Dear Greece: Sooner or later, you run out of other people's money...

Since October 2008, until the Syriza party took power, the broad measure of the Greek money supply (M3) contracted at an annual rate of just over 6%. And as night follows day, the economy collapsed, shrinking by over 25% since the crisis of 2008.

Since the Tsipras government took the helm, the monetary contraction in Greece has accelerated. This means that a Greek depression of even greater magnitude is already baked in the cake.

And that's not all. It is going to get worse. The total money supply (M3) can be broken down into its state money and bank money components. State money is the high-powered money (the so-called monetary base) that is produced by central banks. Bank money is produced by commercial banks through deposit creation. Contrary to what most people think, bank money is much more important than state money. In Greece, for example, bank money makes up just over 84% of the total money (M3) supply.

The current Tspiras government is a radical left coalition that opposes austerity; in other words, full steam ahead towards the icebergs.....they thought Brussels would bail the Greeks out and let Greece continue with it's dysfunctional welfare state. It ain't gonna happen.



http://www.huffingtonpost.com/steve-...b_7682928.html

Greece will soon be a zombie economy...........the Greek government's mismanagement had EVERYTHING to do with wealth redistribution. The Greeks thought they could continue with their welfare state and the rest of Europe would pay for it. That bullshit came to a halt. Brussels (seat of the EU) has no stomach to make Portugal pay the pensioners in Greece. Originally Posted by Whirlaway

Wealth redistribution has NOTHING to do with their issue. The entire nation is just fucked up. Here are some examples.

In just the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.” The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses.

Where waste ends and theft begins almost doesn’t matter; the one masks and thus enables the other. It’s simply assumed, for instance, that anyone who is working for the government is meant to be bribed. People who go to public health clinics assume they will need to bribe doctors to actually take care of them. Government ministers who have spent their lives in public service emerge from office able to afford multi-million-dollar mansions and two or three country homes.

This from a story on tax collection problems:

Tax Collector No. 1—early 60s, business suit, tightly wound but not obviously nervous—arrived with a notebook filled with ideas for fixing the Greek tax-collection agency. He just took it for granted that I knew that the only Greeks who paid their taxes were the ones who could not avoid doing so—the salaried employees of corporations, who had their taxes withheld from their paychecks. The vast economy of self-employed workers—everyone from doctors to the guys who ran the kiosks that sold the International Herald Tribune—cheated (one big reason why Greece has the highest percentage of self-employed workers of any European country). “It’s become a cultural trait,” he said. “The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense—like a gentleman not opening a door for a lady.”

The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” I laughed, and he gave me a stare. “I am completely serious.” One reason no one is ever prosecuted—apart from the fact that prosecution would seem arbitrary, as everyone is doing it—is that the Greek courts take up to 15 years to resolve tax cases. “The one who does not want to pay, and who gets caught, just goes to court,” he says. Somewhere between 30 and 40 percent of the activity in the Greek economy that might be subject to the income tax goes officially unrecorded, he says, compared with an average of about 18 percent in the rest of Europe.

Here is more from the article

an Athenian construction company that had built seven giant apartment buildings and sold off nearly 1,000 condominiums in the heart of the city. Its corporate tax bill honestly computed came to 15 million euros, but the company had paid nothing at all. Zero. To evade taxes it had done several things. First, it never declared itself a corporation; second, it employed one of the dozens of companies that do nothing but create fraudulent receipts for expenses never incurred and then, when the tax collector stumbled upon the situation, offered him a bribe. The tax collector blew the whistle and referred the case to his bosses—whereupon he found himself being tailed by a private investigator, and his phones tapped. In the end the case was resolved, with the construction company paying 2,000 euros. “After that I was taken off all tax investigations,” said the tax collector, “because I was good at it.”

The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, “What great people!” They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.

The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars.

I want all of you who think I am wrong about Greece to read this story from 2010, FUCKING 2010 and then try to tell me it is because people are being over taxed in Greece and all the money is going to welfare. All I am asking you is to be an honest person and read this story and give my your thoughts.

http://www.vanityfair.com/news/2010/...social_twitter

Closer to home, Chicago Teachers Pension fund is going to miss a $635 million payment which is due tomorrow (Tuesday)....................


http://chicago.suntimes.com/news/7/7...ntingency-plan

Keep harping about collecting tax money that doesn't exist............it makes you look foolish.

