There are many analogies that could be used to partially describe the Greek/EU situation, but plainly the most apt analogy is the idea of an unsecured loan, made by a very large institution to a weak individual borrower, who had no money when the loan was made and who, to no one's surprise, still has no money. Clearly, both sides have something at stake, and the question of who has the most to lose, in the immediate financial sense, becomes somewhat unimportant. Greece simply does not have the money to pay the amount due, or the amount demanded, and the EU is not going to go broke if Greece does not pay. That is one reality.
But there is another, bigger picture reality, which is that the EU was meant to provide stability and improve the economic situation for poorer countries like Greece, to be inclusive and to be a lasting solution, as one part of, and to help create, a new and inclusive "European" State Union.
Now it is not looking like the EU is about that at all: Instead there is a suspicion, a real concern, that the loan made to Greece was used to make it possible for Greeks to buy Euro goods, meaning German goods, and not made with any real intent of somehow improving the economic situation for the Greeks. After all, Greece was an economic basket case when the loan was made, before the current government was in charge. So now it looks more like the Euro loan was more of a trap than anything else: Exactly who made any credit analysis regarding the original loan? How was it believed that it was ever going to be possible for Greece to repay the loan? Who benefitted from the loan?
Alternatively, as the Greeks see this, maybe the EU was intended to make all people in the EU "Countries" work and act like Germans? To get them all to work harder, and more, for their own good?
Of course these appear to be, at this moment, somewhat idle questions and concerns, because the personal and soap opera drama of the left wing government trying to deal with this mess is so entertaining. But the political slant of the Greek government is of no real consequence: Greece has no money, no matter who might be in charge.
This was a "loan" that should never have been made, a loan in name only, and the current situation is almost entirely the fault of the EU and IMF, etc. because the EU approved and made the loan. Yes, we could try to blame the former Greek government equally with the EU, but why blame the Greek government for taking a "loan" when they had no money?
At present, the way I see this, Greece would be better off reverting to its own currency, and telling the EU to buzz off. But then, that seems to be the inevitable result of how this must play out.
Aside from the practical implications of "owing" large amounts of money, we have to keep in mind two very significant things: First, that mainly we are not talking about an individual or a household, but rather governments, sovereign states; and Second; the entire issue is being raised by someone who seems to have a stake in the matter (which perhaps both raises his level of expertise and his temptation to slant the issue).
There is no doubt that debt is different from "equity" and that due and unpaid debt can have some disastrous consequences. But this current debt is mainly not so simple. And indeed, at some point an unpaid creditor is in just as bad a situation as the defaulting borrower, and both have to good reasons resolve the debt in a good way. So at some level the distinction of debt and equity and virtue and fault is not so clear.
It seems to me that this piece is just trite drivel. Governments are necessary, and one of the more necessary evils. Particularly when compared to some imagined and blissful state of grace, which generally refers to some Ayn Rand type of anarchy, mainly for the benefit of a few self-imagined Lords. Or oligarchs. Only a delusional Marxist would continue to believe in these modern times that Governments are going to wither away if they are somehow denied taxes. Of course, Somalia, among other places, is a good example of a "State" without an effective government, or one which has withered. Yes, taxes may not be organized there, and it does look a lot more like theft.
Is the idea of a "world" government a good idea, held in high regard by all mankind? Generally no. Different governments come with the idea of different experiments in terms of governance. As I recall, about two hundred years ago a certain group put forth the idea of no taxation without representation, which seems about as good as humanity can do.
Of course, the self-promotional kind of nonsense in the article is a good way to get clients for wealth preservation schemes, but otherwise it is a waste of bandwidth. Taxes as theft? Inefficient and ineffective governments? Politicians as thieves? Are these novel ideas?
Yes, it appears that NC is now doing better than it was before. You point to various changes that were made as having caused the improvement. You might be right. Or you might be wrong. You take the later improvement to mean that the changes that were made were as proof that the changes were all for the good. You don't know that to be true.
It would seem obvious that paying people not to work is not a good idea, in most circumstances, as it is not obviously productive. (On the other hand, in the case of some family businesses, it is sometimes best to pay a family member to stay away rather than come to the office...)
The "Reforms" noted may have worked, and the "Tax Cuts" may have worked, but the reality is that you don't have any idea which, if any, of the reforms were effective and "caused" the improvement, and likewise you have no idea whether the "tax cuts" "caused" the improvement. The number of words you used in your reply cannot mask that lack of causation and your inability to describe any mechanism that would explain the pleasing result. For all you know the claimed improvements were simply the natural course of events or were caused by the personal decisions of certain business owners to take advantage of a relatively cheap work-force in the state.
