Lessons of Greek Austerity

[lawrocket 3]

It looks like austerity will actually take hold in Greece. That means cuts to pension funding, health care and salaries. Big cuts. Some reports indicate that there are people who either won’t get paid for work or will even have to return money that they have already been paid.

I have several thoughts on this. First, can you imagine is private companies told workers that they weren’t going to be paid for work? Wouldn’t happen. Yet, governments can and DO get away with it. But governments can and will do it.

Second – the government is engaging in wealth redistribution. Apparently, there are some 64k people it is paying that could meet consideration of being able to work without pay or even return money they’ve been paid. This is actually what taxes do. Why not just call it a tax?

Third – funding cuts to pension and health care are biggies and what WILL be required here and they will affect primarily the sick and the old. Medicare and Social Security shall soon eat up the majority of the US budget and then the entirety of the US budget and then more than the US budget. Greece is showing what happens when solutions are put off because of the political unpopularity.

Fourth – I’m amazed Greece is actually doing something. I have been convinced that Greece would simply run off the cliff and take everyone with them.

I’m really interested in how this will pan out.

My wife is hotter than your wife.

[rehmwa 2]

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Some reports indicate that there are people who either won’t get paid for work or will even have to return money that they have already been paid

So, overwhelming social programs evolve into pretty much a situation where the populace is enslaved


it's a shame no one was able to predict this......

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[beowulf 1]

They haven't actually enacted the austeriy measures yet, so don't count your chickens before they have hatched. The next group of Greek politicians may undo everything they have agreed to.

It's going to get even uglier very soon.

[JohnRich 4]

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It looks like austerity will actually take hold in Greece...

They're not exactly doing it all on their own:
Headline: "Eurozone ministers approve $170-billion bailout for Greece"
Story: http://articles.latimes.com/2012/feb/20/world/la-fg-greece-bailout-20120221

Will America learn this lesson and do something before we get to this point?
I doubt it...

[beowulf 1]

It wouldn't be politically correct!!!

If it weren't so serious it would be funny.

[Trafficdiver 8]

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I have several thoughts on this. First, can you imagine is private companies told workers that they weren’t going to be paid for work? Wouldn’t happen. Yet, governments can and DO get away with it. But governments can and will do it.

Private companies tend to go under far before they get this far in debt.

This is what happens when you ignore the free market.

Get ready for this in the US.

[billvon 3,132]

>First, can you imagine is private companies told workers that they weren’t going to be
>paid for work? Wouldn’t happen.

First company I worked for didn't pay me for months. We were just starting up and had no money for anything, including salaries.

>Apparently, there are some 64k people it is paying that could meet consideration of
>being able to work without pay or even return money they’ve been paid. This is
>actually what taxes do. Why not just call it a tax?

Hmm. Would you claim that GW Instruments "taxed" me by not paying me?

>Fourth – I’m amazed Greece is actually doing something.

Agreed. It will be interesting to see what happens. Laying off that many people will decimate an already fragile economy. Will the benefits outweigh those pains?

[airdvr 210]

We have met the enemy....

Please don't dent the planet.

Destinations by Roxanne

[wmw999 2,602]

I think the biggest lesson is that we really, really don't know how to manage a global economy, with desirable goods available locally for less than the cost of producing them.

Make more than enough cheap food available, and many people become fat. Make more than enough cheap goods available, and many people decide they need those, too.

Generally, people control themselves when they have to. Yes, everyone controls themselves in some ways -- but darn few control themselves across the board. We're human. And most of the ones to control themselves across the board are either sanctimonious or control freaks.

You can't mess with human nature; I think we just have to learn this lesson the hard way.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[rehmwa 2]

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>First company I worked for didn't pay me for months. We were just starting up and had no money for anything, including salaries.

that would actually be applicable if you didn't agree to those terms and the government forced it on you and the company....

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[lawrocket 3]

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but darn few control themselves across the board. We're human. And most of the ones to control themselves across the board are either sanctimonious or control freaks.

I like this point! A LOT!!!

What happens when humans control other humans? When humans attempt to control the choices of humans to be in line with what they themselves would choose?

I would think that, in the words of George Banks, "In short you'd have a ghastly mess!" And this is what we are seeing. It's what management of the economy is about - eliminating choices (i.e., how much to pay for labor) and making choices for you (subsidizing industries, paying for defense, leaving no way to opt out of Social Security and be employed, etc.)

My wife is hotter than your wife.

[rehmwa 2]

I was going to go down that point myself, but just looked at and said "what's the point"

glad you did

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[lawrocket 3]

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First company I worked for didn't pay me for months. We were just starting up and had no money for anything, including salaries.

