[atemerev]

I am an ultra-free-market Objectivist. Still, I think that the Greeks voted correctly.

The problem is: even in a democratic country, you are not accountable to where and how much your government's borrowing. Governments do not produce money; they take it from taxes. Which means: _they_ are borrowing money, and _you_ have to repay it.

While being responsible for debts is a good thing, it only concerns your own debts, not something that was made on your behalf. It's the businesses who will suffer the most (as they are taxable), and they are innocent.

[anigbrowl]

In a democratic republic (and since the Greeks originated this concept, I think we can allow that they understand it) voters are responsible for the actions of the government they elect. To say people aren't accountable at all for government borrowing is silly; ultimately it's the electorate's responsibility to ask candidates and political parties how they intend to pay for their programs. Of course, it's very hard for voters to understand a whole economy and assess whether a party's proposals are good or bad, or to assess whether a party or politician is likely to be able to deliver on intentions, no matter how sensible, or to fall back on other measures. I'm pretty sure that when Syriza was elected their collective hope was not just to be in conflict with other EU countries but to get the Greek economy growing again so as to increase revenue and reduce the ratio of debt:productivity, but of course what you hope to achieve and what you can actually get done are often two different things.

I also think the referendum vote was the correct one because other countries, politicians, and populations in Europe have been deluding themselves about this situation to almost as great a degree as the Greeks were, and it's plain that the existing strategy has just resulted in the Greek economy shrinking more and more and the external debt becoming impossible to pay.

But this notion that the population of a democratic country is in no wise accountable for the actions of its government is just facile. It's like trying to get out of your chores by saying 'I didn't ask to be born!' Well it's true you didn't, but you still have to clean up your room before dinner.

[BerislavLopac]

> In a democratic republic (and since the Greeks originated this concept, I think we can allow that they understand it)

This point keeps being repeated, but even if we allowed that historical political achievement could direct the actual national mentality, please consider that since the times of ancient democracy Greece has mostly seen governments which are still remembered as the epitomes of dictatorship and politicking -- from Byzantium, through Ottoman Empire, all the way to the post-WWII military regime. Today's common mentality in most of the Balkans, including Greece, is very far from the ideals of the Athenian democracy (which was itself not really very democratic, leaving out the large majority of people such as women, slaves etc).

[anigbrowl]

I completely agree, but I think that political agency also involves an acceptance of responsibility. To suggest that populations are helpless against governments that promptly borrow them into penury is as much magical thinking as the idea that you can just cut your way to prosperity. In reality you don't usually see people running out into the street to protest additional government borrowing. (Please note that I think the Greek crisis is a lot more complex than a few numbers on a national balance sheet, but I don't see any point in trying to re-summarize it in every single comment.)

[marcosdumay]

As far as I'm counting, Syriza was the third government of Greece elected on the promise of no further borrowing. One other party changed his worldview as soon as elected, the other changed only after several closed-door negotiations with Troyka (that let people talking of everything, from bribery to death threats, so, no idea about what really happened).

Holding the people of Greece accountable for the action of those governments based on the fact that the country is a "democracy" is a complete delusion.

By the way, we should use the same rationale for other countries, and should hold the guilty accountable of their actions more often, instead of the innocent.

[anigbrowl]

Reread the second sentence in my post above. An electorate's responsibility does not end with the selection of the rosiest-sounding promises.

[marcosdumay]

To be fair, a default is not a rosy scenario by any means. It's the Troika that is trying to extend and pretend here.

The fact that Greek representatives acted in a manner that's the complete opposition of what they claimed they'd do once elected means that the country isn't that democratic. Thus, you can't implicate the people for voting on them.

Whatever scenario those politicians sold (and I have no idea what they are) are not relevant. They promised specific actions, and they broke that promise.

[tomp]

> In a democratic republic (and since the Greeks originated this concept, I think we can allow that they understand it) voters are responsible for the actions of the government they elect.

Don't be ridiculous. Sure, "democracy" is better than dictatorship, but choice between two (or three) bad options every 4 years isn't actual choice, and you can't hold the voters responsible for every mistake the governments commit after they're elected.

I'm not sure where you're from, but I'm sure that your government made plenty of mistakes that you don't want to be responsible for. US - destroyed Iraq. UK - helped establish ISIS. Slovenia - unconstitutionally ignored gay rights for a number of years. Off the top of my head.

[anigbrowl]

I'm from Ireland but live in the US. Of course there are things I am not happy with the government about at any given time, and technically I'm not responsible for what government does in the US since I can't vote in US elections, but insofar as I support the US by living here, paying taxes, and so on, I do feel a little bit responsible even for things I disagree with. Of course individual voters have very little power and it's very difficult to actively lobby government without getting into the 'political-industrial complex'.

But in the aggregate, having political agency means you have to live with the ramifications of the electoral decisions you make in the normal course of things.

[venomsnake]

Governments actually produce money from thin air. The "always must have debt money" is a fallacy.

[MCRed]

You cannot produce value from thin air. When they produce that money, it is a form of taxation because it decreases the value of the previously produced money. Monetary inflation devalues the currency.

[dragonwriter]

> You cannot produce value from thin air.

