Greece Goes Broke

[WWWTT]

Migrate sure. But expect the new nation to pay for everything? Seems unreasonable. If "retirement" nations like Greece/Italy/Spain agreed to a rule like that, they made a mistake.

Don't forget Portugal! Everyone forgets about Portugal.

I have to admit that I am not completely fluent with all the rules.

I know people from Portugal can and do migrate to Germany for work and education.

All I'm saying is that this issue is much more involved and there is a story not being told.

These 4 southern countries that we have mentioned have been poor for a long time before Europa. If they have been living beyond their means, it started after the Europa deal!

WWWTT

[Argus]

Spending trillions on wars wasn't at least a major part of the payment problem?

The US, when it was half the size of its current economy, supported 500,000 soldiers in Vietnam for well over a decade without much problem. I think it could have supported 100,000 in Iraq fairly easily if people and corporations had been paying taxes at anything like the same rate.

[Shady]

You're putting Greece in a no win scenario here.

How can Greece have the money to take care of seniors who only showed up at their country after they retired after working and paying taxes in northern Europa countries?

WWWTT

How in the world are they eligible for retirement benefits if they worked and lived and paid taxes elsewhere for decades?

[GostHacked]

Greece's problem was uncontrolled government spending for decades with large and lavish entitements. You can retire at age 50 in Greece at full pay. That type of stuff sounds nice, but the bill comes due eventually.

Most westernized nations are in the same boat. We have an aging population that is retiring and the money is not being replenished enough to handle those who are going to retire in the next decade or two. If Greece is socialist, so is Canada.

Another problem, government is always spending more than it makes in taxes. Combine that with this other debt load and paying out retirees is going to create a huge crunch very soon. Even the CBC had an article where 30% of current retired seniors are retiring with a huge debt load.

http://www.cbc.ca/news/business/seniors-going-bankrupt-in-soaring-numbers-1.3129176

The golden years have become a tarnished chapter for some. Seniors are carrying more debt into retirement and, as a result, a growing number are going bankrupt.

According to the federal Office of the Superintendent of Bankruptcy, 10 per cent of those who declared bankruptcy in 2014 were aged 65 and older. That's a whopping 20.5 per cent increase from 2010.

That number will only increase over the next decade or two.

Up next, Puerto Rico, with over 70 Billion in debt and where 5% (about 3.5 million) of the population has left.

http://money.cnn.com/2015/06/29/news/economy/puerto-rico-default/

Puerto Rico can no longer make payments on its $73 billion in debt, according to Governor Alejandro Garcia Padilla, who warns the island is perilously close to entering a "death spiral"

"The debt is not payable ... there is no other option. This is not politics, this is math," Garcia Padilla told the New York Times in an interview published Sunday evening. "But we have to make the economy grow. If not, we will be in a death spiral."

The warning comes just one day before the governor is expected to release a report, conducted by former officials at the International Monetary Fund and the World Bank, that paints a very bleak picture of the commonwealth's finances. According to media reports, the governor will deliver a major speech Monday following the report's release.

Puerto Rico's economy has been in hot water for years, due to government overspending, high energy costs and dependence on debt. Now, the U.S. territory is dangerously close to default.

[dre]

Greece's problem was uncontrolled government spending for decades with large and lavish entitements. You can retire at age 50 in Greece at full pay. That type of stuff sounds nice, but the bill comes due eventually.

Again... thats objectively false. Greek state expenditures were lower than the EU average. Social spending was lower than the EU average.

Was there too much corruption? Sure... Did the government manage its finances poorly? Sure.

I understand your need to pin this on your favorite boogeyman, but its just not true.

And economies have built in controls to keep spending in check... If you borrow and spend too much your currency collapses, and governments are forced to moderate spending or collect more taxes. But by joining the Eurozone greece lost control of its currency and pegged its value and its interest rates to rates/value that make sense for countries like France and Germany. And it lost the ability to inflate away its debt as many western countries are doing.

Edited June 29, 2015 by dre

[WWWTT]

How in the world are they eligible for retirement benefits if they worked and lived and paid taxes elsewhere for decades?

