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(Daily Kos)   We should have a balanced budget amendment--Just like Greece   (dailykos.com) divider line 68
    More: Ironic, Balanced Budget Amendment, Greece, fiat moneys, declining populations, tax collections, Health Care, International, balanced budgets, money supply  
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1081 clicks; posted to Politics » on 31 Oct 2012 at 4:17 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-10-31 02:09:16 PM
They also drive on the right in Greece. What if that crashed their economy? We should drive on the left!
 
vpb [TotalFark]
2012-10-31 02:12:42 PM

This Is Bold Text: They also drive on the right in Greece. What if that crashed their economy? We should drive on the left!


Sure, what do economists know? Austerity works in Spain!
 
2012-10-31 02:20:48 PM
But Germany doesn't seem to care. Markel's right-wing government is anti-Keynsian and doesn't seem interested in observing reality. Italy and Spain are also suffering German fantasies.

LOL
1) Germany should care and help save those three countries.
2) EU should kick Greece out of the EU for fraud and put Italy and Spain on notice.

But in the end, if the EU wants to run its currency like the US does, than the member countries will need to lose a little sovereignty, like the states did.

In order for Greece to stay in the union, it should be forced to file for bankruptcy and the banks that gave loans to Greece should take it in the ass like they deserve.

How else do you prevent this from just happening over and over and over and over??
 
2012-10-31 04:03:51 PM

This Is Bold Text: They also drive on the right in Greece. What if that crashed their economy? We should drive on the left!


That does it. I'm driving in the middle until this gets sorted out.
 
2012-10-31 04:07:15 PM

namatad: How else do you prevent this from just happening over and over and over and over??


You don't. This sort of thing is one of the many reasons we have a strong Federal government instead of the much looser organization that took place with the Articles of Confederation.
 
2012-10-31 04:14:41 PM

TheBeastOfYuccaFlats: namatad: How else do you prevent this from just happening over and over and over and over??

You don't. This sort of thing is one of the many reasons we have a strong Federal government instead of the much looser organization that took place with the Articles of Confederation.


Which leads to the only logical question for the EU: kick the criminals out, change and become a stronger federated union, or collapse.

I guess you could keep the criminals and let them collapse. Let the markets drive the interest rates to their proper level and starve the Greeks until they are willing to stop being thieves.

Sorry, but a common currency would have some minimal requirements, like actually collecting taxes?
Like not supporting countries which have a much lower retirement age than other countries.

I understand that it isnt that simple, but, in a loose federation, what responsibility do the other states have for a state which doesnt play by the same rules? In the US, if a state wont pay its bills, at some point, national banks wont loan them any money, forcing bankruptcy or fiscal restraint or whatever changes are required.

The Greeks want it both ways, they want the rest to bail them out and they dont want anyone to tell them what to do with the money. LOL

bah - they were crazy for letting greece in in the first place.
 
2012-10-31 04:18:14 PM

Ed Finnerty: This Is Bold Text: They also drive on the right in Greece. What if that crashed their economy? We should drive on the left!

That does it. I'm driving in the middle until this gets sorted out.


I'm driving on the sidewalk. Let the walkers get out of the way!
 
2012-10-31 04:19:40 PM
p.twimg.com
Greece is the word?
 
2012-10-31 04:20:00 PM
Anyone who seriously supports the idea of a balanced budget amendment has no farking clue what is involved in the functioning of a government.
 
2012-10-31 04:21:09 PM

namatad: In order for Greece to stay in the union, it should be forced to file for bankruptcy and the banks that gave loans to Greece should take it in the ass like they deserve.


How does a country file for bankruptcy?

namatad: 1) Germany should care and help save those three countries.
2) EU should kick Greece out of the EU for fraud and put Italy and Spain on notice.


I like this idea. Do they have the power to do that?

The EU needs to collectively start printing some damn money, IMO. Their monetary base is too damn small.
 
2012-10-31 04:23:14 PM
A balanced budget amendment is a stupid idea. We need government debt. We need the government to be able to be flexible about the size of government debt. We need to educate the populace to understand that government debt doesn't have to all be paid back and is actually a large and necessary part of the monetary base needed to have a strong economy.

