Turns out I really wasn't exaggerating in my discussion about Krugman and Morgan Warstler yesterday.
http://diaryofarepublicanhater.blogspot.com/2015/07/morgan-warstlers-full-throated-defense.html
http://www.cnbc.com/2015/07/14/imf-greek-debt-relief-a-must-greece-may-take-30-years-to-recover.html
Now we know that the Eurocrat tendency is simply to ignore anything it doesn't agree with. Like the economists don't agree with their aGreekment but then the Eurocrats have decreed that economics is for the birds.
http://diaryofarepublicanhater.blogspot.com/2015/07/trying-to-discuss-economics-with.html
Maybe people like Krugman or Lars Christensen are horrified by what they are seeing but then that is Anglo Saxon economics not German econoimcs. German economics says having almost 30% of your economy seized by creditors and absolutely no debt relief is the key to growth.
However, the IMF has now got involved and what they are saying may be tougher to ignore. They may not be able to support this deal at all as currently constituted and that Greece may need not just debt relief but debt relief for 30 years to recover.
This can't be ignored in the way what Krugman says can be ignored as for one thing Germany has insisted that no deal is possible without IMF permission.
"The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a full moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression."
"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report.
"Greek public debt will spiral to 200pc of GDP over the next two years, compared to 177pc in an earlier report on debt sustainability issued just two weeks ago."
"The findings are explosive. The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief."
"This vastly complicates the rescue deal agreed by eurozone leaders inmarathon talks over the weekend since Germany insists that the bail-out cannot go ahead unless the IMF is involved."
The creditors were aware of the IMF’s report as early as Sunday, yet chose to sweep it under rug. Extracts were leaked to Reuters on Tuesday, forcing the matter into the open
http://www.telegraph.co.uk/finance/economics/11739985/IMF-stuns-Europe-with-call-for-massive-Greek-debt-relief.html
The IMF has obviously often been on the wrong side of things-in the past it had done to small Latin American countries what the Eurocrats are doing to Greece-or for that matter what the Allies did to Germany after WWI.
Hayek said that they loved Keynes in Germany and Austria after his Economic Consequences of the Peace.
http://www.amazon.com/Economic-Consequences-Peace-Maynard-Keynes/dp/1619493764/ref=sr_1_3?ie=UTF8&qid=1436970790&sr=8-3&keywords=keynes+the+economic+consequences+of+the+peace&pebp=1436970803311&perid=1RJPQAHNNNKQYM64SM8F
That's nice, though it's too bad they never actually read the book.
For once, however, they are on the side of angels and the thanks for this goes to one man more than any other-President Obama. Washington is working its will here.
"The backdrop to this sudden shift in position is almost certainly political. It follows an intense push for debt relief over recent days by the US Treasury, the dominant voice on the IMF Board in Washington."
I'll say it again-liberals need to stop preferring Europe to the US. It's true that Western Europe still has a much better social safety net but we are going in the right direction and the euro is simply choking anyone unfortunate enough to be on it.
One area that Thatcher and the Conservatives have been right about is staying off the euro. Britain surely has more than its share of problems-starting with the fact that Scotland wants to leave; after this how Great will Britain be?
However, at least they don't have this problem. As Varoufakis says, the eurosceptics were right all along.
http://yanisvaroufakis.eu/2015/07/14/on-the-euro-summits-statement-on-greece-first-thoughts/
"Back in 1971 Nick Kaldor, the noted Cambridge economist, had warned that forging monetary union before a political union was possible would lead not only to a failed monetary union but also to the deconstruction of the European political project. Later on, in 1999, German-British sociologist Ralf Dahrendorf also warned that economic and monetary union would split rather than unite Europe. All these years I hoped that they were wrong. Now, the powers that be in Brussels, in Berlin and in Frankfurt have conspired to prove them right."
http://diaryofarepublicanhater.blogspot.com/2015/07/morgan-warstlers-full-throated-defense.html
http://www.cnbc.com/2015/07/14/imf-greek-debt-relief-a-must-greece-may-take-30-years-to-recover.html
Now we know that the Eurocrat tendency is simply to ignore anything it doesn't agree with. Like the economists don't agree with their aGreekment but then the Eurocrats have decreed that economics is for the birds.
http://diaryofarepublicanhater.blogspot.com/2015/07/trying-to-discuss-economics-with.html
Maybe people like Krugman or Lars Christensen are horrified by what they are seeing but then that is Anglo Saxon economics not German econoimcs. German economics says having almost 30% of your economy seized by creditors and absolutely no debt relief is the key to growth.
However, the IMF has now got involved and what they are saying may be tougher to ignore. They may not be able to support this deal at all as currently constituted and that Greece may need not just debt relief but debt relief for 30 years to recover.
This can't be ignored in the way what Krugman says can be ignored as for one thing Germany has insisted that no deal is possible without IMF permission.
"The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a full moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression."
"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report.
"Greek public debt will spiral to 200pc of GDP over the next two years, compared to 177pc in an earlier report on debt sustainability issued just two weeks ago."
"The findings are explosive. The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief."
"This vastly complicates the rescue deal agreed by eurozone leaders inmarathon talks over the weekend since Germany insists that the bail-out cannot go ahead unless the IMF is involved."
The creditors were aware of the IMF’s report as early as Sunday, yet chose to sweep it under rug. Extracts were leaked to Reuters on Tuesday, forcing the matter into the open
http://www.telegraph.co.uk/finance/economics/11739985/IMF-stuns-Europe-with-call-for-massive-Greek-debt-relief.html
The IMF has obviously often been on the wrong side of things-in the past it had done to small Latin American countries what the Eurocrats are doing to Greece-or for that matter what the Allies did to Germany after WWI.
Hayek said that they loved Keynes in Germany and Austria after his Economic Consequences of the Peace.
http://www.amazon.com/Economic-Consequences-Peace-Maynard-Keynes/dp/1619493764/ref=sr_1_3?ie=UTF8&qid=1436970790&sr=8-3&keywords=keynes+the+economic+consequences+of+the+peace&pebp=1436970803311&perid=1RJPQAHNNNKQYM64SM8F
That's nice, though it's too bad they never actually read the book.
For once, however, they are on the side of angels and the thanks for this goes to one man more than any other-President Obama. Washington is working its will here.
"The backdrop to this sudden shift in position is almost certainly political. It follows an intense push for debt relief over recent days by the US Treasury, the dominant voice on the IMF Board in Washington."
I'll say it again-liberals need to stop preferring Europe to the US. It's true that Western Europe still has a much better social safety net but we are going in the right direction and the euro is simply choking anyone unfortunate enough to be on it.
One area that Thatcher and the Conservatives have been right about is staying off the euro. Britain surely has more than its share of problems-starting with the fact that Scotland wants to leave; after this how Great will Britain be?
However, at least they don't have this problem. As Varoufakis says, the eurosceptics were right all along.
http://yanisvaroufakis.eu/2015/07/14/on-the-euro-summits-statement-on-greece-first-thoughts/
"Back in 1971 Nick Kaldor, the noted Cambridge economist, had warned that forging monetary union before a political union was possible would lead not only to a failed monetary union but also to the deconstruction of the European political project. Later on, in 1999, German-British sociologist Ralf Dahrendorf also warned that economic and monetary union would split rather than unite Europe. All these years I hoped that they were wrong. Now, the powers that be in Brussels, in Berlin and in Frankfurt have conspired to prove them right."
Quoting Kaldor? No wonder the Eurocrats hate Varoufakis-Kaldor was an Anglo-Saxon economist not a German economist.
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