This was understood going in. And “salary” is a bit different from, say, hourly wage. I had lots of friends who joined internet companies for stock options and had an offer to go with one but I chose to stay in school. And with my firm, yes, others got paid while I didn’t a few times. I understand that.

But I think this is different – telling a worker, “Give me some money and you can work here.” Though it’s a lot like an internship, isn’t it?

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Hmm. Would you claim that GW Instruments "taxed" me by not paying me?

No. Because they aren’t a government.

>Fourth – I’m amazed Greece is actually doing something.

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Laying off that many people will decimate an already fragile economy. Will the benefits outweigh those pains?

Yes and no. It depends on the metric, I think. Will the short term pain be worse than had austerity not occurred? Probably not. They might be able to go another year and feel all right. Much like that weird bump in the boob. Getting it biopsied now would hurt more than putting it off until next year.

But what are the long term consequences? That’s what, I think, people now are beginning to really take note of. I know I’ve gotten nearly rote with my discussions of the Simpson Bowles report, but I endorse its findings and plan. Suffer now or suffer more later. I guess I’m the type that would rather get it over with and move forward.

My wife is hotter than your wife.

[billvon 3,132]

>that would actually be applicable if you didn't agree to those terms

I definitely didn't agree to those terms when I started! There really weren't any terms other than "hey, does this sound like fun?" But when it became obvious that we just weren't going to have any money for a while we had to do it.

I could have, of course, quit and gotten another job, but by that time I was interested in helping the company succeed (it was just two of us.)

But come to think of it - aren't the Greeks in the same situation? Government employees can always quit.

[muff528 3]

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They haven't actually enacted the austeriy measures yet, so don't count your chickens before they have hatched. The next group of Greek politicians may undo everything they have agreed to.

It's going to get even uglier very soon.

They're going to get austerity whether they "enact" any "measures" or not. What part of there-is-no-money-left do they not understand?

[billvon 3,132]

>They're going to get austerity whether they "enact" any "measures" or not. What part
>of there-is-no-money-left do they not understand?

Given the behavior of people across the world (including right here in the US) lots of people don't understand that concept.

[muff528 3]

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>They're going to get austerity whether they "enact" any "measures" or not. What part
>of there-is-no-money-left do they not understand?

Given the behavior of people across the world (including right here in the US) lots of people don't understand that concept.

Yep

[GeorgiaDon 385]

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First, can you imagine is private companies told workers that they weren’t going to be paid for work?

Happens all the time. Workers agree to a contract where they are paid some now and some of their pay is deferred into a pension. Workers fulfill their side of the contract and provide the labor/services. After the work is complete, the private company decides to unilaterally renegotiate the deal and renege on the pension. Usually the higher management then congratulates themselves on their "business acumen" and gives themselves big bonuses, paid for with the money stolen from their workers.

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Third – funding cuts to pension and health care are biggies and what WILL be required here and they will affect primarily the sick and the old. Medicare and Social Security shall soon eat up the majority of the US budget and then the entirety of the US budget and then more than the US budget. Greece is showing what happens when solutions are put off because of the political unpopularity.

Agreed this will be necessary. I wish they'd get on with it, not only because the cuts won't be quite as deep as if they wait another 20 years to do something, and partly because I'd like to know just what I have to plan for. My pension is actually my own money, invested, and I'm not counting on social security. But if I need to also put away enough money to pay any conceivable medical costs out of pocket, that probably isn't going to happen. One cancer can cost upwards of hundreds of thousands of dollars; to cover a worse-case scenario you'd need a million or more set aside only for medical. Given that the "safe" forms of investment income pay somewhere between nothing and a couple of %, to live off the interest and not touch the principle you'd need several million put aside for living expenses. I think we're looking at a coming generation or more who are really going to get screwed over, but I don't see any obvious way out.

Don

_____________________________________
Tolerance is the cost we must pay for our adventure in liberty. (Dworkin, 1996)
“Education is not filling a bucket, but lighting a fire.” (Yeats)

[shah269 0]

The lesson of the story is;
Don't hire Goldman Sacks to hid your debt before you enter a union.
Then hire them again to hide your other pile of debt after you host the Olympics.

Use MF Global!

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[SkyDekker 1,465]

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Lessons of Greek Austerity

Not too often do you get to see the future. The question is what is done now that we have?

[kallend 2,182]

If we generalize a little bit, Europe as a whole has taken an anti-Keynesian "austerity" approach to the recession, and is quite likely to have a double dipper. The USA, under both Bush and Obama, has taken a more Keynesian approach, and our economy is growing, albeit slowly.