But that ruins electoral strategies, now doesn't it?
 
2012-10-31 04:25:00 PM
Austerity Measures: That'll teach the people who didn't cause the mess.
 
2012-10-31 04:25:21 PM
The tax collection rate in Greece is 20%. In the US, it's 90%.

The Greek government lied through its teeth to get into the EU and then borrowed money based on those phony numbers.

That's all you really need to know.
 
2012-10-31 04:31:37 PM
No, we should cut the military budget and stop wasting our resources getting bogged down in military actions for issues the international community should be solving.

And then we should make corporations and other top tax bracket individuals pay what they've been holding out on for decades.

We'd see one hell of a surplus.
 
2012-10-31 04:32:20 PM
We should actually just spend more and do it faster.

This debt thing has got to be like an odometer... it'll roll over to 0 again eventually and *POOF* we're at a clean slate.
 
2012-10-31 04:32:41 PM

Teufelaffe: Anyone who seriously supports the idea of a balanced budget amendment has no farking clue what is involved in the functioning of a government.


And they've got 60 people in their Congressional caucus.
 
2012-10-31 04:35:03 PM

bartink: A balanced budget amendment is a stupid idea. We need government debt. We need the government to be able to be flexible about the size of government debt. We need to educate the populace to understand that government debt doesn't have to all be paid back and is actually a large and necessary part of the monetary base needed to have a strong economy.

But that ruins electoral strategies, now doesn't it?


Yeap.

And yes, public debt is a necessary part of monetary policy. The issue is that you cannot let it get so out of hand that your credit rating degrades, or that you cannot borrow enough for Keynesian economics to work. In other words, you need to actively manage it and not just let it grow out of hand.
 
2012-10-31 04:36:29 PM

Citrate1007: Austerity Measures: That'll teach the people who didn't cause the mess.


You're right. Innocent are the people who for decades have been voting themselves ever-increasing benefits in an economy based on olive oil and pickpockets. Innocent are the noble government ministers who blew the first round of bailout money on hookers and blow. Everything was going great until some evil 1%ers raised the bond yields a couple points and farked everything up.
 
2012-10-31 04:36:55 PM
Remember: The dead in the streets are a small price to pay for our ledgers looking proper.
 
2012-10-31 04:37:18 PM
Let's face it. The only thing holding that country together was rampant buttsecks.
 
2012-10-31 04:37:25 PM
I might be one of the biggest deficit hawks here, but this is a retarded idea for the US. Cutting off your nose to spite your face is not going to be helping anyone in this (or any other) mess we currently find ourselves.
 
2012-10-31 04:38:40 PM

whidbey:
We'd see one hell of a surplus.


Nope, but it might be a good start to climbing out of this hole.
 
2012-10-31 04:38:59 PM

dwrash: And yes, public debt is a necessary part of monetary policy. The issue is that you cannot let it get so out of hand that your credit rating degrades, or that you cannot borrow enough for Keynesian economics to work. In other words, you need to actively manage it and not just let it grow out of hand.


I agree. But the credit downgrade is pure bullshiat and most people are coming around to that. The world is begging us to borrow money so they have a safe place to invest. Clearly the downgrade isn't reflective of reality.

I agree it must be managed. But we have tripled the monetary base in the last 5 years and are having low inflation. Something is wrong about conventional wisdom when it comes to the debt. Very wrong.
 
2012-10-31 04:39:05 PM

dwrash: bartink: A balanced budget amendment is a stupid idea. We need government debt. We need the government to be able to be flexible about the size of government debt. We need to educate the populace to understand that government debt doesn't have to all be paid back and is actually a large and necessary part of the monetary base needed to have a strong economy.

But that ruins electoral strategies, now doesn't it?

Yeap.

And yes, public debt is a necessary part of monetary policy. The issue is that you cannot let it get so out of hand that your credit rating degrades, or that you cannot borrow enough for Keynesian economics to work. In other words, you need to actively manage it and not just let it grow out of hand.


