade Cyprus

      Didn’t they invade and isn’t Cyprus still divided?

        1. That actually leaves out some bits.

          The 1974 coup was carried out with the assistance/support of the Greek military, and the guy who took over the reigns of government was supporting political union with Greece and the Greek majority were very ready to stick it to the Turkish minority (thanks to Britain’s policy of formenting ethnic rivalry within their colonies to make it easier to divide and rule). The Turks asked the Brits to intervene since England was guaranteeing Cyrpus’ independence from both Turkey and Greece, didn’t get it, and so invaded to ‘protect’ the Turks.

          The Turkish invasion wasn’t out of the blue. Rather the Turks, with their ethnic nationalism, considered the coup to be an attack on the Turkish minority on the island.

          1. One funny aside: the invasion did catch many people in the army by surprise – a buddy of my dad was a tank driver who was AWOL on a bender for a weekend, snuck back onto base with expecting the inevitable punishment and found that all was forgiven since they still had an hour to move out and they needed his ass in his tank before then. He had had no idea that any invasion was planned, they had been in a normal peacetime posture when he left on liberty Friday night.

            24 hours later, the guy was driving his tank over improvised obstacles trying to get to some town before the Greeks.

    6. We’ll have to see how technology interacts with demographics.

      Typically, war is only possible when supported by the right demographics – growing population with surplus males (sorry dudes). Obviously, that’s not the situation in Europe right now even with high unemployment. They’ve got negative population growth and a hostile (to western goals) immigrant population. But with technology, possibly raw numbers of young males won’t be necessary. Looks like a nice dose of asymmetrical warfare might be in the cards.

      1. But with technology, possibly raw numbers of young males won’t be necessary.

        They won’t be. As weapons get more lethal, the density on the battlefield gets less and less. Before the invention of the repeating rifle, soldiers stood shoulder to shoulder on the battlefield. Now US Army Doctrine has a battalion operating in a larger battle space than a brigade operated in during World War II.

        The more lethal the weapon, the smaller the army. I don’t think you will ever see armies anywhere near the size they were in the 20th Century again.

        It is why the people like Mark Steyn who say that the future belongs to those with lots of young men are wrong. The future belongs to whomever has the technology and is willing to use it. Those young men won’t do you a damn bit of good against technology.

        1. Steyn is right, actually.

          The future belongs mostly to those who show up (demographically).

          If you have a lot of young men, you have shown up. And you are very likely to have a lot of young women making the next generation.

          1. Meh. To fight modern war you need two things:

            1. Effective propaganda, both domestic and on the battlefield, to prevent people from rioting.

            2. Technology, which boils down to Air Force for the West and artillery/missile for Russia.

            If you got those two, numbers won’t do much for your enemy.

          2. I wasn’t talking about fighting wars.

            I was talking about who owns the future.

            Winning a war and winning the peace are two completely separate issues.

            1. In that case, it will be sub-Saharan Africa. They’ll have the most young people soon, followed by India.

              Maybe you are right, the world is always changing. We’ll see.

    7. I think Eastern Europe might be the only part that is functional by then.

  21. The idea of keeping debt to GDP at lower levels is … a sign that a country is neither taxing nor spending too much

    Hmm. I bet those countries ARE taxing and spending too much.

  22. I wonder how long it will be before Obama starts saying that U.S. taxpayers have to bail Greece out. No, seriously, I can easily see him doing that.

  23. I think it’s a good time to kick Jeremy Rifkin, that old pinko. Remember his joy about the Euro and his 2005 tome The European Dream: How Europe’s Vision of the Future Is Quietly Eclipsing the American Dream? How’s euro-socialism working out these days, Jeremy?

  24. Everybody stay back or the nigger Greek gets it.

    1. Does this mean Greece is about to be attacked by rustlers, cut throats, murderers, bounty hunters, desperados, mugs, pugs, thugs, nitwits, halfwits, dimwits, vipers, snipers, con men, Indian agents, Mexican bandits, muggers, buggerers, bushwhackers, hornswogglers, horse thieves, bull dykes, train robbers, bank robbers, ass-kickers, shit-kickers and Methodists?

      1. Does this mean Greece is about to be attacked still be ruled by . . .

        Yeah, I think so.

