Greece Redefines the Meaning of "Debt Slaves"

[momeNt]

http://www.zerohedge.com/news/its-official-greece-unveils-negative-salary

www.thepressproject.gr/listen.php?id=13457&date=2012-02-22

Salary cutbacks (called "unified payroll") for contract workers at the public sector set to be finalized today. Cuts to be valid retroactively since november 2011. Expected result: Up to 64.000 people will work without salary this month, or even be asked to return money. Amongst them 21.000 teachers, 13.000 municipal employees and 30.000 civil servants.

All hail the mighty creditors.

To those that will come in this thread to and attempt to use this as a reason why central banks actually SHOULD be allowed to print money and have complete control over their currency, I would say that Greece's situation probably would have led to drastic inflation or hyperinflation so the pain to the Greek citizens would be the same. Default is the only reasonable option, but creditors must be satisfied as they hold the world on their backs...

 

[fskimospy]

Greece used its Euro membership to get itself in a lot of trouble. That being said, the ability to print their own currency would have helped them keep interest rates on their debt down. It would have certainly helped, but that's why the Euro is acting as a good object lesson to the world on the failure of the gold standard.

 

[CycloWizard]

How can you possibly blame this on the creditors? They lent money to Greece and Greece can either repay it or not. All of these things that Greece will suffer now is nothing but the natural repercussions from the excesses of the past few decades, plus interest. It's what they signed up for.

 

[ichy]

The Greeks have nobody to blame but themselves. I'm laughing at the misery that country is going through right now, while also a little fearful that the US is heading down the same road.

 

[momeNt]

Greece used its Euro membership to get itself in a lot of trouble. That being said, the ability to print their own currency would have helped them keep interest rates on their debt down. It would have certainly helped, but that's why the Euro is acting as a good object lesson to the world on the failure of the gold standard.

It's the failure of banking and debt in our current economic system.

Steve Keen has a great blog article on his website, explaining how and why banks are cavalier with credit. When banks are positioned by governments to be the only entity that is allowed to sell more than what they have and operate from insolvency, you have problems. It's why gold standards have failed, it is why fiat currencies have failed.

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

One of the main reasons why I follow the Austrian school is that there is strong support for ending fractional reserve banking and the belief that lending should only come from savings, not artificial money creation. Fractional reserve banking has been around for a long time, and it's evident that no matter the currency being used, the market is not able to respond adequately to an artificial change in the money supply.

 

[momeNt]

How can you possibly blame this on the creditors? They lent money to Greece and Greece can either repay it or not. All of these things that Greece will suffer now is nothing but the natural repercussions from the excesses of the past few decades, plus interest. It's what they signed up for.

I'm blaming it on the nature of banking allowing creditors to become so powerful that they've convinced the world that default ends in global catastrophe. So instead they make Greeks pay to work?

 

[feralkid]

The Greeks have nobody to blame but themselves. I'm laughing at the misery that country is going through right now, while also a little fearful that the US is heading down the same road.

The "Greeks", as in the people, had nothing to do with this. Banksters and speculators gambled with dangerous abandon and now the people get to bail them out.

Sound familiar?

Keep laughing like a jackass if it makes you feel good.

 

[the DRIZZLE]

The Greeks are getting a damn good deal. They borrowed money and spent money for more than a decade an now only have to pay about 30 cents on the dollar back. Imagine if you could take out a credit card and go on a 10 year shopping spree and only pay 30 cents back but got to keep all the stuff you bought.

 

[Anarchist420]

This is a good topic. I personally see America in an even worse situation in a few years.

More/higher taxes won't fix the problem and it's a crying shame that the President only wants to increase revenue.

One reason the Articles of Confederation was better is because it didn't give the union the power to tax. Once a government has the power to tax, they spend even more while borrowing the same amount as before or even more.

 

[santz]

the banking system as it stands now all around the world needs an overhaul.
The only reason why countries like somalia and others are still existing now though is because they can print their own money, although its a slow death because of the insane inflation there

Although printing money is just delaying the inevitable. But lots and lots of billions of dollars were evaporated ( in share value and holdings) during the financial meltdown in 2008> money needs to be reprinted to an extent but its still necessary.

If USA was not printing money now, we would be in default long ago, as we were hardest hit. But still there is a limit to printing money and should be done in moderation.

LOL, Currently it feels like the printing machine is being treated like unpaid Chinese labor at Foxconn working 24 hrs a day....

 

[ichy]

The "Greeks", as in the people, had nothing to do with this. Banksters and speculators gambled with dangerous abandon and now the people get to bail them out.

Sound familiar?

Keep laughing like a jackass if it makes you feel good.

Wrong. The elected governments of Greece spent too much money on idiocy like letting people retire in their 50s and financed it all with borrowed money. Tax evasion is Greece's national pastime, and they have a bloated, expensive and useless civil service. Bankers are not to blame for anything.

 

[ichy]

The only reason why countries like somalia and others are still existing now though is because they can print their own money, although its a slow death because of the insane inflation there

Inflation is the least of Somalia's problems.

 

[SirStev0]

Fun story: The Greeks, the people, love their socialist lifestyle.

 

[PokerGuy]

Pro-tip: don't borrow more than you can pay back.

