Yes the Greeks are desperate.

That doesn't make them any less delusional about the choices they've made. Until they get rid of the electoral accident, rest of the world is not obligated to finance their delusions.

And yes the previous governments are corrupt tax dodgers. That doesn't make Syriza any less corrupt or more competent. Frankly the PASOK was the lesser of the two evils.

Vast majority of economists, Krugman included, said and most continue to say, austerity and structural reforms were and are necessary in Greece. It's painful, especially so since the patient is refusing the medicine.

Varoufakis was so destructive at the negotiating table Tsipras had to sideline him despite ideological agreements. And it's true Varoufakis put forward little substance policy wise. You can see that with lack of concrete proposals 3 days after the referendum. Concrete proposals weren't even worked on under Varoufakis.

Make up your mind amongst yourselves because the following two can't both be true:

1) Greece is so screwed up that nothing can be done and no bailout should happen until structural problems are fixed.

2) Syriza is to blame for everything that's gone wrong due to their poor negotiating stance and refusal to bow down to the overlords and if it wasn't for them, Europe would've quickly bailed out Greece and everything would be fine.

Nor can these be both true.

1) Greece's completely out of control in terms of spending and must increase taxes and cut spending to become sustainable

2) Greece has been running budget deficit in the 3%-15% range despite an incredibly poor tax collection effort where they're collecting like 50% of what they're owed.

All I'm seeing is that a bunch of people who have no idea what they are talking about seem generally happy that there's some screwed up country where people are suffering and are willing to mix together a bunch of incoherent talking points to feel better or something.

What are you babbling about? Siemens paying off the Greek government officials to win state contracts is private sector corruption?

lolwow. At least grizy/seattlelou/tien are generally decent posters. Let's not pretend that each of us is not familiar with the other's body of work. Btw, if it's not already abundantly clear, I'm something like center-right and have moved further to the right since my earlier posting days. But apparently we've entered a stage where Ben Bernanke and Hank Paulson would be considered left pinkos.

That's why I am surprised at your refusal to acknowledge Greece's part in this whole mess or what the EU has given up.

"Debt relief" gets all the headlines but EU has given Greece a LOT of debt relief. The troika have refrained from writing down face principal values because it's helpful for everyone involved. Merkel gets to pretend hundreds of billions of Euros haven't been lost and Greece gets to pretend they are still being crushed by debt.

But in reality, the extended maturities, lower interest payments, rebates/refunds of "profits", and yes, some outright haircuts, have amounted to pretty massive "debt relief" by any objective standard.

You do have a point though. What they should have brought up is post-WW1 Germany, when austerity, hard money, insistence on full repayment and debt deflation worked out so well for everyone involved.

Its very lazy to conflate the arguments of people who are disagreeing with you on different issues.

How is bringing up the Siemens corruption in any way at all relevant?

A private sector company bribed Greek the Greek civil service so its ok to expect the same civil servants to administer stimulus money?????

Eh?

Referring to Siemens seems to be just oh look business can be bad to, yea and?

Over what time-frame though? "The following years" is pretty ambiguous and unconvincing.

The major economists I've heard talk about this (Paul Krugman, Steve Keen) both laugh at the idea that austerity in the form of spending cuts will do anything other than push Greece further down a black hole. That's not to say that the Greek deficit doesn't need to be dealt with, but it seems that overhauling the tax system is where energy should be concentrated. Fwiw I think it was Bernie Sanders who said that, for the American context, if all the loopholes were ended that enabled tax evasion via offshore accounts, the US deficit could be annihilated overnight. And that doesn't surprise me at all, considering the enormous wealth disparity between the American top 1% and the rest. If the inequality situation is at all similar in Greece, I imagine gathering all the taxes that up until this point have been camping offshore would go a long way to getting them out of this mess.

Yeah, like the situation in post WW1 Germany resembles the problems of current day Greece extremely well. Did you learn this from Varoufakis?

Don't worry, there's no inequality like that in Greece, everybody dodges taxes.

Even if they fix the taxation, their public sector is beyond bloated. Greece for example has 4x the teachers per student that Finland has. And they can not easily be fired. Even if some reason they are, everybody will be well compensated.

You're so fixated on the history of the situation in terms of who gave up what and who did what. It's not important. It's like having a fight with a wife or an old gf and somehow the fact that 10 years ago she had give up a promising job to move close to you gets dragged into who should do the dishes and it's not at all constructive. The idea that random young Greeks should suffer to pay back Germany because some Greek politicians conspired with Germans to steal money from the government to split the proceeds doesn't make sense from a moral perspective either, but morality has nothing to do with the situation.

What's important is this - does the current economic policy make sense? If it's wrong, in what direction is it wrong? Which political actors are trying to move it in the right direction and which political actors are trying to move it in the wrong direction. These are the meaningful questions. The reason I'm bringing up Europe's fault is 1) to illustrate an alternative morality tale and also because European politicians are still campaigning everything that led to the current situation. Syriza is not campaigning to bring back what led to the situation. Europe is.

Insert if a technocrat party were in power and bowed to demands, Greece gets rescue package and both are in fact true.

Indeed Syriza did take a pretty big bailout package.. and yes Greece did grow until Syriza basically said they'll throw everything in reverse.

