Monday, February 6, 2012

Bread or Profit?

Bread or profit?  That becomes the real question when government austerity reaches the levels being demanded in Greece.

Paul Krugman's piece, below, raises the question of just who is it who owns all this foreign debt?  And why is repayment so sacrosanct that innocent citizens must suffer?  For whom are they suffering?  Is there no way to renegotiate the terms, forgive some of this debt and hold accountable those who made these bad loans in the first place?  

Perhaps everything that can be done has already been tried, all of this detail is out in the open and I just haven't read about it, I don't know.  Still, I can't help but wonder if the ultimate financial beneficiaries of these foreign loans include some of the same ultra-wealthy families that aren't paying their fair share of taxes here and abroad. 

 "Corporations are people" as Gov. Romney has reminded us, and banks are corporations.  So behind these corporate banks are the people who pull the strings.  Who are these bank owners with the power to make so many innocent people suffer, and how have the politicians who committed Greece to these shaky loans faired in all of this? 

Paul Krugman - The Conscience of a Liberal
New York Times
February 6, 2012, 8:51 AM
The Greek Vise

How much is the troika demanding from Greece? How tight is the squeeze? Here’s a look based on the most recent IMF report (pdf).

The current plan calls for Greece to move into large primary surplus — that is, surplus not counting interest payments on the debt:
That’s a huge swing — and it’s supposed to happen in the face of a deeply depressed economy. Here’s what it implies for real government spending:

Can I say that this looks basically inconceivable?

And here’s the thing: when this started, Greece was running a large primary deficit — which meant that even if it repudiated all its debt, it would still have been forced to make a major fiscal contraction. This is no longer true. So we’re now looking at a scenario in which Greece is forced into killing levels of austerity to pay its foreign creditors, with no real light at the end of the tunnel.

This is just not going to work.Original Site

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