Pretty sure the reason our credit rating was allowed to degrade was a deliberate political maneuver, and the debt we've incurred is a result of tumultuous policies of the past administration, but don't let me distract you from the picture you're painting.
 
2012-10-31 04:39:23 PM

Harvey Manfrenjensenjen: Citrate1007: Austerity Measures: That'll teach the people who didn't cause the mess.

You're right. Innocent are the people who for decades have been voting themselves ever-increasing benefits in an economy based on olive oil and pickpockets. Innocent are the noble government ministers who blew the first round of bailout money on hookers and blow. Everything was going great until some evil 1%ers raised the bond yields a couple points and farked everything up.


You sound like a plutocrat
 
2012-10-31 04:40:07 PM
Next up: Negative taxes!
 
2012-10-31 04:47:54 PM

bartink: . But we have tripled the monetary base in the last 5 years and are having low inflation. Something is wrong about conventional wisdom when it comes to the debt. Very wrong.


Part of that is that the expanding monetary base is not making its way all the way down the food chan, nor is it really spurring demand/consumer spending. That is partially what happens when a population starts to delverage. In all reality, it needs to continue until the household debt levels get back to somewhat sustainable levels.

In a certain way, the government needs to do the same thing. A good belt tightening and a realization that we may have some slow growth for an extended period of time, might end up being a good thing. One thing is for certain, we can't continue on the current path for very long.
 
2012-10-31 04:48:44 PM

namatad: But Germany doesn't seem to care. Markel's right-wing government is anti-Keynsian and doesn't seem interested in observing reality. Italy and Spain are also suffering German fantasies.

LOL
1) Germany should care and help save those three countries.
2) EU should kick Greece out of the EU for fraud and put Italy and Spain on notice.

But in the end, if the EU wants to run its currency like the US does, than the member countries will need to lose a little sovereignty, like the states did.

In order for Greece to stay in the union, it should be forced to file for bankruptcy and the banks that gave loans to Greece should take it in the ass like they deserve.

How else do you prevent this from just happening over and over and over and over??


Easy, move to a sandwich based economy.
 
2012-10-31 04:48:59 PM

Dwight_Yeast: The tax collection rate in Greece is 20%. In the US, it's 90%.

The Greek government lied through its teeth to get into the EU and then borrowed money based on those phony numbers.

That's all you really need to know.


TFA: Greece collects under 70% of what taxes it is due.

Now I know 20% Like, people inhabit
 
2012-10-31 04:50:18 PM

HeadLever: I might be one of the biggest deficit hawks here, but this is a retarded idea for the US. Cutting off your nose to spite your face is not going to be helping anyone in this (or any other) mess we currently find ourselves.


Spider-face.
 
2012-10-31 04:52:06 PM

HeadLever: bartink: . But we have tripled the monetary base in the last 5 years and are having low inflation. Something is wrong about conventional wisdom when it comes to the debt. Very wrong.

Part of that is that the expanding monetary base is not making its way all the way down the food chan, nor is it really spurring demand/consumer spending. That is partially what happens when a population starts to delverage. In all reality, it needs to continue until the household debt levels get back to somewhat sustainable levels.

In a certain way, the government needs to do the same thing. A good belt tightening and a realization that we may have some slow growth for an extended period of time, might end up being a good thing. One thing is for certain, we can't continue on the current path for very long.


The last sentence: Why is that "for certain?"
 
2012-10-31 04:57:00 PM

Blue_Blazer: The last sentence: Why is that "for certain?"


See the Yellow/Orange areas below

theeconomiccollapseblog.com
 
2012-10-31 04:57:30 PM

bartink: How does a country file for bankruptcy?


It defaults on its debt.
It tells the debt holders when and how much to ever expect to see again.

"Bankruptcy" is a common word used to describe those (and additional) events.
Humans have a tacit understanding of the word bankruptcy. They understand the idea of "bankruptcy" when it is applied to a person or a company or a city or a country.

Pendants get fussy about the law, denotation and what not.
But if Greece defaults on its debt and tells the banks/bond holders to fark themselves, the headlines will read "Greece Defaults" and "Greece is Bankrupt" and everyone on the planet will understand what is "meant."

