Sovereign debt bubble thread

[Admiral Yi]

Right.  You built a roller coaster without guard rails, seat restraints and brakes, and are shocked, shocked to find that the twerpy kid riding on the back has fallen out.  And while the kid is in mid-air falling, everyone is too busy pointing fingers of blame to catch him.

Jeez Joan, for a guy who harps on human agency as much as you do (and rightly so) you sure are using an odd metaphor to describe Greece's actions.

[Valmy]

Yeah, it's not like country's can ever grow themselves out of problems; they need to consider themselves as a household with one single fixed income and maintain a rigid budget, never going even a cent into debt. 

I would have considered this a joke before...but it looks like my government is systematically unable to responsibly deficit spend or manage debt.  At this point this sounds better than destroying the country through debt and inflation.

[The Minsky Moment]

Jeez Joan, for a guy who harps on human agency as much as you do (and rightly so) you sure are using an odd metaphor to describe Greece's actions.

The agency that I am focused on was the decision to bring Greece into the Euro in 2001, despite everyone knowing they weren't ready.  That decision was made on the understanding that the Greek economy was so small that it wouldn't matter economically and politically it would be a nice thing to do.

[Admiral Yi]

The agency that I am focused on was the decision to bring Greece into the Euro in 2001, despite everyone knowing they weren't ready.

The agency which you completely ignore is the decision to run deficits of 14% of GDP once they were in the Euro.  No one held a gun to their head.

[The Minsky Moment]

The agency which you completely ignore is the decision to run deficits of 14% of GDP once they were in the Euro.  No one held a gun to their head.

No, no one did.
To the contrary, the rest of the continent fell all over themselves to finance their current account deficits and deal in their securities.

[Admiral Yi]

No, no one did.
To the contrary, the rest of the continent fell all over themselves to finance their current account deficits and deal in their securities.

And?

[Zanza]

Yes. Default, print drachmas.

See, it wasn't too hard.   

I just checked and I wrote that two years ago on Paradox already. I can't find similar posts here, but I wonder if they were lost in one of the forum hickups.

[Zanza]

No, that's not what we signed up to. It may be what we should have signed up to, but in the end, the monetary union didn't have policies in place for crisis or to handle imbalances.

Right.  You built a roller coaster without guard rails, seat restraints and brakes, and are shocked, shocked to find that the twerpy kid riding on the back has fallen out.  And while the kid is in mid-air falling, everyone is too busy pointing fingers of blame to catch him.

The twerpy kid shouldn't have gotten in then.

[derspiess]

Sounds like the twerpy kid isn't fit to govern himself.

[DGuller]

In this analogy, the twerpy kid is wearing a suicide vest, and if not caught softly he would blow up the rest of the shitty rollercoaster upon impact.

[crazy canuck]

The twerpy kid knew the risks when he got on the roller coaster but didnt care.  Problem is no one else seems to have considered the risks.

[Zanza]

The problem with the analogy is that the the twerpy kid was infact a fully-grown and self-responsible adult when he got into the roller coaster. Sure, some of his friends called for him to jump in, but he could always have joined the dour, no-fun Swede standing at the sidelines.

[crazy canuck]

In this analogy, the twerpy kid is wearing a suicide vest, and if not caught softly he would blow up the rest of the shitty rollercoaster upon impact.

The issue is whether it might be better to let the ride get demolished and use the space for something better.

[MadImmortalMan]

Just don't go to the amusement park.

[Admiral Yi]

The problem with the analogy is that the the twerpy kid was infact a fully-grown and self-responsible adult when he got into the roller coaster. Sure, some of his friends called for him to jump in, but he could always have joined the dour, no-fun Swede standing at the sidelines.

That obviously, but what i think is worst about the analogy is that there's aboslutely nothing instrinsic about the roller coaster that makes random riders fall out.

Maybe a roller coaster in which each rider is given the power to release their own safety bar.