The bottom line lesson is that the Greeks borrowed a bunch of money to support an unsustainable system. At some point you have to pay the piper, and this is that point for them. The US has more options for a variety of reasons (we control our currency, we can print more, we have a larger and more diverse economy etc etc etc), but all that flim flam is just going to delay the inevitable, you must pay the piper at some point.

 

[fskimospy]

the banking system as it stands now all around the world needs an overhaul.
The only reason why countries like somalia and others are still existing now though is because they can print their own money, although its a slow death because of the insane inflation there

Although printing money is just delaying the inevitable. But lots and lots of billions of dollars were evaporated ( in share value and holdings) during the financial meltdown in 2008> money needs to be reprinted to an extent but its still necessary.

If USA was not printing money now, we would be in default long ago, as we were hardest hit. But still there is a limit to printing money and should be done in moderation.

LOL, Currently it feels like the printing machine is being treated like unpaid Chinese labor at Foxconn working 24 hrs a day....

Somalia existence, if you can even call it that, has nothing to do with its power to print money. The TFG as it currently exists has basically no power to print money for the vast majority of the country anyway, and the TFG and TFI's survive mostly on international currency supplied through the UN, AU and other donor states.

 

[momeNt]

Pro-tip: don't borrow more than you can pay back.

The bottom line lesson is that the Greeks borrowed a bunch of money to support an unsustainable system. At some point you have to pay the piper, and this is that point for them. The US has more options for a variety of reasons (we control our currency, we can print more, we have a larger and more diverse economy etc etc etc), but all that flim flam is just going to delay the inevitable, you must pay the piper at some point.

You actually never have to pay the piper if you enforce that your currency has to be used for world trade.

 

[theeedude]

They should just default. No way their economy recovers with this austerity. So they are going to go through years of pain from austerity and will still have to go through years of pain from default. Might as well make it quick.

 

[Darwin333]

How can you possibly blame this on the creditors? They lent money to Greece and Greece can either repay it or not. All of these things that Greece will suffer now is nothing but the natural repercussions from the excesses of the past few decades, plus interest. It's what they signed up for.

Well the creditors do have some responsibility obviously because they carry the risk. IMO, Greece needs to default and get it over with. Right now they are giving up sovereignty basically to the banksters and there is no way in hell I would ever agree with that.

Besides, the math doesn't lie with Greece either. They will default it is just a matter of when and how much they get kicked around before they do. Unfortunately, once they do default a lot of the same austerity measures will be necessary because no one will loan them money for a while which means they have to live within their means. At the end of it all they will be better for it though.

The sticky part is that there are much larger economies in Europe that are extremely likely to follow suit which is why the banksters are trying so hard to stop Greece from defaulting.

 

[Darwin333]

They should just default. No way their economy recovers with this austerity. So they are going to go through years of pain from austerity and will still have to go through years of pain from default. Might as well make it quick.

They are going to be forced into the austerity one way or the other. Once they default they must live within their means. They will get a large monkey off their backs with the debt payments gone, and I admit I am by no means up to date with the Greeks budget, but I doubt that they will be able to afford to get rid of the austerity measures with only their revenue.

 

[hal2kilo]

They should just default. No way their economy recovers with this austerity. So they are going to go through years of pain from austerity and will still have to go through years of pain from default. Might as well make it quick.

They'll end up being like another African country that'll never get out from under their IMF structured loans.

 

[Linflas]

I'm blaming it on the nature of banking allowing creditors to become so powerful that they've convinced the world that default ends in global catastrophe. So instead they make Greeks pay to work?

Actually you should be blaming it on the agreement that created the Euro. Absent the Euro the Greeks could never have gotten to this point.

 

[Darwin333]

The "Greeks", as in the people, had nothing to do with this. Banksters and speculators gambled with dangerous abandon and now the people get to bail them out.

I agree. They shouldn't have loaned them that much money in the first place. OTOH, that means their bond rates would have shot the moon long ago and they would likely be in pretty much the same situation just at a different time.

 

[Thump553]

I don't have much sympathy for the Greeks but this (second) bailout and austerity measures seemed doomed to failure. I don't see how Greece can dig themselves out of this hole under these austerity measures, they remind me of the reparations imposed on Germany after WW I.

My uneducated gut feeling is Greece would be better off defaulting and pulling out of the eurozone.

 

[bfdd]

The Greeks are fucking stupid for taking this deal. I would have just given the middle finger to the EU and went on my own way. This is some nonsense and I thought our debt-servitude was bad.

 

[the DRIZZLE]

Well the creditors do have some responsibility obviously because they carry the risk. IMO, Greece needs to default and get it over with. Right now they are giving up sovereignty basically to the banksters and there is no way in hell I would ever agree with that.

Besides, the math doesn't lie with Greece either. They will default it is just a matter of when and how much they get kicked around before they do. Unfortunately, once they do default a lot of the same austerity measures will be necessary because no one will loan them money for a while which means they have to live within their means. At the end of it all they will be better for it though.

The sticky part is that there are much larger economies in Europe that are extremely likely to follow suit which is why the banksters are trying so hard to stop Greece from defaulting.

People are framing this as a false choice between default and austerity. In reality the bailout is essentially a default and they will have austerity either way. It's a question of whether they pay back 30 cents on the dollar as the price to stay in the EU or pay nothing and deal with the consequences of being cut off from debt markets.