And you will complain that they used the wrong word.
 
2012-10-31 05:01:29 PM

bartink: namatad: In order for Greece to stay in the union, it should be forced to file for bankruptcy and the banks that gave loans to Greece should take it in the ass like they deserve.

How does a country file for bankruptcy?

namatad: 1) Germany should care and help save those three countries.
2) EU should kick Greece out of the EU for fraud and put Italy and Spain on notice.

I like this idea. Do they have the power to do that?

The EU needs to collectively start printing some damn money, IMO. Their monetary base is too damn small.


You would assume that the EU charter has mechanisms to remove a nation. You would HOPE that it does. Rational charters have rules for joining and rules for leaving. (Alas, the US doesnt, which lead to the civil war and Arizona.)

Printing money?
This would hurt all of the countries and only help Greece. The EU hasnt decided to help Greece because Greece continues to protect Greek criminals. At some point we should really expect Greece to leave the EU. I cant see the rest of the EU suffering inflation to protect a bunch of whiners.

/we get it, you want all those wonderful things that you were promised. but why should someone else pay for those things??
 
2012-10-31 05:06:10 PM

HeadLever: In a certain way, the government needs to do the same thing. A good belt tightening and a realization that we may have some slow growth for an extended period of time, might end up being a good thing. One thing is for certain, we can't continue on the current path for very long.


Belt tightening is out of the question right now. We can deal with that later. My hunch is that we can continue longer than conventional wisdom is telling us, given how wrong they've been about inflation.

HeadLever: Part of that is that the expanding monetary base is not making its way all the way down the food chan, nor is it really spurring demand/consumer spending. That is partially what happens when a population starts to delverage. In all reality, it needs to continue until the household debt levels get back to somewhat sustainable levels.


This is true. This is why I think that we should handle that by cutting pay roll taxes until we are going again. I'd favor a complete holiday. That will make sure the money goes to those that will spend it. Even if they use it to mostly rid themselves of personal debt, all the better. Because they will get back to consuming that much sooner, but with a better personal balance sheet. This will allow Bernanke to use the traditional tools at his disposal instead of desperate QE nonsense. I get why he's doing it. He's out of tools. But getting off the zero bound will give him more flexibility. We need for Congress to step up and stop obsessing over the debt.

I'm not a deficit hawk, as you can tell. I frankly think that their position has been hurt by what has happened in this recession. At least it should have.
 
2012-10-31 05:08:46 PM

HeadLever: Blue_Blazer: The last sentence: Why is that "for certain?"

See the Yellow/Orange areas below


That's a pretty chart. I think I would try to get that black line up some. What is the original scurce for that?
 
2012-10-31 05:09:14 PM

namatad: Printing money?
This would hurt all of the countries and only help Greece. The EU hasnt decided to help Greece because Greece continues to protect Greek criminals. At some point we should really expect Greece to leave the EU. I cant see the rest of the EU suffering inflation to protect a bunch of whiners.

/we get it, you want all those wonderful things that you were promised. but why should someone else pay for those things??


I don't agree. I think the whole EU needs a larger monetary base and they need it yesterday. They are showing signs of coming around to this idea, but its two steps forward, two steps back.

As far as others paying for those things, they are already paying for not doing it. Its hurting all of them economically, not just Greece. Get the economy moving again and worry about that other crap later. Because you can't get back idle labor in the future. Its gone forever. Money supply can be contracted later, however. Its far better to get employment up for the whole of the EU and worry about debt at some future date.
 
2012-10-31 05:13:56 PM

namatad: bartink: How does a country file for bankruptcy?

It defaults on its debt.
It tells the debt holders when and how much to ever expect to see again.

"Bankruptcy" is a common word used to describe those (and additional) events.
Humans have a tacit understanding of the word bankruptcy. They understand the idea of "bankruptcy" when it is applied to a person or a company or a city or a country.

Pendants get fussy about the law, denotation and what not.
But if Greece defaults on its debt and tells the banks/bond holders to fark themselves, the headlines will read "Greece Defaults" and "Greece is Bankrupt" and everyone on the planet will understand what is "meant."