Even if true (which, its not, value is created "from thin air" all the time; otherwise, wealth would be zero-sum, and per capita wealth always declining with increasing population), this is irrelevant to the upthread claim which was that governments do not create money. Which is quite obviously false.

[thesimpsons1022]

what happens if you double the money supply but economic productivity also doubles? The money is worth exactly the same as before.

[calibraxis]

Things we’re not supposed to notice:

- Governments literally stamp their names and politician's faces on money. You're supposed to obtain it and give some back to the government.

- There’s a distinction between government and economy, though government enforces capitalism (social relations of "property", police, etc), and attacks other nations which try alternatives.

- The money supply is basically bureaucracy-points made on computers.

"In God We Trust" is an apt description of how we're not supposed to question simple things. With the moralistic notion of "debt", we religiously consign children to awful fates.

[atemerev]

Money is just a reflection of production (i.e. scarcity of production). Due to market forces inertia, monetary supply can be manipulated, but you can't just start printing money left and right without causing inflation; there is a hard science of doing it without disturbing market balance.

[dragonwriter]

> Money is just a reflection of production

No, its not.

The value ascribed to money is, of course, related to what it can be used for and how much of it is floating around, and production in the area where the particular form of money is the preferred medium of exchange is one of the factors that is relevant to that. And, perhaps the statement about governments not creating money meant that governments don't create value. Which would still be wrong, but in different ways.

[acqq]

Which honest economist could have told you that there is "a hard science"?

And by the way, western countries mostly don't "print" money to create it, the money creation "invisibly" happens in the financial sector.

[atemerev]

I do work in the financial sector and somewhat aware of it.

[pan69]

>> Governments do not produce money; they take it from taxes.

Exactly. Where does Greece thinks the bail out money they received came from? That's right, the tax payers in the other EU countries.

Greece saying NO is not Greece giving the finger to Europe, it's Greece giving the finger to the people of Europe.

[dragonwriter]

> Greece saying NO is not Greece giving the finger to Europe, it's Greece giving the finger to the people of Europe.

Its not giving the finger to anyone. The Greek government was offered terms, which it could accept or reject (neither of which constitutes "giving the finger" to anyone, choosing to accept or reject an offer is just a routine part of negotiating.) The government gave this choice to the voters with a recommendation, rather than acting unilaterally on it. The voters made a choice to reject the terms, which was the recommendation given by the government.

[dguaraglia]

Greece is giving the finger to the EU in the same way Argentina gave the finger to the IMF: it wasn't the people that "chose" to bail out the banks, it was the government at the time. Why should every Greek person today be held accountable for what a very small subset of them did back then?

I really dislike people saying "the Greek are doing this or that". Taken to an extreme, that is that kind of generalization and simplification that leads to xenophobia.

[atemerev]

The bailout was also wrong, of course. But the damage was done long time ago, and it is irrecoverable in any moral way. It's impossible to make Greek politicians and government workers sell back their possessions and privileges.

[moogly]

Please. The EU != Europe

I'm a citizen of a European country (Sweden), but I don't feel that I was given the finger at all. I would've voted the same if I were in their shoes.

[zbyte64]

So the money that the Banks lent to Greece and collect interest on is actually EU tax money?

[dragonwriter]

> Governments do not produce money

Except that, exactly and literally, they do precisely that (though some, through law, outsource that function to an outside entity or combine together with other governments to do, or outsource, that production jointly.)

[zzleeper]

True, but on the Greek case a lot of that money was used in transfers to voters to prop up their income (pensions, early retirement, unemployment benefits, etc.)

In a way, most of the austerity discussion is a red herring. The key problem is not whether to raise sales tax by 1% or not. The real reforms are raising the retirement age, liberalizing labor markets, fixing their IRS, etc.

If you condone debt without reforms then Greece will be back to panhandling five years from now. Since I really doubt they will be able to pull of the reforms (after 20 years of not doing so), the only sane option seems an orderly default + Grexit. Sure, you'll likely have 6 months of crisis and a loss of confidence in the EU, but it's not going to be the end of the World...

[anigbrowl]

I totally agree with you, but I think the rest of Europe is looking for a quick fix that doesn't exist. The problem has accumulated over generations and we should be taking an approach that is designed to work out over a similar timescale, like the restructuring of German war debt in 1953 (in contrast to the self-defeating hard-line approach on WW1 reparations following the Treaty of Versailles).

only sane option seems an orderly default + Grexit. Sure, you'll likely have 6 months of crisis and a loss of confidence in the EU, but it's not going to be the end of the World...

I honestly think it would be the end of the European project within 1-2 decades. I am no Eurosceptic - on the contrary I've always felt very proud to be an EU citizen and been a supporter of full-on political political union and a fully federal Europe. If you'll forgive me quoting myself from another thread, I think a Grexit is like trying to deal with the pain of a hangover by amputating one's own head. Greece is the cradle of western civilization - philosophically, linguistically an in many other respects.

The political payload of a Grexit would be a tacit admission that capitalist/mercantilist considerations trump those of citizenship or political identity. I agree completely that we can't solve the problem by just writing off debt, as we'd be back in the same place in a few years. But nor can we solve it by opting for Grexit + drachma + devaluation, ie throwing up our hands at the fiscal problem and switching to monetarist tricks instead.

The EU has to stand for something deeper than a set of accounting principles, or it can't stand at all.