Not exactly sure what you mean by "retirement benefits"

Also not even sure of the total legalities involved but here's a go at it.

http://ec.europa.eu/justice/citizen/move-live/index_en.htm

Apparently this is related

http://www.lisbon-treaty.org/wcm/the-lisbon-treaty.html

I'm not claiming that I know it all in these Europa cases. But I know for a fact that they are involved, include many countries, many laws and many people and different views!

And believe me, I have relatives in Portugal that all have different views for and against.

I also strongly believe that there's a lot of this story we are not hearing or is not being told!

WWWTT

[Bonam]

Again... thats objectively false. Greek state expenditures were lower than the EU average. Social spending was lower than the EU average.

Why do you compare Greece to the EU average, rather than to its own ability to pay for its spending? So silly. It's like people who are always trying to "keep up with the Joneses". Just because your neighbor can afford something, doesn't mean you should blindly borrow to buy the same thing. If you can't afford it, don't buy it. If you're poorer than your neighbor, you can't have as much stuff.

This is like grade 2 stuff here.

[dre]

Why do you compare Greece to the EU average, rather than to its own ability to pay for its spending? So silly. It's like people who are always trying to "keep up with the Joneses". Just because your neighbor can afford something, doesn't mean you should blindly borrow to buy the same thing. If you can't afford it, don't buy it. If you're poorer than your neighbor, you can't have as much stuff.

This is like grade 2 stuff here.

Its not silly at all. When people are claiming that Greece had runaway social spending, its totally relevant to point out that as a percentage of GDP it actually had lower levels of social spending than most of its neighbors.

Greece definately had a problem with poor fiscal management, and with corruption and tax evasion... and legalized banking fraud and adoption of the Euro put the final nails in their coffin. But none of that has anything to do with social spending which was at levels that you would expect to see.

[WWWTT]

Most westernized nations are in the same boat. We have an aging population that is retiring and the money is not being replenished enough to handle those who are going to retire in the next decade or two. If Greece is socialist, so is Canada.

Very true!!!

Canada's economy is only one spot higher than Spain's! A couple of years ago, Spain's economy was actually larger than Canada's!

This could also explain why the Canadian markets are skittish when there is uncertainty from Greece. We're in not much better shape.

WWWTT

[dre]

Most westernized nations are in the same boat. We have an aging population that is retiring and the money is not being replenished enough to handle those who are going to retire in the next decade or two. If Greece is socialist, so is Canada.

Well its worse off. Canadians have a huge treasure trove of natural resources we can just flog. Greeks have to actually produce stuff.

And Canada controls its own currency and interest rates. Greece is stuck with currency valuation and interest rates set for manufacturing powerhouses that have way higher productivity per worker.

[Shady]

Very true!!!

Canada's economy is only one spot higher than Spain's! A couple of years ago, Spain's economy was actually larger than Canada's!

This could also explain why the Canadian markets are skittish when there is uncertainty from Greece. We're in not much better shape.

WWWTT

No we are in much better shape.

[GostHacked]

Well its worse off. Canadians have a huge treasure trove of natural resources we can just flog. Greeks have to actually produce stuff.

And Canada controls its own currency and interest rates. Greece is stuck with currency valuation and interest rates set for manufacturing powerhouses that have way higher productivity per worker.

We can control it to some extent, but the interest rates are usually adjusted as a reactionary measure. Yes, we have natural resources to exploit, but as production goes, what exactly is produced here that is offered as export or for domestic distribution?

[GostHacked]

Very true!!!

Canada's economy is only one spot higher than Spain's! A couple of years ago, Spain's economy was actually larger than Canada's!

This could also explain why the Canadian markets are skittish when there is uncertainty from Greece. We're in not much better shape.

WWWTT

There was a huge campaign a year or so ago where the government was selling the idea of bonds as a way to hedge against inflation and other things. But the way things are going, how is that ever going to mature? Those bonds are going to be worth nothing if the government has no way of honouring them.

Taxes are not enough and they want more of my money so they can spend it on things that Canadians may not approve of? Their investment track record is crap as the nation heads towards more and more debt. And it does not even matter WHO is in power. Because Greece voted in a government that said they would say NO to austerity measures, but SURPRISE, happened anyways. It was inevitable result.

