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Nobel Prize-Winning Economist Demands US Taxpayers "Show Humanity & Save Greece"
When the going gets tough, the taxed get going and that is what Nobel Prize winning economist Joseph Stiglitz thinks should happen. In a Time op-ed, Stiglitz warns (likely correctly) that if Greece continues with austerity, it would be depression without end; and so his solution is simple... "The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika." Strawman much?
Via Time.com,
If Greece continues with austerity, it would be depression without end
As the Greek saga continues, many have marveled at Germany’s chutzpah. It received, in real terms, one of the largest bailout and debt reduction in history and unconditional aid from the U.S. in the Marshall Plan. And yet it refuses even to discuss debt relief. Many, too, have marveled at how Germany has done so well in the propaganda game, selling an image of a long-failed state that refuses to go along with the minimal conditions demanded in return for generous aid.
The facts prove otherwise: From the mid-90’s to the beginning of the crisis, the Greek economy was growing at a faster rate than the EU average (3.9% vs 2.4%). The Greeks took austerity to heart, slashing expenditures and increasing taxes. They even achieved a primary surplus (that is, tax revenues exceeded expenditures excluding interest payments), and their fiscal position would have been truly impressive had they not gone into depression. Their depression—25% decline in GDP and 25% unemployment, with youth unemployment twice that—is because they did what was demanded of them, not because of their failure to do so. It was the predictable and predicted response to the austerity.
The question now is: What’s next, assuming (as seems ever more likely) they are effectively thrown out of the euro? It’s likely that the European Central Bank will refuse to do its job—as the Central Bank for Greece, it should do what every central bank is supposed to do, act as a lender of last resort. And if it refuses to do that, Greece will have no option but to create a parallel currency. The ECB has already begun tightening the screws, making access to funds more and more difficult.
This is not the end of the world: Currencies come and go. The euro is just a 16-year-old experiment, poorly designed and engineered not to work—in a crisis money flows from the weak country’s banks to the strong, leading to divergence. GDP today is more than 17% below where it would have been had the relatively modest growth trajectory of Europe before the euro just continued. I believe the euro has much to do with this disappointing performance.
Managing the transition from the euro to the Greek euro may not be easy, but Argentina and others have shown how it can be done. The government would recapitalize the banks in the new currency, continue with capital controls, restrict bank withdrawals, and facilitate the transfer of money within the banking system from one party to another. The money inside the banking system would be slightly discounted (i.e. worth slightly less than cash—in the case of Argentina, the discount was a few percentage points for ordinary transactions). Pensioners would need to get special treatment.
Meanwhile, Greece would begin the process of debt restructuring: Even the IMF says that it’s absolutely necessary. The Greeks might take a page from Argentina, exchanging current bonds for GDP-linked bonds, where payments increase with Greece’s prosperity. Such bonds align the incentives of debtors and creditors (unlike the current system, where Germany benefits from the weaknesses in Greece).
Greece can easily survive without the funds from the IMF and the eurozone. Greece has done such a good job of adjusting its economy that, apart from what it’s paying to service the debt, it has a surplus. It isn’t even dependent on the IMF and the eurozone for foreign exchange: At least before the most recent stranglehold that Greece’s creditors had imposed, it was running a current account surplus of 1%—5% if we exclude oil exports. (What it was buying abroad in imports was 1% less than what it was selling in exports.) Especially if oil prices remain low, and if its lower “new” exchange rate attracts more tourists and encourages exports, it can weather the storm.
After Argentina restructured its debt and devalued, it grew rapidly—the fastest rate of growth around the world except for China—from its crisis until the global financial crisis of 2008. Every country is different. Economists debate about how responsive exports and imports are to changes in exchange rates. Argentina benefited from a large increase in exports as a result of the commodity boom. There are, however, some striking similarities: Both countries were being strangled by austerity. Both countries under the IMF programs saw rising unemployment, poverty, and immense suffering. Had Argentina continued with austerity, there would have just been more of the same. The Argentina people rose up and said no. So, too, for Greece: If Greece continues with austerity, it would be depression without end.
The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika. At a technical level, the Federal Reserve needs to create a swap line with Greece’s central bank, which—as a result of the default of the ECB in fulfilling its responsibilities—will have to take on once again the role of lender of last resort. Greece needs unconditional humanitarian aid; it needs Americans to buy its products, take vacations there, and show a solidarity with Greece and a humanity that its European partners were not able to display.
* * *
How long before this strawman becomes policy? What we have been told is a storm in a teacup by every asset manager under the sun now appears to be paniccing policymakers on both sides of the pond.
