Sovereign debt bubble thread

[Admiral Yi]

If Greece were to run a surplus of 20% of GDP, surely Germany would accept.

[DGuller]

If Greece were to run a surplus of 20% of GDP, surely Germany would accept.

Yeah, but "Will work" wouldn't accept.

[Admiral Yi]

Yeah, but "Will work" wouldn't accept.

Of course it would.  Greek debt would decrease.  At some point it would be small enough that Greece could re-enter the market and stop relying on concessionary credit.

[DGuller]

Yeah, but "Will work" wouldn't accept.

Of course it would.  Greek debt would decrease.  At some point it would be small enough that Greece could re-enter the market and stop relying on concessionary credit.

I don't know if you're playing dumb, or being genuine.

[Admiral Yi]

Genuine.

The subtext of "will work" of course is if austerity doesn't generate growth quickly, then it's "not working."  Or if austerity makes people really mad then it's 'not working."

[Iormlund]

The subtext of "will work" of course is if austerity doesn't generate growth quickly, then it's "not working."

Quickly?

[Admiral Yi]

Quickly?

At all then. [shrugs]

The purpose of austerity is not to generate growth.

[alfred russel]

If Greece were to run a surplus of 20% of GDP, surely Germany would accept.

Greece has been implementing austerity that is too mild for Germany and doesn't even balance the budget. Tax revenues have plummeted. To actually get a surplus that big on more than just paper, government spending would be cut to the point they would have to consider things such as abandoning a western style school system, abolishing the military, replacing the police with community based watch volunteer efforts, etc.

[alfred russel]

The Venn diagram is hilarious btw. 

[Neil]

Maybe the Greeks should consider abolishing their military.  After all, the only thing that the Greek military is good for is nursing Greek irredentism.

[Ed Anger]

I wonder if Greece paid the shipping for those 400 free M1 tanks they was offered.

UPS IS GONNA BE PISSED.

[Admiral Yi]

Greece has been implementing austerity that is too mild for Germany and doesn't even balance the budget. Tax revenues have plummeted. To actually get a surplus that big on more than just paper, government spending would be cut to the point they would have to consider things such as abandoning a western style school system, abolishing the military, replacing the police with community based watch volunteer efforts, etc.

There are countries with a fraction of Greece's budget which provide those things.  Cut everyone's wages.  Sell off state owned enterprises.  Collect some taxes.

[alfred russel]

Greece has been implementing austerity that is too mild for Germany and doesn't even balance the budget. Tax revenues have plummeted. To actually get a surplus that big on more than just paper, government spending would be cut to the point they would have to consider things such as abandoning a western style school system, abolishing the military, replacing the police with community based watch volunteer efforts, etc.

There are countries with a fraction of Greece's budget which provide those things.  Cut everyone's wages.  Sell off state owned enterprises.  Collect some taxes.

I just did a search to find government spending as a percent of gdp.

http://anepigone.blogspot.com/2008/03/government-spending-as-percentage-of.html

Obviously I can't vouch at all for the accuracy, but until other data comes in, I'm going to go with it.

I think that Greece has tax revenues in the lower 30% of GDP, lets say they get that to 35% (if I am right on the current tax revenue rate, then to get to 35% will require massive tax increases/improvements in collection, as property taxes and income taxes will plummet with the fall in spending).

To get a 20% of GDP surplus, that mean spending needs to get under 15%. Here is the comprehensive list of countries under that threshold:

157. Cambodia 13.3
158. Bangladesh 12.8
159. Turkmenistan 9.6
160. Afghanistan 9.2

[Admiral Yi]

You know Fredo, a 20% surplus wasn't really all that serious a proposal.

[alfred russel]

You know Fredo, a 20% surplus wasn't really all that serious a proposal.

Fuck.