And you will complain that they used the wrong word.


Speaking of using the wrong word....

GIS for "fussy pendant"
t0.gstatic.com
 
2012-10-31 05:15:13 PM

GanjSmokr: We should actually just spend more and do it faster.

This debt thing has got to be like an odometer... it'll roll over to 0 again eventually and *POOF* we're at a clean slate.


That one is called "defaulting" and results in your country's repair work tripling in price (or more) as the parts become so hard to find you have to start getting them custom-built and the resale value drops through the floor.

On the bright side you don't have to spend much on insuranceforeign aid (not that you ever did) because no one expects much out of you. And I'd best stop torturing this metaphor before they haul me off to the Hague.
 
2012-10-31 05:19:37 PM

bartink: I don't agree. I think the whole EU needs a larger monetary base and they need it yesterday. They are showing signs of coming around to this idea, but its two steps forward, two steps back.


T'is the NEVER ending question of how much inflation is the right amount. Some is always better than not enough or too much. And crazies who think otherwise, are, well, crazy.

bartink: As far as others paying for those things, they are already paying for not doing it. Its hurting all of them economically, not just Greece. Get the economy moving again and worry about that other crap later. Because you can't get back idle labor in the future. Its gone forever. Money supply can be contracted later, however. Its far better to get employment up for the whole of the EU and worry about debt at some future date.


This is very true and probably the biggest issue.
One Funny and Entertaining solution would be to bail out spain and portugal, with proper terms and warnings that there is not another bailout around the corner and they had better not be hiding crap again. And just continue to wait for Greece to get its act together.

This has a couple of positive notes:
Some inflation/increase in monetary base.
Some spending stimulus.
Helps Spain and Portugal before it gets worse.
Puts Italy on notice that they might get treated like Greece.
Puts Greece on notice that the EU is willing to help rational countries.
(Probably pisses them off enough that they leave the EU on their own.)

So of course, none of these things would ever happen.
 
2012-10-31 05:20:32 PM

Blue_Blazer: Speaking of using the wrong word....

GIS for "fussy pendant"


god damn this so very much. this is what I get for posting instead of getting lunch
LOL
 
2012-10-31 05:20:58 PM

HeadLever: See the Yellow/Orange areas below


I'm sorry, but projecting that far into the future is simply fear mongering. Due to accelerating tech innovations, we have no idea what the economy will be like in even a decade, much less in 2080. Look at it this way, the iPod is a little over a decade old. Now I have a smart phone that fits in my pocket. Ten years from now, I will have something that probably isn't imaginable right now. In 2080? Please.

I find that chart to be disingenuous.
 
2012-10-31 05:22:18 PM

namatad: This has a couple of positive notes:
Some inflation/increase in monetary base.
Some spending stimulus.
Helps Spain and Portugal before it gets worse.
Puts Italy on notice that they might get treated like Greece.
Puts Greece on notice that the EU is willing to help rational countries.
(Probably pisses them off enough that they leave the EU on their own.)


And, as you suggested, make the banks eat some of it for making the bad loans in the first place. I'm talking mostly about Spain here.
 
2012-10-31 05:24:58 PM

namatad: Printing money?
This would hurt all of the countries and only help Greece. The EU hasnt decided to help Greece because Greece continues to protect Greek criminals. At some point we should really expect Greece to leave the EU. I cant see the rest of the EU suffering inflation to protect a bunch of whiners.

/we get it, you want all those wonderful things that you were promised. but why should someone else pay for those things??


For the same reason my Tax dollars pay for Alaskan road work.

i75.photobucket.com

Greece doesn't make money, their industry is tourism and feta cheese and that's about it. They aren't going to be able to win any kind of trade competition so they will always inevitably lose the economic game of Monopoly they're playing with other nations. Problem is as long as they're sharing the same house (currency) as the others they have to be dragged along, subsidized, and held onto. Because there's nothing there to be turned into a moneymaker.

You can argue the morality of leaving them twisting in the wind, of never having let them in, of whether or not it's "fair" to keep burdening them with debt and keep "beating them" economically but it DOESN'T MATTER. Moral or immoral, at this point "cutting them loose" means hacking off one of your own limbs (economic-metaphorically speaking) and the subsequent severe bleeding.