- *U.S. WANTS TO SEE GREECE WORK ISSUES OUT WITH CREDITORS: KIRBY
- *U.S. WANTS TO SEE DEBT SUSTAINABILITY IN GREECE: KIRBY
- *LEW SAYS GREECE'S DEBT IS NOT SUSTAINABLE
- *LEW: THERE IS STILL SOLUTION AVAILABLE IN GREECE
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Fuck Greece.... full stop.
Your avatar looks ready: BOHICA
listen Joe why don't you sell everything you own, and everything in your wife and kid's name, convert that shit to euros and hand it over to the Greek govt. if you and the other handout queens would do this Greece would be in the black.
"The problem in Greece is that no one has been able to get them to actually run the country prudently for eons, and they have gotten by with one can-kick after another, as have so many other countries, as well as cities, counties, and states here in America. It is a dangerous game people play when no problems are addressed, but just pushed out. At some point, they become unsolvable and the system collapses. I feel bad for the people of Greece, but they brought this on themselves collectively by believing in a free lunch." - Bill Fleckenstein
This Keynesian/Marxist asshole can go fuck himself. The US taxpayer foots the bill for damn near the whole world, except for Russia. Go get blood from another stone, douchebag; this one's tapped out.
The 94 million unemployed Americans should all send Greece their EBT cards.
Just another cheesepope who won't lead by example but wants the goyim to pay. What a goofball.
Fuck you in every hole, Jo.
Thanks to the Marshall Plan, Keynesian "stimulus", Quantitative Easing, graft, corruption, and bank robberies, we now have the advantage of hindsight.
None of these schemes result in long-term, sustainable self-sufficiency and prosperity.
Hunting and gathering is probably a better solution for the Greeks and for the rest of the world.
did not even wait to see who is this econmist. Will read this article after posting my comment.
Take away his noble prize. Simple and that of many others for legitimizing stupidity.
Ok I read the article .. please give him another noble prize... Greeks and Germans .. this comment of mine is not againt you .... it is aginst these people who have put you in this situation.
Hey The Italians invaded Greece in 1941. The Germans had to intervene after the Italians were driven back into Albania.
They even acting as peacekeepers for a short time as the Greeks refused to surrender to the Italians.
Teutohellene
Personally I believe that Americans should focus on some way of bailing out the United States of America, not worrying about bailing out far off lands....
Nice sentiment, but would you try to bail out the Titanic as it started to list to one side with a porcelain demi-tasse teacup?
Look at usdebtclock.org
There is no bailing us out so pick a second choice please.
We already paid foreign banks 16 trillion in bailouts.
Doubledown: the banks got the moeny.
Professor Stiglitz knows that de Rothschild Bank has more money than the American taxpayer that has been fleeced by the tribe for the socialized losses that got dumped on them in 2008. The American taxpayer stands to make nothing by propping the Greeks up so that the Synagogue of Satan, and the tribe Zionists, can fleece them one more time on another raw deal designed by a Jew that does the backstroke in the public trough. Moreover, notice how Stiglitz negotiates with your money whilst his is offshored in the Cayman Islands?
The socialists are in denial that their little eurotopia is going the way of the dodo. Socialism ends when you run out of other peoples money and guess what's happening.
Governmentalism ends when you run out of other people's money. Socialism is just one form of governmentalism.
governmentalism
n.
the trend toward expansion of the government's role, range of activities, or power.
[1840–50]
gov`ern•men?tal•ist, n.
http://www.thefreedictionary.com/governmentalism
Stiglitz, you idiot, feel free to give all YOUR money to the Hellenes. I'll be keeping mine...
"How much for the children?. I want to buy the children".
"...and that is what Nobel Prize winning economist Joseph Stiglitz thinks..."
"...and that is what Swedish National Bank Economic Sciences Prize winner Joseph Stiglitz thinks..."
Fixed that for ya. There is no Nobel Prize for economists.
As a Canadian, I support this proposal and I hope my generous American neighbours will consider bailing out Canada too when our housing bubble bursts.
To do my part and show that I am willing to share your sacrifice, I may take a sailing vacation in Greece.
(. . . . it is time for the U.S. to be generous with our friends in Greece . . . ."
I'm in for 20 Gyro sandwiches. Can the be frozen?
Send your own money to Greece, Stiglitz.
Leave everyone else outta your fantasies.
PS: Locusts will not stop until everything is gone. Greece has been just like locusts for years, has habituated this behavior, and will continue the same behavior until the same behavior literally cannot happen. To feed them more free food just makes the ultimate damage to Greece worse, and spreads the damage to others.
"The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need"
"Our friends"?....dafuq.....This guy must be brain damaged because I don't ever seem to recall starting a friendship with the Greek government.
So according to Stiglitz US taxpayers should pay for European banks' reckless lending? German and French banks issued loans to Greece, which now can not pay them back, so Greece should default and banks should take losses. Wtf US taxpayers have to do with it?