A sleepy village in Greece solves the debt problem

[Dryce]

Talking of fiscal misrepresentation try ‘fractional reserve banking’.

It's actually not such a bad idea in principle.

Sadly like other ideas that might be good in principle it provides a means for some people to play the system to profit in excess and other more ordinary mortals lower down the pyramid to think that they are benefitting when in fact all that occurs is asset inflation and a bubble at their expense.

And of course it makes the government feel rich with all these taxes on corporate banking pumping the treasury. And everybody things the funny money sector is so much more profitable than real business and real industry.

And for all the money supposedly sloshing about the UK our industry, business, infrastructure, and assets seem to be in the hands of foreign investors.

 

[MrPoseidon]

Nice comment and makes perfect sense .

If you think about it logically , yes no body had any money at the end of the transaction ,but everyone involved received goods or services !

On a side note, is anyone aware that in 1954 ,Greece wrote off 50% of Germany's loan to her ? (Just throwing it out there .)

 

[grober]

Business - The debt write-off behind Germany's 'economic miracle' - France 24
This was only 10 years after Nazi Germany had invaded GREECE and killed thousands of its citizens. While in the recent crisis Greece was lent 240 billion + Euros most of the money was used to service existing debts with less than 10% left to stimulate the economy and increase GDP. While it is easy to blame people who get into debt there are always two sides to this equation. The people/banks lending money to high risk projects/organisations in the hope of big interest returns should also shoulder some of the responsability for the situation.

 

[Deleted member 37751]

It is a proven fact throughout history that if you back a country and its people into a tight corner with nowhere to move they will become more and more extreme.

I'd have thought Germany would be more aware than most about this but history can cloud your memory when it's not you on the economic critical list.

 

[WDB124066]

It's the yanks that set this up SPX, it is they that have backed Greece into a corner.

 

[Giantvanman]

Making allowances for the fact that I am not fiscally aware on a grand scale as some people, could someone explain to me why it was acceptable for a goodly proportion of the populace to avoid paying tax because they thought government was corrupt whilst simultaneously enjoying a super-generous welfare/pension system and rather than make any effort, they took the decision to continue borrowing to fund this?

Would this feckless behaviour not be contributory to their current predicament?

 

[WDB124066]

It's a fair call I suspect, but it was the yanks who did a very dodgy deal to let Greece have their books looking great to address EU rules, they stung the Greeks seriously to achieve this. I suspect most of their debt is due to these deals they made with the Americans....

 

[grober]

What The Greek Exit Could Mean For Her Armed Forces | Forces TV

On the tax front one point made recently on the news was that lots of Greece's economy is composed of small scale ,self employed or one man business operations. True to the humorous example quoted at the start of this thread many business transactions would take the form of barter of goods or services. This form of transaction [ which one might add also happens here in the UK to an extent ] is extremely difficult to police for tax if no money changes hands or no paperwork exists of a transaction. One wonders what state our tax base would be in--- if for example VAT revenues disappeared. I suspect our tax system works because most people go along with it--- albeit grudgingly. If your country has never had a a tax paying " tradition" I imagine its very difficult to persaude people to part with money if they didn't have to before.

Greece Struggles to Get Citizens to Pay Their Taxes - WSJ

 

[MD5]

Debt is a construct with time--- its only becomes a problem when people want paid.

If you don't have the means of repaying it.

The merry go round where everyone settles their €100 debt is all well and good, but the scenario misses out the risk/irreponsible element of the hotelier using/taking money which wasn't his in the first place, ie a returnable deposit. All well and good that the hooker repaid him her debt, but if she hadn't, he'd have to find another €100 to refund the deposit, which he clearly didn't have.

 

[grober]

The analogy only works if you only think in isolation within the circle described.
In reality the butcher is down one carcass of pork, the farmer down one pig, the feed man down several bags of feed and fuel, the publican down some bottles of Ouzo, the prostitute down services rendered, the hotelier the rent for his rooms. The " debt" remains despite money changing hands. Take just one example---- How does the publican pay his Ouzo supplier for the bottles the farmer consumed on his tab?

 

[MD5]

The analogy only works if you only think in isolation within the circle described.
In reality the butcher is down one carcass of pork, the farmer down one pig, the feed man down several bags of feed and fuel, the publican down some bottles of Ouzo, the prostitute down services rendered, the hotelier the rent for his rooms. The " debt" remains despite money changing hands. Take just one example---- How does the publican pay his Ouzo supplier for the bottles the farmer consumed on his tab?

I'm more concerned about the prostitute. Apparently she was more recently seen in the police station, complaining that she hadn't realised she'd been raped until the cheque bounced!