So stop telling us, "It's not fair! Waaaaah!" It's too late for "fair," what matters is "works."
 
2012-10-31 05:24:59 PM

namatad: Blue_Blazer: Speaking of using the wrong word....

GIS for "fussy pendant"

god damn this so very much. this is what I get for posting instead of getting lunch
LOL


Sorry, couldn't resist.
 
2012-10-31 05:28:36 PM

bartink: HeadLever: See the Yellow/Orange areas below

I'm sorry, but projecting that far into the future is simply fear mongering. Due to accelerating tech innovations, we have no idea what the economy will be like in even a decade, much less in 2080. Look at it this way, the iPod is a little over a decade old. Now I have a smart phone that fits in my pocket. Ten years from now, I will have something that probably isn't imaginable right now. In 2080? Please.

I find that chart to be disingenuous.


That's basically how I feel as well. Trying to convince people that very real suffering now (in the form of cutting services) is the solution to a hypothetical problem (explosive debt payments in 70 years) is an argument I cannot take seriously.
 
2012-10-31 05:31:06 PM
Yeah, and any such amendment would need emergency powers included in it, such as in times of war or great national crisis.

So it would essentially be useless, since we are in a perpetual war, whether on terror, drugs, or lemonade stands.
 
2012-10-31 05:32:32 PM

bartink: Belt tightening is out of the question right now. We can deal with that later. My hunch is that we can continue longer than conventional wisdom is telling us, given how wrong they've been about inflation.


Inflation is not the worring part to this issue for most folks (at least for me). The interest obligation to the cumulative debt that we take on is the biggest issue here. The longer we ignore this issue the harder it will bite us in the future. You are correct that we don't want to significantly curtail spending, but we do need to start paying better attention to the deficits and start cutting out the low hanging fruit. Overall take up the belt just one or two notches.

Because they will get back to consuming that much sooner, but with a better personal balance sheet. This will allow Bernanke to use the traditional tools at his disposal instead of desperate QE nonsense. I get why he's doing it. He's out of tools.

I agree. What really gets me is that everyone wants a magic fix to make this problem just go away. When households are as strapped as they have become in the late 2000s, you don't just wave a wand and make it go away. It takes a significant amount of time. Things are not going to get better until folks can feel like they can spend again. We don't want to just strap more debt on the population and create another ballon to only have it pop here in 5 years. I would think that we need to concentrate on making sure that we have a sustainable growth model going forward. Screw this boom and bust shiat we have been going through for the last 30 years.


But getting off the zero bound will give him more flexibility. We need for Congress to step up and stop obsessing over the debt.

I'm not a deficit hawk, as you can tell. I frankly think that their position has been hurt by what has happened in this recession. At least it should have.


What you need to realize moving forward is that this debt can end up reducing the amount of tools that we have avaliable in the future to fight similar downturns. If interest obligations become a significant portion of government spending (or tax revenue), you lose the ability to manipulate your own monetary policy as easily. I will agree that the Debt is not the #1 issue in need of fixing right now, but we need to be very careful on how we move forward as we can really put future generations into a very difficult position.

We cuss the baby boomers for the increased costs of Social Security and Medicaid. Just wait what this next generation says about us when they have 50% of their entire tax revenue eaten up with interest on the national debt. I don't want my kids dealing with that.
 
2012-10-31 05:34:48 PM

Blue_Blazer: HeadLever: Blue_Blazer: The last sentence: Why is that "for certain?"

See the Yellow/Orange areas below

That's a pretty chart. I think I would try to get that black line up some. What is the original scurce for that?


GAO (PDF)

I agree that getting that black line up some would be great, but Hauser's Law has a little bit to say about that. We will see.
 
2012-10-31 05:36:20 PM

bartink: HeadLever: See the Yellow/Orange areas below

I'm sorry, but projecting that far into the future is simply fear mongering. I find that chart to be disingenuous.


Take it up with the CBO and GAO then. That is acually part of their job.
 
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