Reply To: Austerity has failed. An open letter from Piketty to Merkel

[Gallup’s Mirror]

Virgil: In fact the [titular] article cited completely misrepresents 50% unemployment for people under 25, the number of children in poverty and the number of Greeks who have lost their homes as being the fault of the EU.
Gallup: …cite your sources of information which falsify the claims [made in the article].
Virgil: Here’s the source I forgot to cite.

As of this writing, the Yahoo article you cited makes no such falsification. In fact it makes no mention of unemployment percentages for people under 25, the number of children in poverty and the number of Greeks who have lost their homes.

There’s no sense in discussing anything related to Greece’s debt for a while. Everything we know about it in an illusion only now being dealt with.

You did a similarly incompetent job at backing up your claim that “everything we know about [Greece’s debt] is an illusion”.

It seems they paid Goldman Sachs $500 million to help them conceal the real debt before they were accepted in the EU. Now the Greek government may be suing G&S.

The cited article does not say Greece paid Goldman Sachs to help them conceal the debt. It says Goldman Sachs made up to $500 million from transactions in which it hid a small percentage of Greek debt. (That is a sizable profit motive for GS to make Greece look good by making some money disappear.) Indeed, if the Greek government knew and actually put GS up to it, on what grounds could they sue GS for damages?

“Scrutiny and analysis of the documents and email exchanges could give Greece grounds to seek compensation and assess if the deals were executed for the sole purpose of concealing the country’s debts.”

“The past two “austerity plans” were put together with political agendas/favoritism over financial common sense and were predicted for doom from the beginning. Example here in a quote:

The cited article from June 2011 predicts austerity is doomed because it shrinks the Greek economy which in turn drives the debt higher as a percentage of GDP: “The attempt to raise just over €14 billion in new taxes over the next five years will further depress the economy, so the extra levies will raise less than expected and the country’s debt will be even harder to bear.” It does not predict that austerity is doomed due to poor execution.

Austerity means policies which reduce budget deficits: spending cuts, tax increases or both. That’s all. Austerity succeeded in reaching that goal: Greece is running a budget surplus. But it doesn’t matter. Austerity failed to reverse the depression in Greece and made it worse.

In the video Davis linked to Guy Verhofstadt outlines…
Lack of reforms undertaken on the political level while saddling the citizens with all the burden
Lack of a sincere long range plan
Lack of legislation to stop cronyism
Lack of efforts to downsize the 24% of Greeks working for the government
Lack of reform to end privileges, exemptions and political favors to special groups, cities and islands.

The solution to mass unemployment? Mass layoffs.

How do you fix an economy crippled by depressed spending? Spend less.

I enjoy crackpot economics. Thanks for the laugh, Virgil.

Listen to the 2 minute response by Tsipras. He mentions cracking down on people avoiding taxes through Swiss banks.

How is this relevant? A crackdown on tax fraud– which would help– is not austerity.

Meanwhile with a Black Market economy estimated at 25% the size of the GNP….. There’s talk that the problem is due to the high number of ‘self employed’ Greek citizens without mention of the politicians and bureaucrats who are not only turning a blind eye to it but profiting from it.

What “talk” is that? And by whom? Still no citations, Virgil?

No mention of organized crime in the black market. Every item that is profitable for the black market is so because of the taxes put upon it.

Higher taxes under austerity promotes black market sales and profits.

Exactly what point are you arguing here, Virgil?

PREDICTION.: Watch for Greece to crack down on self employed people and no others in a lame effort to curtail their black market economy.

It’s more likely Greece will crack down on tax fraud and tax avoidance, which would boost revenues without austerity (which means tax hikes or spending cuts).