These two can be and in fact are true. They expect bad collections so they impose moronically high taxes that will only be partially collected. This is actually not unique to Greece. Same phenomenons, although to lesser extents and painful (politically and economically) reforms have been implemented, in Italy, Spain, and Portugal.

I think it was 25 years but it is highly dependent on the type of investment (I think S & T was pretty good), the effective tax rate and other factors


The problem with that is you cant expect the economic activity to remain unchanged if you close all tax loopholes. In any economy there are a lot of businesses that are only profitable while they are not paying the taxes they are supposed to. Obv tax reform would still be good for Greece.

The situation on the ground today right now is Greece lacks the structural or political capability to become a competitive economy, even with a devalued drachma. We know this because Greeks have repeatedly proven themselves incapable of making the hard choices.

If that means being fixated on the past, yeah, we should be.

The Eurozone is basically treating Greeks like children because they are acting like children.

It's not moralizing. It's about staring down reality in the face.

You're not at a level where you yourself can produce a coherent enough narrative to be independent from others. Embrace the box.

Greek politicians conspire with Germans to borrow money from other Germans in the name of the Greek people and steal the proceeds. Clearly the Greek people are to blame.

They may not be campaigning but they are working exactly on what led to the situation. Employing their people in key places, creating government jobs when they have no funds to do so, negotiating tax relief for the wealthy (as with the Swiss bank accounts). Exactly what led to the situation, just under a different flag.

I have no idea who you are and am not aware of your body of work, but if an off hand comparison to Steel House rustles your jimmies so much you have to start using such tedious ad hominems, then that must be a good thing.

Anyway gonna go with:

Asking Greece to raise pension age = lunatic fringe...

PHHHHOOONEBOOOOTHHHHHHH

So Greece is not screwed up - they just needed Austerity Package #8 to kickstart their economy? And Europe is magically not throwing good money after bad in this scenario?

Wait, you actually think this is a good idea?

https://en.wikipedia.org/wiki/Deadweight_loss
https://en.wikipedia.org/wiki/Consumer_choice

Or for that matter this is relevant:

https://en.wikipedia.org/wiki/Predatory_pricing
https://en.wikipedia.org/wiki/Loss_leader

Since people ITT seem to require a lot of handholding, let me explain the obvious - tax is a price and widespread tax dodging indicates that your price is too high relative to the substitutes. We can talk about culture of tax dodging and that kind of stuff, but what that actually means from an economic perspective is that high prices led to a burgeoning market for competitive products/practices. The correct thing to do, beyond increasing tax collection efforts to increase the cost of competition, is also to lower your price to kill competition. Establish a dominant market position first and only then increase prices.

Be that as it may, that's just business competition. As long as all companies are on a level playing field taxation wise (within a progressive tax code still), if some fail because they're too inefficient to be able to deal with the burden then so be it.

Btw, for anyone itt who is of the opinion that taxing too much will cause capital flight, that's only partially true. The whole "race to the bottom" thing is well documented, but there are some who argue that it's exaggerated because when foreign investment comes and builds a major factory in your country, but then the new gov't comes in and hikes taxes on you, it's not straightforward to pick up your things and leave just because of the tax burden. Sometimes the enormous cost of capital relocation is simply still worse than the cost of staying put and paying the relatively high taxes.

I do remember educating you on common sense finance stuff in a thread where you were speculating on some phantom mechanism through which the evil investment banks are stealing money from the people:

http://forumserver.twoplustwo.com/sh...&postcount=644
http://forumserver.twoplustwo.com/sh...&postcount=647
http://forumserver.twoplustwo.com/sh...&postcount=653

Yup, I'm the steelhouse, lol.

No I don't think the lax tax collection is good. I am pointing out its dysfunctional and in dire need of reforms.

Your whole tangent on tax=price doesn't really address people not actually paying the bills.

In Greece's case, it creates a toxic atmosphere where businesses either go huge and become above the law or stay small and under the radar.

It is also the overall size of the economy. As a simple example if all tax loopholes were closed there would be a lot fewer tax attourneys. I was not arguing against closing tax loopholes, I was just commenting on why what Bernie said is too simple and in reality does not work out like that. I'm all for closing tax loopholes esp when it comes to Greece.
But they reality is also closing tax loopholes is quite tough. Not only is there a lot of lobby pressure during the legislative process against it, with any new legislation typically new loopholes are introduced accidentally.

But this is exactly what the euroreforms are exacerbating - I mean, how high are all these tax rates now? It's completely insane to expect anyone to pay taxes in full.

Of course it does - tax dodging has a cost and it's not zero. Also, like with most substitutes, there's an economy of scale in play here - the more people dodge taxes, the cheaper it becomes. The ecosystem grows around tax dodging to make it more convenient. Much like piracy of digital goods, it's correct to think of the choice not to pay as effectively a competitive product sold by another company. This means the correct way to go about is a two-pronged approach where you attack tax evasion to increase the cost of tax dodging and you also lower the tax rates to lower the price of compliance. In some cases they may have to be clever - maybe tax on one end of a transaction and offer a full rebate on the other - this makes it easier for everyone to reach compliance at no cost. Again, this is why Europe is failing because all of this costs money upfront for a future payoff and Europe is hellbent on those reforms that bring about immediate results.