Piketty: Germany Has Never Paid Its Debts

[Martinus]

Elections don't mean you don't have to do what you promised.

That's an absurd statement.  In a fully sovereign state an election can cause a state to break any promise,  even those concerning war and peace, let alone debt repayment.

And then be prepared to face the consequences for lack of fair play.

But again, this is more the sign of Greece's weakness than any lack of "fair play" - powerful countries withdraw from treaties and renege on deals all the time and they are very rarely punished for it.

[Martinus]

But in any case, this is apples and oranges. Even if "pacta sunt servanda" applies to sovereign states, it only applies to treaties with other sovereigns. A loan is not a treaty.

[Monoriu]

If Greece treasures its sovereignty so much, it should avoid putting itself in a position where it depends on the generosity of others for its survival.  Hong Kong amasses a large cash reserve and keeps our budgets balanced because we don't want to depend on London or Beijing under any circumstances.  We treasure our financial independence and don't want to give our sovereigns the chance to take over.  This of course comes at a cost.  It means we don't have a public pension system at all and some of our old have to go through rubbish to look for food.  Greece took a different path.  It chose to give the pensioners a good life, and much more.  The cost is that when financial crisis happen, it will need help, and the people who provide such help will have say over public policy. 

[garbon]

Elections don't mean you don't have to do what you promised.

That's an absurd statement.  In a fully sovereign state an election can cause a state to break any promise,  even those concerning war and peace, let alone debt repayment.

And then be prepared to face the consequences for lack of fair play.

Aye, too often "freedom of xxx" is understood as "freedom from the consequences of doing xxx".

Greece can always walk away from the deal. They probably should, in my (really humble) opinion.

[Martinus]

If Greece treasures its sovereignty so much, it should avoid putting itself in a position where it depends on the generosity of others for its survival.  Hong Kong amasses a large cash reserve and keeps our budgets balanced because we don't want to depend on London or Beijing under any circumstances.  We treasure our financial independence and don't want to give our sovereigns the chance to take over.  This of course comes at a cost.  It means we don't have a public pension system at all and some of our old have to go through rubbish to look for food.  Greece took a different path.  It chose to give the pensioners a good life, and much more.  The cost is that when financial crisis happen, it will need help, and the people who provide such help will have say over public policy.

It's really idiotic to compare a city state to a country.

[Monoriu]

It's really idiotic to compare a city state to a country.

I don't think so.  Greece with 11 million people aren't that much larger than us with 7 million people.  Hong Kong has complete financial independence and we don't give or take money from Beijing.  Actually, we now have more say over our finances than they have over theirs.  We use a currency board system where the exchange rate with US dollars is fixed.  So the US Federal Reserve in effect has complete control over our monetary policy.  This is similar to Greece in that we both don't have our own central bank and we have no control over our exchange rates.  We weathered all financial storms in recent decades without the need to ask for help, and there is a reason for that.

[Tamas]

Mono, socialists, especially class-guilt ridden rich socialist like Marty are desperate to prove that Greece is the victim, because any other conclusion proves their world view wrong. Greece is bankrupt because it put short term financial interests of the people above all other considerations. Moreover they had been doing a maxed-out version of "take loans and dump them into circulation. So the economy could flourish" economic model for about 30 years, and it utterly failed, like it did during he same timeframe in the Eastern bloc during the second half of the Cold War. Greece stands as proof of the unsustainability of the views and dreams f the European left, and this is why they really want to spin this story around

[Martinus]

It's really idiotic to compare a city state to a country.

I don't think so.  Greece with 11 million people aren't that much larger than us with 7 million people.  Hong Kong has complete financial independence and we don't give or take money from Beijing.  Actually, we now have more say over our finances than they have over theirs.  We use a currency board system where the exchange rate with US dollars is fixed.  So the US Federal Reserve in effect has complete control over our monetary policy.  This is similar to Greece in that we both don't have our own central bank and we have no control over our exchange rates.  We weathered all financial storms in recent decades without the need to ask for help, and there is a reason for that.

Yes the main reason being that it is a tax haven.

[Monoriu]

Yes the main reason being that it is a tax haven.

If it is that easy, what stops Greece from becoming one to solve all its problems overnight?

HK is a tax haven, true.  But there are a lot of reasons why HK's public finances are so much stronger.  According to this article, Greece spends a whopping 16.2% of its GDP on pensions. 

http://www.greece.com/news/9913/Greece_spends_162_pct_of_GDP_on_pensions.html

The EU report notes that of all 28 member-states, Greece spends the highest proportion of its gross domestic product on pensions, amounting to 16.2 percent.

I have said it before and I will say it again.  Hong Kong does not have a public pension system.  That's 16.2% of GDP saved right there. 

[Iormlund]

It's not really saved unless you off old folks ala Logan's Run. I'm guessing family helps them out.

Personally I prefer pensions (although I'd rather have them be contributory, rather than distributive).

[Syt]

[Monoriu]

It's not really saved unless you off old folks ala Logan's Run. I'm guessing family helps them out.

Personally I prefer pensions (although I'd rather have them be contributory, rather than distributive).

Some folks have families, yes.  But not everybody does.  A lot of people actually *drumroll* save for their retirement when they are young. 

[grumbler]

I think that's on over-simplification.  The South wasn't fighting industrialization - the industrialization of the textile industry is what made cotton king and cemented the power of the plantation oligarchs.  The Southern elite were deeply embedded in the emerging industrial capitalist system.   What can be fairly said is that industrialization brought with it political and demographic ramifications in the North that were discomfiting to the South.

Also would not say that slavery was "just the means" for creating and maintaining power.  It was that but much more.  The institution shaped the entire culture, society and economy.  One of the interesting things that Picketty and his collaborators did is quantify different components of wealth in the US.  During the antebellum period, wealth in the form of bonded slaves was roughly equal to the value of the agricultural land in the US.  Astonishing when you realize that slaves are found only in the South and even them concentrated in certain regions.  So yes - concentrated wealth on that level was a formidable source of power but also an enormous vulnerability.  The planter elite was chained to the slave system and the entire elaborate system of physical and cultural controls required to maintain it.

I liked my wording of this argument better. 

[Razgovory]

Mono, socialists, especially class-guilt ridden rich socialist like Marty are desperate to prove that Greece is the victim, because any other conclusion proves their world view wrong. Greece is bankrupt because it put short term financial interests of the people above all other considerations. Moreover they had been doing a maxed-out version of "take loans and dump them into circulation. So the economy could flourish" economic model for about 30 years, and it utterly failed, like it did during he same timeframe in the Eastern bloc during the second half of the Cold War. Greece stands as proof of the unsustainability of the views and dreams f the European left, and this is why they really want to spin this story around

  Talk about projecting.

[Razgovory]

It's really idiotic to compare a city state to a country.

I don't think so.  Greece with 11 million people aren't that much larger than us with 7 million people.  Hong Kong has complete financial independence and we don't give or take money from Beijing.  Actually, we now have more say over our finances than they have over theirs.  We use a currency board system where the exchange rate with US dollars is fixed.  So the US Federal Reserve in effect has complete control over our monetary policy.  This is similar to Greece in that we both don't have our own central bank and we have no control over our exchange rates.  We weathered all financial storms in recent decades without the need to ask for help, and there is a reason for that.

You still haven't have seemed to grasp that Hong Kong is in a rather different situation then Greece.  Let's use one very simple example:  How many miles of roads do you think Hong Kong needs to maintain?  How many miles of roads do you think Greece has to maintain?