When Austerity Meets Reality

pqrdef

ILW wrote: »

Greeks and similar have to realise that without a lot of work and sacrifice

Sacrifice? That would be truly desperate. Anyway, it never works with goats.

Though I suppose, if they were to rip out the beating heart of Angela Merkel, that could help.

ILW

pqrdef wrote: »

Sacrifice? That would be truly desperate. Anyway, it never works with goats.

Though I suppose, if they were to rip out the beating heart of Angela Merkel, that could help.

It did mean it in the sense of paying your taxes etc.

pqrdef

Mrs_Bones wrote: »

A reporter said: ‘Our sources at the fund are telling us they had no idea of the extent of the anger and anti-austerity feeling in Greece. They are amazed.

The IMF are used to supine populations. A lot of people in Argentina didn't feel very rescued, but the IMF didn't notice.

MacMickster

ILW wrote: »

The EU may have been complicit, but in the end it was the Greek people (through elected governments) who decided to go on for years spending way more money than they were earning (or collecting). Nobody forced them, they just enjoyed the ride and are now complaining about having to pay the fare.

The problem is that it was not just the Greeks, but most western countries who have, for many years, spent more than their income (both as nations and individuals). The Greeks merely did this even more than most, so the adjustment required to their lifestyle is even greater than in other countries.

The fact is that in most countries, the austerity that we are talking about is only slightly reducing the deficit, while the overall debt continues to increase fairly rapidly.

We must not, however, look at reducing the deficit deficit as being the main goal for any developed country. If to do so damages the future earnings capacity of a country then it is the wrong road to go down. A vagrant living on the streets has no deficit or debt, but I doubt that anyone would prefer the vagrant's position to a skilled IT professional who is struggling to servioce £100K of personal debt. It is important for that IT professional to maintain and improve his skills, and keep a car enabling him to work throughout the country, even if that will mean a temporary increase in debt.

We also need to accept that the idea of perpetual growth of our economy is not feasible. As the BRIC economies flourish we will inevitably see a transfer of the distribution of the world's wealth towards them. We in the UK need to fight to remain more competetive than our European neighbours.

Even so, we will be faced with a falling standard of living (and falling levels of social security) for decades to come. Of course this will prove unpalatable to populations who have grown accustomed to an extravagant (and unsustainable) standard of living, and so will provide a recruiting platform to political groups who appear to offer the promise of a new utopia. Unlike Hamish, however, I am not concerned that Greece or France are on their way to becoming the modern day equivalent of Nazi Germany. In the 1930s the German Nazis offered a vision of world domination as a super power. It is difficult to see the Greek neo-nazis being able to do the same.

ILW

MacMickster wrote: »

We must not, however, look at reducing the deficit deficit as being the main goal for any developed country. If to do so damages the future earnings capacity of a country then it is the wrong road to go down. A vagrant living on the streets has no deficit or debt, but I doubt that anyone would prefer the vagrant's position to a skilled IT professional who is struggling to servioce £100K of personal debt. It is important for that IT professional to maintain and improve his skills, and keep a car enabling him to work throughout the country, even if that will mean a temporary increase in debt.

.

Good analogy, but in the case of much of Europe, I believe flawed.

Say the IT professional was never worth what he was paying himself, hence the debt? Bankruptcy usually follows.

pqrdef

ILW wrote: »

Say the IT professional was never worth what he was paying himself

Huh? Reading this forum, I thought everybody making 6 figures in the private sector was worth every penny, without question.

MacMickster

ILW wrote: »

Good analogy, but in the case of much of Europe, I believe flawed.

Say the IT professional was never worth what he was paying himself, hence the debt? Bankruptcy usually follows.

Certainly he would need to look at the mistakes that he has made in the past and implement a plan to pay off his debts over time, but such a plan should not include selling the car and cancelling a training course, as these are required to compete with other IT professionals in the future.

The best way to be able to pay off his debts would be to look for ways to get an edge on his competitors and so increase his future earnings potential, then assign all increased income to debt repayment - not merely cutting spending at all costs.

ILW

pqrdef wrote: »

Huh? Reading this forum, I thought everybody making 6 figures in the private sector was worth every penny, without question.

In this case he is paying himself more than his clients are paying to him, and just using borrowing to keep up a lifestyle that is above him.

Out,_Vile_Jelly

vivatifosi wrote: »

We won't all be nazis by Christmas, but here's my issue with it. Because in the UK we have a first past the post system, with a relatively small percentage of the vote it is almost impossible to get representation. That could be seen as a bad thing, as demonstrated by the recent apathy in UK local elections.

The flipside of that coin however is that where you have a system of some form of proportional representation, as in Greece, then those people do get representation. In the case of Golden Dawn they have achieved 21 seats in the Greek parliament, approximately 7% of the total. The Liberal Democrats hold less than 9% of the seats in the UK Parliament, but due to the fact that there was not a majority at the last election they hold a degree of power that is shaping the political agenda. What would be scary would be if Golden Dawn was able in some way to shape the agenda by virtue of its winning seats, rather than winning votes as the BNP has done.

This argument against proportional representation makes me despair. If fringe parties like the BNP seem to be popular, the civilised solution shouldn't be to rig the voting system so they're kept out, it should be to robustly engage with them by all democratic means to expose their woeful policies to the light of rigour and reason. Democracy doesn't mean you get to ignore parties you don't agree with.

FTBFun

Out,_Vile_Jelly wrote: »

This argument against proportional representation makes me despair. If fringe parties like the BNP seem to be popular, the civilised solution shouldn't be to rig the voting system so they're kept out, it should be to robustly engage with them by all democratic means to expose their woeful policies to the light of rigour and reason. Democracy doesn't mean you get to ignore parties you don't agree with.

Couldn't agree more with this.

IMO the situation in Greece as regards the fringe parties is a protest vote rather than any meaningful endorsement of neo-fascist political parties.