Do Greek voters think they can just go on spending more than they earn forever?

dtsazza

I think it's clear to everyone that if Greece leave the Euro, they will massively devalue the New Drachma (or whatever it's called) by monetising the debt. Hence massive inflation.

Now what I find interesting about that is inflation is sometimes described as a "tax on capital". Since the common consensus is that Greece is in this problem because they haven't been able to collect taxes correctly, this actually stands up a little better as a strategy. While the analogy isn't perfect, it does behave similarly to a tax on cash holdings, with the added benefit that it's collected automatically and entirely accurately, without relying on any input from the Greek people themselves.

High inflation is not an ideal situation by any means, but it might just be the least bad option here.

wotsthat

dtsazza wrote: »

Now what I find interesting about that is inflation is sometimes described as a "tax on capital". Since the common consensus is that Greece is in this problem because they haven't been able to collect taxes correctly, this actually stands up a little better as a strategy. While the analogy isn't perfect, it does behave similarly to a tax on cash holdings, with the added benefit that it's collected automatically and entirely accurately, without relying on any input from the Greek people themselves.

Isn't one of the problems though that the Greek tax avoiders/ evaders are sending some of their euros for a holiday in German banks. Inflation tends to impact the poor more and it would have the same effect here - the poor would be considerably poorer and, arguably, the rich might even get richer.

Graham_Devon

Really2 wrote: »

Correct, that is called democracy if it was just him it would be a dictatorship.

He needs 151 votes to pass any legislation out of 300 = Democracy.

Well he got 153 votes and passed the confidence vote.

Not sure if thats good, or bad news really! Don't know either how annoyed or relieved the eurocrats may be about it.

John_Pierpoint

dtsazza wrote: »

I think it's clear to everyone that if Greece leave the Euro, they will massively devalue the New Drachma (or whatever it's called) by monetising the debt. Hence massive inflation.

Now what I find interesting about that is inflation is sometimes described as a "tax on capital". Since the common consensus is that Greece is in this problem because they haven't been able to collect taxes correctly, this actually stands up a little better as a strategy. While the analogy isn't perfect, it does behave similarly to a tax on cash holdings, with the added benefit that it's collected automatically and entirely accurately, without relying on any input from the Greek people themselves.

High inflation is not an ideal situation by any means, but it might just be the least bad option here.

All the smart ar3e tax avoiders in Greece have switched their ill gotten gains into Swiss Francs long ago - I don't think the Greek tax man has the ability to lean on Switzerland.

The lesser tax dodgers are in Cyprus - so that could the next domino.

John_Pierpoint

A._Badger wrote: »

The Swiss would disagree with you. And Switzerland is better governed than any of that ragbag assembly calling itself the EU.

The Swiss nationals are a close knit bunch, the males have all been in the army together. (A little bit like Israel).
They have a large number of residents that are "A" "B" or "C"...... people, including "Frontellier" commuters. It also has a large community of free of tax international civil servants.

Things have changed a bit since my days of being an illegal economic migrant, from a near bankrupt off shore island in the 1970's, but this link gives a flavour of the system:

http://www.expatica.com/ch/essentials_moving_to/essentials/Residency-and-work-permits-in-Switzerland_13351.html

So with one "resident" in 5 being a foreigner minding his "P's" & "Q's" and a system for sending them "home", when they look like becoming a burden on the state, Switzerland cannot really be compared with other counties, inside or outside the EU.