William K. Black: Greece Is Tearing Europe Apart Politically, Socially and Economically

5 Responses to William K. Black: Greece Is Tearing Europe Apart Politically, Socially and Economically

  1. Pingback: William K. Black: Greece Is Tearing Europe Apart Politically, Socially and Economically | The Wall Street Examiner

  2. What Professor Black’s headline really should have been: The Euro Is Tearing Europe Apart Politically, Socially and Economically

    If ever there has been a worse financial idea than the euro, I have yet to see it.

    Rodger Malcolm Mitchell

  3. The problem with governments spending more and more money to get out of this problem is that governments never pull back when times are good. Thus the debt climbs in bad times and debt climbs in good times. There is no trust that this time is any different. The government saying “oh this time we learned our lesson, just give us a few billion (trillion) and we promise that when the economy improves we will get out house in order.” BS. there is no credible evidence that when times improve they will indeed get their house in order. Thus bond yields keep going up for countries in trouble. We have 500 years of history showing that when countries get this far in debt, there is only one answer, default and devaluation.

    • Rodger: Took the words out of my mouth.

      Paul: just give us a few billion (trillion) The government does not & can not ask the private sector for money. The government prints the money, prints the bonds. The private sector gets money from the government, not vice versa.

      and we promise that when the economy improves we will get out house in order.” The “getting our house in order” is the problem. Bond yields go up for countries in trouble like those in the Eurozone, because they created the worst monetary system of all time. In a normal country, the government decides what the bond yields are (or decides not to decide) – in exactly the same way it decides 5 Washingtons = 1 Lincoln.

      The problem with governments spending more and more money to get out of this problem is that governments never pull back when times are good. The exact reverse is the problem. Governments tend to underspend. They always pull back far too soon. This keeps unemployment high & growth low & tax receipts low too. So there is the paradoxical effect that austerity, “getting your house in order” leads to big deficits, while “spending more and more money” leads to small ones.

      We have 500 years of history showing that when countries get this far in debt, there is only one answer, default and devaluation. No, we don’t. We have lots of people saying this thing, saying there is such history, when history doesn’t show this at all. But such people, most of academia, the MSM don’t have a problem with that. They just make things up.

  4. Paul, there is an enormous difference between monetarily non-sovereign governments (the euro nations, U.S. states, counties and cities) and Monetarily Sovereign governments (the U.S., Canada, Australia, China eta al) regarding the need to “pull back.” For Monetarily Sovereign governments, debt never is a burden, but simply the way these governments provide money to their economics. By contrast, monetarily non-sovereign governments are limited in debt repayment, and debt is indeed, a burden to them.

    If you would like to see a quick, easy explanation of the differences between Monetary Sovereignty and monetary non-sovereignty, go to: http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

    Anyone who doesn’t understand Monetary Sovereignty, doesn’t understand economics.

    Rodger Malcolm Mitchell