Thread: Greece About to Vote on Austerity

Well, the problem is getting worse in Europe. Greece has defaulted by every standard other than nominally. Now that that's happened there's really no reason for faith in general. The EU has made zero progress with the underlying issue. Portugal looks like it's about to default and now Italy, which is the Eurozone's third largest economy, is teetering.

What's happening in the U.S.? I don't really know much about what the issue is, or if it's just posturing.

The congress is going back and forth, wondering if they should vote to raise the debt ceiling. Again, it's just another case of letting the shit hit the fan now or later.

When was the debt ceiling put in place and why? I'm guessing it's in terms of GDP if it's not recent legislation.

I thought the idea was to do everything possible to make the fan go away until you're covered?

It was put in place to be a speed bump, to stop run away spending. It has never really been used as a cap, since we just keep raising it all the time. If we don't raise it, we probably are not going to default like Greece did, though it may cause other problems. It is far better than letting the problem go unchecked for years however. So really, it must be done now and not later.

Well, if we don't raise it we will default in exactly the same way that Greece has. By that I mean it will be a default by every definition except for the new one that they will make in order to not have to call it one. This is the reason why it is my (and many other people's) opinion that the system will enevitably crash because people are losing all faith in it.

That's what I thought. Is this a cap on the total debt, by the way, held by both private enterprises and states?

What would take priority; debts or public expenditure?

Of course, it isn't mathematically inevitable that the system will crash, and the sooner-or-later thing is a bit of a false dichotomy. Reducing the debt is a physical possibility; it will just be, presumably, painful. But if the ceiling isn't raised, default seems to be the only option? Unless the US can legally start selling assets?

Serious question, have taxes increased at all in the US since Obama took over?

To answer your questions, Xei; the debt ceiling does not apply to all debts. "Intragovernmental obligations" are not included, a good example of which would be social security. I've read reports that say that if all debts were included, the number would be up over $100 trillion.

Technically, we have already breached the debt ceiling. We went over a few months ago and money was 'borrowed' (read:stolen) from government pension funds (an intra-governmental obligation) to keep us below the mark. The only way that this money will be 'repaid' to the funds is if the debt ceiling is raised and the money is borrowed from somewhere else, and so I can't see how there is any difference.

BBC News - Republican House Speaker John Boehner quits debt talks

The fuck? This was supposed to be a political game. Now the BBC is reporting that debt talks have 'collapsed'; as far as I can tell because Obama pointed out that if the Republicans find the debt so concerning they should agree to a tax rise.

Originally Posted by Spartiate

Serious question, have taxes increased at all in the US since Obama took over?

Real taxes have, certainly. Municipal and state taxes, regulation costs, inflation tax, etc.

BBC News - Euro crisis: Barroso warns debt crisis is spreading

It's all moving forward behind the scenes. Italy's bonds are steadily rising to the 7% yield considered indicative that a country needs financial help. Same with Spain. But these countries are simply too large to be saved. It's looking definite that the shit is unavoidably about to hit the fan for the global economy but the Euro is still going strong. :/

Originally Posted by Xei

BBC News - Euro crisis: Barroso warns debt crisis is spreading

It's all moving forward behind the scenes. Italy's bonds are steadily rising to the 7% yield considered indicative that a country needs financial help. Same with Spain. But these countries are simply too large to be saved. It's looking definite that the shit is unavoidably about to hit the fan for the global economy but the Euro is still going strong. :/

Yeah, investors are pretty stupid. Right now it would be a good idea to avoid the US dollar and the euro. On the other hand, take a look at the Chinese yuan's charts for the past 2 years.

Originally Posted by cmind

Yeah, investors are pretty stupid. Right now it would be a good idea to avoid the US dollar and the euro. On the other hand, take a look at the Chinese yuan's charts for the past 2 years.

Start investing in rice and beans.

Bumpity.

Greece has had it. It's in a downward economic and social spiral; many people are actually heading for the countryside. Many thought it was going to default today; instead, France, Germany and Greece had a conversation and issued a statement saying 'Greece will stay in the Eurozone at all costs'. Not even an attempt to give the impression that it wasn't about to bail out. All that's being done now is desperate attempts at damage limitations for European banks before the inevitable.

But zero answers have been provided for the Eurozone; actually it's just descending into fighting and disunity, if anything. Italy (which unlike Greece has a very substantial economy) is looking very bad, along with a bunch of other peripheral countries; if Greece takes them down with it, all hell will break loose, and the European banks will go down too.

There were three economists on the BBC just now. This programme always makes sure to cover the entire spectrum of views; all three of these people were speculating about a second great depression that'll make 2008 look piddly. In fact they were talking seriously about extreme political unrest and war. One of the guys said something along the lines of 'extreme political events that you don't even want to think about'.

Good, serves those socialist bastards right.

National debt is now an endemic problem worldwide. Is socialism..?

Originally Posted by Xei

National debt is now an endemic problem worldwide. Is socialism..?

Yes. Democratic socialism has consumed most of the West.

So when it spreads to America you'll be celebrating about the socialist bastards getting shafted?

Either way it's an immature response. There are plenty of people who didn't want any of this but could well be living through very bad times this decade as a result of it.

Originally Posted by Xei

So when it spreads to America you'll be celebrating about the socialist bastards getting shafted?

America has been the land of socialism since the 60s.

Originally Posted by cmind

America has been the land of socialism since the 60s.

Originally Posted by cmind

America has been the land of socialism since the 60s.

When the talk about euro and joining EU was on the top list, many had a bad feeling already then. I never had much of faith for EU as whole system.

Anybody keeping up with recent events? The Greek PM decided he would actually ask the people what they wanted to do in a referendum about the bailouts, and the EU and everybody else have gone apeshit.

The recent rhetoric of the Greek opposition (who caused the mess) has been that Greece should stay in the Euro but not accept any austerity measures - a completely fucktarded thing to say because it makes no logical sense whatsoever. These people basically seem to be saying that Europe should keep shovelling money into Greece so that Greeks should continue with their endemic tax dodging and bloated state salaries indefinitely. Or maybe they think investors will keep giving them more loans, who knows. It seems like a popular thing to say, though. The actions of the Prime Minister are an attempt to put a stop to that nonsense and to put the decision and responsibility at the feet of the Greek people themselves; either declare bankruptcy or knuckle down and cut back the state. The opposition, laughably called the New Democratic party, are livid about such an idea.

The leaders of the EU are also going pretty crazy about the idea of the population having a say, which really shows how ridiculous the whole situation is.

Anyway, the upshot is that we're now much closer to severe financial events. Three things could happen; the Greek government could fall quite soon, triggering a very messy default. The government could survive to the referendum and then have the bailout rejected, again triggering a default. Or the Greeks could (against current opinion) vote for the 'austerity measures' and kick the can a bit further down the road. The first two would instantly cause havoc in the Eurozone, whilst the last likely delays it. Italian bonds are now at unsustainable levels; they, along with Spain, Portugal, and possibly even France would have to leave the EU. Also, billions of Euros of debt would be wiped out, causing the financial sector to have a traumatic seizure that would spread across the world, dragging us back down into recession or even depression.

I'm surprised that the other euro countries, particularly France are fighting so hard to keep Greece in. Seems like the logical approach would be to allow Greece to leave the eurozone and come back when it gets its shit together.

Anyways I'm tired of the economy tanking because of foreign idiots, globalization can be a bitch...