Meanwhile, the idea that all States are different is faIr enough, and so is the idea that good schools and universities (and I would add infrastructure) are required for a prosperous State. That all sounds very nice, but someone has to pay for all that, and that money has to be collected by the State as taxes, whether in one form or another. Similarly, although things seem better in NC now, how is the outlook for the future?
Worse still, competition between States in tax cutting to attract businesses amounts to a race to the bottom, and it is not a viable long term strategy for all states. Businesses may relocate to the State with the lowest taxes, beggaring all other states, but it is a short term solution.
It is odd that you criticize California and New York in your post. Those are two of the most "successful" States in the country, in terms of businesses, and high profit and high growth businesses as well. California, the state where I do most of my business, has a superb university system, and its main problems are caused by growth, not some sad stagnation as is hinted at in the original post on North Carolina.
Surely this should be put in the humor section, as the writer apparently cannot distinguish correlation from causation. Has the writer eliminated, or made any effort to determine, other possible causes for this remarkable turnaround in North Carolina? What might be the mechanism for this happy result? Getting those lazy bums off welfare? Is that what did it? Or was it that the lower tax rate on the upper class got them to increase their own pay and then hire more gardeners and domestic workers? Or id it motivate them to relocate their business to North Carolina? Who knows? Does it matter? Can all the States similarly benefit from a race to the bottom?
Obviously correlation and causation are related, but not always in clear ways.
Meanwhile, because this is simply correlation, it is of little use in Illinois, another failed State.
Or is the happy result just some short term increase in a measurable category, to be followed by a disastrous result later on? I always liken such half-baked analysis the happy short term result of firing your most expensive salesman and then not paying him his commission... It looks like a great decision, short term. Not so great, long term.
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Greece Blows Up Negotiations – Bank Run Has Started – Some Banks Won’t Be Able To Open On Monday
There are many analogies that could be used to partially describe the Greek/EU situation, but plainly the most apt analogy is the idea of an unsecured loan, made by a very large institution to a weak individual borrower, who had no money when the loan was made and who, to no one's surprise, still has no money. Clearly, both sides have something at stake, and the question of who has the most to lose, in the immediate financial sense, becomes somewhat unimportant. Greece simply does not have the money to pay the amount due, or the amount demanded, and the EU is not going to go broke if Greece does not pay. That is one reality.
But there is another, bigger picture reality, which is that the EU was meant to provide stability and improve the economic situation for poorer countries like Greece, to be inclusive and to be a lasting solution, as one part of, and to help create, a new and inclusive "European" State Union.
Now it is not looking like the EU is about that at all: Instead there is a suspicion, a real concern, that the loan made to Greece was used to make it possible for Greeks to buy Euro goods, meaning German goods, and not made with any real intent of somehow improving the economic situation for the Greeks. After all, Greece was an economic basket case when the loan was made, before the current government was in charge. So now it looks more like the Euro loan was more of a trap than anything else: Exactly who made any credit analysis regarding the original loan? How was it believed that it was ever going to be possible for Greece to repay the loan? Who benefitted from the loan?
Alternatively, as the Greeks see this, maybe the EU was intended to make all people in the EU "Countries" work and act like Germans? To get them all to work harder, and more, for their own good?
Of course these appear to be, at this moment, somewhat idle questions and concerns, because the personal and soap opera drama of the left wing government trying to deal with this mess is so entertaining. But the political slant of the Greek government is of no real consequence: Greece has no money, no matter who might be in charge.
This was a "loan" that should never have been made, a loan in name only, and the current situation is almost entirely the fault of the EU and IMF, etc. because the EU approved and made the loan. Yes, we could try to blame the former Greek government equally with the EU, but why blame the Greek government for taking a "loan" when they had no money?
At present, the way I see this, Greece would be better off reverting to its own currency, and telling the EU to buzz off. But then, that seems to be the inevitable result of how this must play out.
It Is Mathematically Impossible To Pay Off All Of Our Debt
Aside from the practical implications of "owing" large amounts of money, we have to keep in mind two very significant things: First, that mainly we are not talking about an individual or a household, but rather governments, sovereign states; and Second; the entire issue is being raised by someone who seems to have a stake in the matter (which perhaps both raises his level of expertise and his temptation to slant the issue).