Yet the GOP is still insisting on an approach that the Europeans are showing us just doesn't work, while the GOP candidates are even demonizing Europe in the GOP primary rhetoric.

...

The only sure way to survive a canopy collision is not to have one.

[wmw999 2,602]

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What happens when humans control other humans? When humans attempt to control the choices of humans to be in line with what they themselves would choose?

I would think that, in the words of George Banks, "In short you'd have a ghastly mess!" And this is what we are seeing.

This happens by people as well as by governments. Rich people exploit poor people because they can. Poor people put up with it because they want to eat.

Not everyone (even capitalists) is honest, so some of that exploitation is egregious, and, because money builds power, people with money have more power in the government as well.

It goes both ways, Jerry. If we go purely capitalistic, then individual bullies will win disproportionately. If we go the other degree, then the government will take more and more resources until it's unsustainable, trying to protect society from the winning bullies.

We don't have enough unsettled room in the world for people sick of financial bullies to go settle a new land. Of course, we often didn't before, either -- we just ignored the native people already living in those lands.

There isn't a right answer. Just movement.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[muff528 3]

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If we generalize a little bit, Europe as a whole has taken an anti-Keynesian "austerity" approach to the recession, and is quite likely to have a double dipper. The USA, under both Bush and Obama, has taken a more Keynesian approach, and our economy is growing, albeit slowly.

Yet the GOP is still insisting on an approach that the Europeans are showing us just doesn't work, while the GOP candidates are even demonizing Europe in the GOP primary rhetoric.

I think the main difference is that the economically stronger EU members will simply offload the "problem" countries. So much for "union". The EU is held together only by documents and decrees ...no kindred spirit among the countries to bind them so there are no qualms about throwing each other under the bus. That will only delay their own economic troubles and the disparity will eventually return Europe to an early 20th Century condition. We, on the other hand, simply print fake money and pass it around to delay the inevitable. We keep accepting the worthless paper and pass it on to others who also accept it. But sooner or later the music will stop and someone (everyone!) will be left holding the bag.

[Snowwhite 0]

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>that would actually be applicable if you didn't agree to those terms

I definitely didn't agree to those terms when I started! There really weren't any terms other than "hey, does this sound like fun?"
....
But come to think of it - aren't the Greeks in the same situation? Government employees can always quit.

My youngest sister has a very rare bone disease, her bones regenerate and morph at an incredible clip. She has actually had 1/2 of her bone mass removed on TWO occasions. A lesser person would have been declared 'disabled' and been living off of the government dole for the last 40 years. Not her. She works for an engineering firm that has been struggling thru the last 2 recessions. They have cut her hours to the minimum allowed for her insurance to continue, and SHE goes to the store, buys their cases of water and pop out of HER paycheck, carries them back to the firm and stocks the fridge, then puts in for a payback for the pop, water and all of the companys stamps. If she is lucky, they will repay her in the next paycheck.
There were a couple of times that the old firm asked her to hold her paycheck for a week or so.
Why does she do it? A) she doesn't have the education required to go somewhere else. B) she is too proud to go on welfare.
We need more people like her in the good ol USA.
She is my littlest sister at 4'9", but she is a BIG deal!

skydiveTaylorville.org
freefallbeth@yahoo.com

[rushmc 23]

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>that would actually be applicable if you didn't agree to those terms

I definitely didn't agree to those terms when I started! There really weren't any terms other than "hey, does this sound like fun?"
....
But come to think of it - aren't the Greeks in the same situation? Government employees can always quit.

My youngest sister has a very rare bone disease, her bones regenerate and morph at an incredible clip. She has actually had 1/2 of her bone mass removed on TWO occasions. A lesser person would have been declared 'disabled' and been living off of the government dole for the last 40 years. Not her. She works for an engineering firm that has been struggling thru the last 2 recessions. They have cut her hours to the minimum allowed for her insurance to continue, and SHE goes to the store, buys their cases of water and pop out of HER paycheck, carries them back to the firm and stocks the fridge, then puts in for a payback for the pop, water and all of the companys stamps. If she is lucky, they will repay her in the next paycheck.
There were a couple of times that the old firm asked her to hold her paycheck for a week or so.
Why does she do it? A) she doesn't have the education required to go somewhere else. B) she is too proud to go on welfare.
We need more people like her in the good ol USA.
She is my littlest sister at 4'9", but she is a BIG deal!

Your sister sounds like she is good people

My thoughts are with her and her family

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln