As has been exhaustively explained everywhere, including this blog, Greece is currently running a primary deficit–meaning that even if they defaulted, their budget wouldn’t balance. And since defaulting would cut off the flow of credit, they’d actually be worse off than with almost any of the austerity plans proposed by their creditors. So watching them threaten to walk away is somewhat reminiscent of that famous moment from Blazing Saddles.
Do not make me shoot the unicorn…
It seems that socialists never learn and that utopian dream is just around the corner.
“It seems that socialists never learn…”
I’m quite sure Ken that all the people actually -responsible- for the Greek debt have a fast horse and a hidey-hole in the south of France all picked out and well stocked with cigars.
Socialists learn just fine. Its US IDIOT CITIZENS that never learn. Just wait until the money isn’t worth anything. Then you’ll see some riots.
I don’t remember that scene from Blazing Saddles. The one I remember involved a campfire and men eating beans.
I guess that makes me raaaaaacist.
I wonder if the Greeks have figured out that their preparedness for default is overshadowed by Germany’s fear of cascading bank failures if that were to happen. Merkel will play that to the very end before she blinks otherwise she is political history.
On a related topic, I wonder if Blazing Saddles is allowed to air on Network television with its soundtrack unaltered, allowing the white man beside the preacher to audibly utter the N-word. I’m guessing not.
Well Louise here is some context, Nobody more or….
http://www.youtube.com/watch?v=Z_JOGmXpe5I
Well Louise here is some context, Nobody move or….
http://www.youtube.com/watch?v=Z_JOGmXpe5I
Whoops I guess Louise and I should have hit the link first.
John C,
Very true and yet last week the German banks announced they will hit their new capital ratios without having to issue equity or get driect injections from government.
Implication, the German Banks are fast approachin the point at which they can tell the Greeks to sod off and write off the debt. That means
1) Germany and German taxpayers wont be stuck
2) The Greeks lose all leverage in negotiation
3) The French are left holding the bag
While Greek insolvency is an officially unacknowledged fact the timing of the bankruptcy is everything. There were always two paths, muddle through (play for time) and Force Default.
The problem with option 1 was the Euro banks had never shown any desire to take advantage of the time they received in the past, i.e after 2009. The problem with option 2 was the disruption it would cause (even though its inevitable)
The ermans look like they may have successfully navigated option 1. The French and the Greeks, less so.
No negotiatd default will help Greece until they get to Operational Budget Balance. Their hope, and thats all it is, is to obtain regular equalization payments (a la Nova Scotia) to fund themselves, and the liklihood of that happening without German budget control is next to nil.
But the point remains, the more the clock ticks by the less leverage the Greeks have. And then they will be left to their own results. The Euros and US will just ensure the Greek military is properly funded and functioning (as they should)
Sounds like a piece I read in one of the UK papers last week. An honest to god economist suggested that the UK should just print more money to get out of their economic problems.
To the lady who tweeted the link, I suggested she get her wheelbarrow now so that she would have a way to carry the cash for milk and a loaf of bread.
The McArdle article has been updated to reflect the fact that they Greeks are running a primary *surplus*. Not that it really matters considering their Wagnerian deficit, but might as well stick with the facts, eh?
Atlantic Jim, that was good advice. It is not as if that would be the first time wheelbarrows would be used for this purpose. Once this lady gets paid twice a day she might wise up.
Ken, she didn’t need the wising up. She was the one who posted the link to the “economist” in disbelief.
I was just making a helpful suggestion……LOL!
http://www.telegraph.co.uk/finance/comment/9016177/Will-printing-more-money-solve-our-ills.html
It is almost comical to read Euro pundits and politicans talk about how it is Germany’s responsibility to bail Greece, Portugal etc. AFter all it is Germany who has benefited the most from the EU. What they don’t stop to consider is whether Germany thinks that the EU can be saved in the first place. WHo ever knew when you offered a car for sale and a Greek buyer bought it that it meant you as the seller became responsible for the buyer’s mortgage back home? This high finance excapes me!
AS per usual back here in Canada such questions rarely get asked. As ONtario and Quebec rack up unfunded liabilities in excess of $900 billion we merrily move along debating the Northern Gateway project. Oh, yes, I forgot the native industry which annually absorbs over $11 billion from the feds. I guess this debate will occur when housing values drop 25% and local governments cannot fund themselves.
ct, the Germans are caught in a bit of a no-win situation. If they bail out Greece the way the pundits want, they’re on the hook for every other one of the bad debtors in the EU. And Italy’s problems will literally break the bank if they don’t get their structural deficit eliminated.
If they don’t, sooner or later the Euro collapses, as one nation after another is forced out. The result will be that the new/old Deutchesmark will soar through the roof in value, killing Germany’s exports and bringing on a huge industrial recession.
The problem the Germans have is that the German voter is opposed to both of these solutions, but there’s no other choices. All roads lead to one of these two outcomes.
ct “I guess this debate will occur when housing values drop 25% and local governments cannot fund themselves.”
I can solve that one. Raise the mill rate 33.33 %.
Ward, I did hit the link. How did you think I knew that that clip was not in my memory bank? You do realize that Blazing Saddles was in the theatres maybe 35 or so years ago. Some people may have good memories, but I don’t. I do remember thinking at the time that it was a stupid movie, like most of Hollywood’s output.
This is the scene I remember: http://www.youtube.com/watch?v=R6dm9rN6oTs
Ya, juvenile, I know.
I Googled Blazing Saddles and sure enough it came out in 1974. For the mathematically challenged, that’s 38 years ago this year.
Greece needs to do a referendum on the debt plan. The solution is going to be painful no matter what they do, but the Greek people need to own the decision. If they don’t have that chance, things will tear apart there. If people vote on clear objectives then they know the price was their choice. However the EU types will never let the great unwashed make such decisions.
John C,that word has been editted out of every TV version since about 1976.
Mel Brooks was the Master of political incorrectness. Between “Blazing Saddles” and “The Producers” there’s enough material to cause heart failure to every anal retentive liberal on the planet.
Maybe Greeks and other Europeans should take a page from the history of the Old West and their methods of dealing with horse thieves,might get some of the politicians to actually seek a solution.