        1. Well, not the Methodists.

    2. It ?is? a bit like that scene, isn’t it?

  25. Great article. I said the same thing in another blog. If they do some of the things Syriza is talking about, given they already are in deep debt and about to lose the subsidy from the rest of Europe, they are going to wind up a 3rd world country. Those Syriza people aren’t going to make any more real goods and services show up. Syriza may have a legitimate beef with being part of the Euro, but I’m not sure Hanke would agree with me. It also makes you think about democracy. Maybe the focus of well designed government should be on minority rights and physical constraints on how governments can spend money, borrow, and tax. I have also said in other places, the U.S. is what it is, because it’s voters understand economics better than any other country in the world.

    1. I think the voters chose Syriza because they were given a slate of absolutely horrible options: the two parties currently in power which absolutely failed them in their 40 years of power, the ultra-nationalist Golden Dawn and the communist-inspired Syriza.

      If I was Greek, I definitely wouldn’t choose the parties in power due to their rank incompetence. I wouldn’t pull the lever for Golden Dawn either. I’d end up pulling for Syriza, thinking “eh, it could maybe get worse with Syriza but I absolutely don’t trust anybody else”.

      1. They chose the lesser of two weevils.

        1. Love that movie.

    2. That used to be attributable to so many Americans being involved with small business and because of that proverbial American pragmatism, but how deep does that run today? It’s still there, else we’d be in the same shape as Europe, but not as dominantly as it once was.

      1. This. For instance, the entire state of California is a pension fund.

  26. “…which insists that its members at least pretend to be serious about being able to their governments’ books.”

    Something is missing here.

    “But don’t be fooled for a minute that anything happening in Greece has to do externally imposed “austerity” programs.”

    C’mon Nick get WITH it.

  27. The homeland of Sophocles going bust and possibly being kicked out of the EU isn’t a Greek tragedy/blockquote

    Isn’t a greek tragedy where the central character, though his own hubris, plows wholeheartedly through all reason and obstacles in his path on the way to an epic collapse? “Our intentions were so good, how could this happen to us?!?”

  28. I think Brazil might be an instructive example in this instance.

    When Lula came to power in 2002, a lot of people worried that he would be another Hugo Chavez. However, he quickly appointed free market economists as ministers and the first thing he did was pay off Brazil’s debts to the IMF.

    I wonder if Syriza might end up taking a similar approach.

    1. And who in government profited from that move?

      Exactly. That’s a mistake that Greece certainly won’t make.

    2. Lula was a big surprise that way, but it’s easier when you are the head of one party. It’s a lot harder to get the “Coalition of the Radical Left” to turn more free market.

    3. I wonder if Syriza might end up taking a similar approach.

      Like Obama was going to reform entitlements and not implement healthcare reform. Will you be supporting Elizabeth Warren on the notion that she is some secret libertarian?

      It’s a lot harder to get the “Coalition of the Radical Left”

      Syriza is now one party, the name has stayed though.

      Anyway the problem with Syriza turning all free-market is that they have promised the moon and they still have to deal with Greece’s financial crisis.

      1. Not to mention that they are in coalition with a rightist anti-bailout party which seems to show that they are interested in being hardliners on the bailout. And being a merger of a bunch of leftist parties means there are going to be a lot of internal dissention if they do a U-turn on the bailout.

        His cabinet will be appointed tomorrow so we’ll see if he has appointed some free-market economists.

  29. ecoonomcs

    Racist.

    Editor anyone?

  30. Also, the title of this thread should have been “So Long, and Thanks for all the Democracy”.

  31. You missed huge chunks of the problem: Government corruption, politicians helping cartels close off the economy, red tape and bureaucracy in starting a business, etc etc.

    The biggest source of debts the past decades? 1. Defense spending, 9-10% of GDP yearly iirc. 2. No-tax policy of Greece’s #1 industry, shipping. These things spring from right wing ideologies, not from left wingers.

    The outgoing right wing government (claiming center but please, look closely at it’s content and members) were tasked to reform the all of the above. They literally did squat. Zero reforms. They just cut pensions and health services and blamed it on the troika.

    So they’re gone now. The two party system died. Good riddance. The new lefties are full of promises, including taking on the oligarchs. We’ll see. Don’t bet on it though. But people need hope and this 40 year old PM symbolizes that.

  32. Thanks for loaning me the money but you don’t expect me to actually pay it back do you?

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