And VF writer Michael Lewis is a liberal hack residing in the left wing state of Berkeley, CA. His writing (and analysis) has no credibility, except in the minds of VF readers.

But he got one thing right = "The Greek state was not just corrupt but also corrupting".....they bought their votes thru generous giveaways to unions. There is no sane reason why Portugal, Spain, Italy and the other EU members should pay for the corruption in Greece.

That's why Socialism always fails, the majority of people will never voluntarily work and give their money, to the capable who will not. It's just human nature. Originally Posted by nwarounder

You think Capitalism will not fail? It is failing right before your very eyes. Part of the reason is below.


http://www.spectacle.org/496/demo.html

Imagine how we respond to the the tragedy of the commons under the rulebooks of democracy and capitalism. We are, you and I and some others, the residents of a village which adjoins a commons where we all graze our sheep. Under the democracy rulebook, we meet as the village council; our concern is how to preserve the commons for our children's children. All right, shift paradigms: we are now under the capitalist rulebook, meeting as the board of directors of the Intercontinental Sheep-Grazing Company. Our discussion, abruptly, is about how to maximize shareholder value, by extracting every last possible dollar from the commons this fiscal period. Our grandchildren are nowhere in the conversation; they are not shareholders. Under the separation of powers implied by the two rulebooks, we are relieved of the necessity of thinking about the future, because it is someone else's job.

Wealth redistribution has NOTHING to do with their issue. The entire nation is just fucked up. Here are some examples.





This from a story on tax collection problems:




Here is more from the article





I want all of you who think I am wrong about Greece to read this story from 2010, FUCKING 2010 and then try to tell me it is because people are being over taxed in Greece and all the money is going to welfare. All I am asking you is to be an honest person and read this story and give my your thoughts.

http://www.vanityfair.com/news/2010/...social_twitter Originally Posted by BigLouie

Sounds like the Clintons and a LOT of other liberals with their lying, cheating and stealing ways would be right in their element and fit right in with the Greeks. How much was Slick Willy's demand for a donation to his reelection fund to sleep in the Lincoln bedroom ?

Wealth redistribution has NOTHING to do with their issue. The entire nation is just fucked up. Here are some examples.

This from a story on tax collection problems:

Here is more from the article

I want all of you who think I am wrong about Greece to read this story from 2010, FUCKING 2010 and then try to tell me it is because people are being over taxed in Greece and all the money is going to welfare. All I am asking you is to be an honest person and read this story and give my your thoughts. Originally Posted by BigLouie

No one is going to agree with you if you keep saying income redistribution has NOTHING to do with it.

The short term fiscal outlook for Greece may worsen or improve on a year-to-year basis with the rise and fall of the global economy, but over the long haul, the fundamentals of their economy are rotten.

They do a lousy job collecting income taxes (and VAT as well?), but the job is made harder by having a very high rate to begin with. And made FAR worse by promising everyone a government job and ridiculous benefits. Ridiculous benefits have bankrupted or will bankrupt Stockton, CA, Illinois, and cities in the US. Did those US cities/states have a collection problem?

If there are a lot of self-employed people (making it harder to collect taxes), that is no doubt due to anti-corporation, anti-free market government policies going back decades. For all their progressive BS in this country, the left loves big companies which can be brought to heel to collect taxes and enforce the social agenda of the left out of fear, if nothing else.

The Greeks just took it too far.

You think Capitalism will not fail? It is failing right before your very eyes. Part of the reason is below.


http://www.spectacle.org/496/demo.html

Imagine how we respond to the the tragedy of the commons under the rulebooks of democracy and capitalism. We are, you and I and some others, the residents of a village which adjoins a commons where we all graze our sheep. Under the democracy rulebook, we meet as the village council; our concern is how to preserve the commons for our children's children. All right, shift paradigms: we are now under the capitalist rulebook, meeting as the board of directors of the Intercontinental Sheep-Grazing Company. Our discussion, abruptly, is about how to maximize shareholder value, by extracting every last possible dollar from the commons this fiscal period. Our grandchildren are nowhere in the conversation; they are not shareholders. Under the separation of powers implied by the two rulebooks, we are relieved of the necessity of thinking about the future, because it is someone else's job. Originally Posted by WTF

You never read Tragedy of the Commons, have you? It's by Garrett Hardin. Get the audio version. There are lots of big words you won't understand.