But I have heard the argument that as long as we have a sustainable workforce, then that is not an issue. Has anyone looked at the job situation lately? More part time jobs than full time jobs, lucky to get any kind of benefits to boot. Bring in offshoring of jobs, Canadian companies sold off to other corporations not even based in North America, Couple that with major chains biting the dust and going the way of many Dodo birds before that. We can't seem to keep our socialist healthcare system afloat much longer without a major tax increase to sustain it.

The tipping point has already happened, but some are trying as best they can to delude themselves that things are just peachy.

[cybercoma]

Greece hits its enitable end to other people's money. #Socialism

Northern Europe economies are fine and they have the best social and health metrics in the world. #socialism

[Shady]

Northern Europe economies are fine and they have the best social and health metrics in the world. #socialism

Yes, but they don't have ludicrous social policy like Greece does.

[GostHacked]

Yes, but they don't have ludicrous social policy like Greece does.

No worry, the future is sooo bright, you gotta wear shades.

[cybercoma]

Yes, but they don't have ludicrous social policy like Greece does.

The ludicrous social policy of spending less on social programs than the EU average and spending more of its revenues on paying banks? Sounds like your radical rightwing utopia to me.

[WWWTT]

The tipping point has already happened, but some are trying as best they can to delude themselves that things are just peachy.

No we are in much better shape.

We are also not a small country like Greece and have different regions to bail out the lesser regions!

There is without a shadow of doubt regions in Canada that are worse off than Greece!

But the Feds bail them out with transfer payments and residents can migrate out for work opportunities in other regions of Canada.

WWWTT

Edited June 30, 2015 by WWWTT

[Big Guy]

Meanwhile, Russia has just signed a pipeline deal with Greece. Putin has just visited Greece and has publicly suggested that if Greece asks, then Russia will help. Is there a danger that Greece, this pivotal NATO nation in the region, will turn to the "dark side"? Is it time to review Western sanctions against Russia?

[Bonam]

The ludicrous social policy of spending less on social programs than the EU average and spending more of its revenues on paying banks? Sounds like your radical rightwing utopia to me.

"Radical rightwing utopia" would be to have no debt at all, and therefore spend no revenues at all on paying banks.

[dre]

We can control it to some extent, but the interest rates are usually adjusted as a reactionary measure. Yes, we have natural resources to exploit, but as production goes, what exactly is produced here that is offered as export or for domestic distribution?

The point is our currency is valued based on our own economy. Greece using the EURO is very similar to Argentina pegging the value of its peso prior to their default (sovereign debt crisis).

Theres no easy way out for Greece now. Returning to the Drachma is probably the best bet, which is essentially what Argentina did when it removed its peg to the greenback. Ugly stuff though... youll have an immediate run on banks, although... they already basically have that. And youll have massive devaluation very quickly. And youll have capital flight and a hard time attracting foreign investment for a while, and Greek businesses that use imported materials and components will take a drubbing. On the bright side they can inflate away all that debt, and their tourism and agricultural industries will thrive. Imports will become expensive which will encourage domestic production.

[cybercoma]

"Radical rightwing utopia" would be to have no debt at all, and therefore spend no revenues at all on paying banks.

Not in any rightwing government we've seen in Canada or the US in the last 20 years.

[Shady]

The ludicrous social policy of spending less on social programs than the EU average and spending more of its revenues on paying banks? Sounds like your radical rightwing utopia to me.

Sorry, but making retirement eligible at age 50 IS ludicrous.

[Shady]

Meanwhile, Russia has just signed a pipeline deal with Greece. Putin has just visited Greece and has publicly suggested that if Greece asks, then Russia will help. Is there a danger that Greece, this pivotal NATO nation in the region, will turn to the "dark side"? Is it time to review Western sanctions against Russia?

Russia can't even help it's own domestic population let alone Greece. But if they want to pour billions into that money pit, by all means.

[Shady]

- Years of work to earn a full pension; Greece: 35 Germany: 45

- Proportion of wages as pension; Greece: 80% Germany: 46%