There is no doubt that debt is different from "equity" and that due and unpaid debt can have some disastrous consequences. But this current debt is mainly not so simple. And indeed, at some point an unpaid creditor is in just as bad a situation as the defaulting borrower, and both have to good reasons resolve the debt in a good way. So at some level the distinction of debt and equity and virtue and fault is not so clear.
Richard
The Economic Alamo
It seems to me that this piece is just trite drivel. Governments are necessary, and one of the more necessary evils. Particularly when compared to some imagined and blissful state of grace, which generally refers to some Ayn Rand type of anarchy, mainly for the benefit of a few self-imagined Lords. Or oligarchs. Only a delusional Marxist would continue to believe in these modern times that Governments are going to wither away if they are somehow denied taxes. Of course, Somalia, among other places, is a good example of a "State" without an effective government, or one which has withered. Yes, taxes may not be organized there, and it does look a lot more like theft.
Is the idea of a "world" government a good idea, held in high regard by all mankind? Generally no. Different governments come with the idea of different experiments in terms of governance. As I recall, about two hundred years ago a certain group put forth the idea of no taxation without representation, which seems about as good as humanity can do.
Of course, the self-promotional kind of nonsense in the article is a good way to get clients for wealth preservation schemes, but otherwise it is a waste of bandwidth. Taxes as theft? Inefficient and ineffective governments? Politicians as thieves? Are these novel ideas?
Lessons From Carolina: Paying People To Not Work Is Losing Policy, Tax Cuts And Reforms Do Work
Mr. McGee
Yes, it appears that NC is now doing better than it was before. You point to various changes that were made as having caused the improvement. You might be right. Or you might be wrong. You take the later improvement to mean that the changes that were made were as proof that the changes were all for the good. You don't know that to be true.
It would seem obvious that paying people not to work is not a good idea, in most circumstances, as it is not obviously productive. (On the other hand, in the case of some family businesses, it is sometimes best to pay a family member to stay away rather than come to the office...)
The "Reforms" noted may have worked, and the "Tax Cuts" may have worked, but the reality is that you don't have any idea which, if any, of the reforms were effective and "caused" the improvement, and likewise you have no idea whether the "tax cuts" "caused" the improvement. The number of words you used in your reply cannot mask that lack of causation and your inability to describe any mechanism that would explain the pleasing result. For all you know the claimed improvements were simply the natural course of events or were caused by the personal decisions of certain business owners to take advantage of a relatively cheap work-force in the state.
Meanwhile, the idea that all States are different is faIr enough, and so is the idea that good schools and universities (and I would add infrastructure) are required for a prosperous State. That all sounds very nice, but someone has to pay for all that, and that money has to be collected by the State as taxes, whether in one form or another. Similarly, although things seem better in NC now, how is the outlook for the future?
Worse still, competition between States in tax cutting to attract businesses amounts to a race to the bottom, and it is not a viable long term strategy for all states. Businesses may relocate to the State with the lowest taxes, beggaring all other states, but it is a short term solution.
It is odd that you criticize California and New York in your post. Those are two of the most "successful" States in the country, in terms of businesses, and high profit and high growth businesses as well. California, the state where I do most of my business, has a superb university system, and its main problems are caused by growth, not some sad stagnation as is hinted at in the original post on North Carolina.
Richard
Lessons From Carolina: Paying People To Not Work Is Losing Policy, Tax Cuts And Reforms Do Work
Surely this should be put in the humor section, as the writer apparently cannot distinguish correlation from causation. Has the writer eliminated, or made any effort to determine, other possible causes for this remarkable turnaround in North Carolina? What might be the mechanism for this happy result? Getting those lazy bums off welfare? Is that what did it? Or was it that the lower tax rate on the upper class got them to increase their own pay and then hire more gardeners and domestic workers? Or id it motivate them to relocate their business to North Carolina? Who knows? Does it matter? Can all the States similarly benefit from a race to the bottom?
Obviously correlation and causation are related, but not always in clear ways.
Meanwhile, because this is simply correlation, it is of little use in Illinois, another failed State.
Or is the happy result just some short term increase in a measurable category, to be followed by a disastrous result later on? I always liken such half-baked analysis the happy short term result of firing your most expensive salesman and then not paying him his commission... It looks like a great decision, short term. Not so great, long term.
Richard