gobaseline
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Greece. What's to be learned from this tragedy?
(This post was last modified: 07-06-2015 07:32 AM by gobaseline.)
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| 07-06-2015 07:28 AM |
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BroncoPhilly
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RE: Greece. What's to be learned from this tragedy?
This one cuts deep, because I am Greek ethnicity. But, the problems you see in Greece exist in the USA as well. We've gotten around paying the piper because we can inflate our way out of debt obligations to a certain extent, the Greeks can't do that with the EURO.
Greece never should have been allowed in the Eurozone in the first place, they were unqualified. The Greek Drachma was in a condition of almost continual and chronic inflation for decades, that alone demonstrated they were unprepared to assume a strong, stable currency like the EURO. But I-and many others-hoped that once Greece got into the EZ, they would forced to reform their bad practices and bring their institutions up to EZ standard. That never happened.
The ultimate problem in Greece is populist politicians. You get elected in Greece by promising more than the opposition. Of course that's true everywhere, but in Greece when they make promises to spend the REALLY mean it. Successive Greek governments took advantage of low interest rates in the European Central Bank to borrow money like crazy and spend it-not on good infrastructure projects that would increase productivity and provide an economic payback-but too often on social programs. They also hired the family members of political supporters into the Civil Service, where the were guaranteed jobs for life.
Like I said, we're not that much better than the Greeks when it comes to problems. Our advantage is we have our own currency, so we can coverup our excesses. They have no ability to manipulate the EURO and do the same, hence this disaster.
But even with everything that went wrong, Greece went through 5 years of a reform program and had just completed their first two quarters with a primary surplus. It looked like they'd finally turned the corner. But Greeks have a history of changing direction completely, just when they are on the verge of success. They've done it many times in their history. In January, they elected a government of Marxist/Leninists. In 5 MONTHS they destroyed everything Greece had accomplished in 5 years. Utterly, utterly appalling.
(This post was last modified: 07-06-2015 08:04 PM by BroncoPhilly.)
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| 07-06-2015 08:00 PM |
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Greece. What's to be learned from this tragedy?
