Greek Referendum Poll

[Razgovory]

Well let's see.  People don't live as long as governments.  When people die the debt must be paid.  Government debts can theoretically last indefinably.  Families can't raise taxes or sell bonds.  A government's debt is often to it's own people.  Households don't normally owe themselves money.  Debt can be quite beneficial to governments, the US took on the debts of it's member states to create credit.  I don't think a household could do this.

Dead people with no net worth don't have to pay their debts.*  Families can reallocate their income to different types of expenditure, just as states can reallocate their income to private consumption and government spending.  So what if families can't issue bonds?  Debt is debt.  The government doesn't owe money to itself in the case of domestically held debt; it owes it to individuals.  I don't know what you mean by "took on debt to create credit."

The real question (and I believe it was asked last time and someone disappeared), insights does the household analogy grant us?  None that I can see.

The insight it provides us is that in both cases you can borrow money now and live high on the hog, but eventually you have pay it back and live lower on the hog, or not pay it back and lose your ability to borrow.

Debts come out the estates of a dead person correct?  If there is nothing to take then the debt is never recovered.  It's one of the many differences between governmental debt and personal debt.  Debts owed by a government of the people to the people are a debts owned to itself.  There is no household anology.  The insight you have gained from this analogy is exactly why it's a harmful analogy. Debt is not debt.  Way back in Washington was President, the US founded the first bank of the United States.  It took on the debt of the individual states in order to establish credit for the lending of money.  In this way, debt was good.  Household debt is almost never good.  Debt owed by a individual or a family isn't much like the debt of a government.  In fact, a government running surpluses can be harmful to the public as it often does so at the expense of the savings of the public.

[Fate]

Household debt is almost never good.

Household debt is generally good. Very few are going to buy a house or a college degree with 100% cash upfront.

[MadImmortalMan]

Household debt is almost never good.

Household debt is generally good. Very few are going to buy a house or a college degree with 100% cash upfront.

Right now, I'd be happy to have never bought my house or my college degree. 

[Admiral Yi]

Debts come out the estates of a dead person correct?  If there is nothing to take then the debt is never recovered.  It's one of the many differences between governmental debt and personal debt.  Debts owed by a government of the people to the people are a debts owned to itself.  There is no household anology.  The insight you have gained from this analogy is exactly why it's a harmful analogy. Debt is not debt.  Way back in Washington was President, the US founded the first bank of the United States.  It took on the debt of the individual states in order to establish credit for the lending of money.  In this way, debt was good.  Household debt is almost never good.  Debt owed by a individual or a family isn't much like the debt of a government.  In fact, a government running surpluses can be harmful to the public as it often does so at the expense of the savings of the public.

The domestic borrower who is not repaid after a default is not going to be content with the explanation that the money was just owed to himself, and is likely not going to willing to lend money to himself in the future, or only at a very high interest rate.

I still don't understand what you mean by the states' debts were taken on to establish credit.

I don't understand what you mean by a government surplus can be at the expense of private savings.

[Razgovory]

Debts come out the estates of a dead person correct?  If there is nothing to take then the debt is never recovered.  It's one of the many differences between governmental debt and personal debt.  Debts owed by a government of the people to the people are a debts owned to itself.  There is no household anology.  The insight you have gained from this analogy is exactly why it's a harmful analogy. Debt is not debt.  Way back in Washington was President, the US founded the first bank of the United States.  It took on the debt of the individual states in order to establish credit for the lending of money.  In this way, debt was good.  Household debt is almost never good.  Debt owed by a individual or a family isn't much like the debt of a government.  In fact, a government running surpluses can be harmful to the public as it often does so at the expense of the savings of the public.

The domestic borrower who is not repaid after a default is not going to be content with the explanation that the money was just owed to himself, and is likely not going to willing to lend money to himself in the future, or only at a very high interest rate.

Yes, this is a good reason why the analogy of household account doesn't work.  It doesn't make sense.

Here's an article I found recapping what I was discussing with creating a national debt.

http://www.usnews.com/opinion/articles/2008/09/18/past-present-alexander-hamilton-and-the-start-of-the-national-debt

Here's one on the possibility of government surplus decreasing private savings.

http://www.forbes.com/sites/johntharvey/2012/07/18/why-you-should-love-government-deficits/

[Admiral Yi]

That's why it doesn't work.  For people to lend a government money the interest rate has to be attractive and there has to be some likelihood of repayment.  Lenders don't become indifferent to those things when the government in question is their own.

Now, granted, governments have coercive power of their own citizens that they don't have over citizens of other countries.  Governments can simply steal private wealth if they want to, or if you prefer a slightly more ambiguous term, they can enforce savings.  That's what Stalin did with the kulaks.  However most governments have decided the long term repercussions of this policy are not worth the short term benefits.

Your article was interesting, but I still don't know what you meant by the US took on state debt to create credit. 

Your Forbes blogger is a bit of a knucklehead.  It's perfectly possible for a government to be in fiscal balance and for businesses to borrow (or to float shares, essentially the same effect) to finance expansion.  It is also possible for parts of the population, say families buying their first house or paying for higher education, to borrow, and for other parts, say families with kids out of college, to lend.  The fact that a government is in balance or running a surplus doesn't mean no one has the ability to invest.

[Ed Anger]

I wish that the Greek army would get off its ass and coup these clowns.

[Grallon]

so far, most of the measures that Greece should have adopted have not been.  Even if they were, you don't go from bankrupt to billionaire in a few weeks.
If you look at our dear province, we are poorer than we were in the 1960s, we are poorer and less educated than most of our neighbours, the only US State comparable to us would be Mississipi, one of the poorest, yet we insist on doing the same thing we have been doing for the last 50 years with no results.

Yes, yes, yes, we're unworthy and thank all the gods Harper, the federal regime and the local Liberal crime syndicate are there to prevent us from sinking even deeper...  Typical 'collabo' nonsense discourse. 

You're a federast that ignores himself Viper: *whiny tone* We can't do it alone!  We need to be handled by those 'who know'!  It's fucking pathetic!  You're talking to me about the debt of Qc?  It has more than doubled under the filthy Liberals since 2003; it is now 274B and represents around 11B in yearly payments.  Remove it, and its attendant payments, and Qc suddenly finds itself in positive territory, with money to spare...  Oh look, who'd have thunk?!



G.

[Razgovory]

And here is why an Independent Quebec would just be Haiti 2.

[Zanza]

I wonder if the EU might opt for a "Gremain" scenario, no matter how the results are. Donald Tusk's latest comment sounded a bit like that. Keep Greece in the Euro by increasing ELA so their banks don't collapse, but don't give any more loans to the Greek government. The Greek government would then probably have to use some kind of scrip to pay its obligations. That will be hugely unpopular and if they then make it legal tender, it was the Greek government that left the Euro not the EU that kicked them out. 

[Monoriu]

I wonder if the EU might opt for a "Gremain" scenario, no matter how the results are. Donald Tusk's latest comment sounded a bit like that. Keep Greece in the Euro by increasing ELA so their banks don't collapse, but don't give any more loans to the Greek government. The Greek government would then probably have to use some kind of scrip to pay its obligations. That will be hugely unpopular and if they then make it legal tender, it was the Greek government that left the Euro not the EU that kicked them out.

The downside to that approach is that, if Greece leaves the Euro and do relatively well after the initial shock, the Euro will be in serious trouble.  Next time something happens, people in some small Euro country will say, hey it is not the end of the world if we leave.  Leaving is better than austerity. 

It is better to keep Greece in and impose austerity on them.

[celedhring]

Oxi, morons!

(okay, I just wanted to make that pun).

[Martinus]

Paradoxically, probably the best solution for Eurozone would be if Germany went back to the Deutsch Mark.

[Martinus]

Raz, debts do not come out of estate (or at least it would be weird if they did). At best, the heirs are not liable beyond the value of assets in the estate.

[Iormlund]

Paradoxically, probably the best solution for Eurozone would be if Germany went back to the Deutsch Mark.

I agree, then I would earn strong DM and be able to exchange them for weak Euros when I went back home.