Greek banks closed, capital controls in place.

gturner has a point.

Members of the U.S. military are disproportionately from so called "red states". Something rabid liberals never seem to credit them for.

Yeah, but he said that all of that money was going to military spending.

On the other hand, and unless I'm reading Anc's article wrong, it looks like over half of that 2.6 trillion went to Virginia alone.
Why in the world would Virginia need all that money?

I would suggest you read his article wrong as there is no way Virginia got 1.3 TRILLION dollars.

Link.

I don't see why that's so unbelieveable. Both the Pentagon and the world's largest Navy base are there.

Virginia received $590 billion in federal spending above contribution in taxes. It spells it out in the first paragraph. As for the claim that it is all military spending, that's actually not true. The transfer payments include that, but also significant portions are found in farm subsidies, pork, and social welfare programs.

http://www.slate.com/blogs/the_reck..._guess_who_benefits_more_from_your_taxes.html

[edit]And to save people from math in the Red Room, $590 billion is less than half of $1.3 trillion.[/list]

The Greeks seem like they might be in the process of surrendering to the EU demands, although the latter want the referendum to go ahead in the hope that it causes Tsipras to resign.

Worst of all worlds, as I said yesterday.

The transfers are spending minus contributions. So you subtract the 850b in contributions from the 1.3t and you get a 590b wealth transfer.

I would also point out that there are plenty of military bases in blue states as well. Just off the top you got Ft. Drum, Scholfield Barracks, Ft. Lewis, all the Cali bases. If you're going to subtract out the military spending in red states you gotta do it for blue states.

Or you could just recognize that federal dollars are federal dollars (does building an office building for a military base generate less jobs than building a civilian one?).

Yeah, Gul corrected me on that. Still, that seems like a pretty big slice going to VA.

I didn't say all of the federal spending was going to the military. That was gturner. However it would be interesting to see the numbers where military spending was broken out.

Virginia gets a huge amount because it is, in many ways, the seat of the Federal government.

http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-201010

That is an oldie but goodie which really exposes the rot in the Greek system and why Rick is so completely wrong about everything.

It is long but, seriously, read it. You will be much better informed as to way Greece finds itself where it is.

Which part of it refutes anything I've said?

Pop quiz: Whose average working week is longer? A German or a Greeks?

Greece!

I had to look it up.

Well, sure. It's the only way many of them would leave their shithole states.

Ask Anc.

Und who are YOU to kvestion zee German working arrangements?

I don't think it's merely about them blindly following the troika.

For starters, Greece has implemented very few of the actual liberalisation policies they've been asked to do - precisely the kind of thing that would drive inward investment.

The EU has also been remiss, so long as the bailout money has been heading back to their banks, and, in Germany's case, their industry, they've kept very quiet about the Greeks being entirely half-hearted about the whole thing.

So yeah, the EU said "do this austerity" and "do this stuff to help growth." If Greece has only been arsed about implementing the former, then really, they share the blame.

Secondly, Tsipras has been an idiot in his dealings - there are ways and means with the EU, and turning up having tantrums isn't how you change it. Syriza's behaviour these last 5 months beggars belief, and more could've been achieved via honey than piss and vinegar.

They have acted like children, to the point the Germans would now rather see them gone. 5 months ago that wasn't the case. Syriza's constant mismanagement of dealings, two-faced attitudes and general Fuck Da Man attitude has achieved very little. What concessions they got were mainly from the EU trying to keep them in rather than deft dealings.

The Greeks are right to want debt forgiveness, but you don't charm your bank manager by taking a shit on his desk.

Even now Tsipras is playing both sides, telling Greeks to say NO! whilst sending papers stating they'll accede for a few crumbs.

It's not going to impress anyone and is going to cost the Greek people.

I surrender. The Tsipras gang defies all logic and negotiation tactics. I officially admit that I have no bloody idea where this might be headed and if there's a plan or if they are panicking along as valuable time goes by. In short, amateurs with ideology, maybe even good will but not one leg in the realities of governing.

Meanwhile the NYT tries to be smarter than everybody else and invokes Thucydides (a Greek philosopher and general). Funny thing... the great shiny Greek temple is not in Greece at all. It's the Austrian parliament building

Pop quiz: Who's more productive during their working hours?

Don't get me wrong. I love the laid back Greek lifestyle. Could even work and easily sustain the country. Just take it easy but don't expect to live like the busy little northern bees.

The part where you claim all of Greece's problems are due to austarity when the truth is, while austarity does decrease economic activity in the short term, MOST of Greece's problems are do to the massive corruption, cronyism, and mind boggling over regulation designed to protect special interests from competition. You also ignore that it is not possible for Greece 5o continue spending like it did before it's credit became completely worthless due to decades of mismanagement.

In short, you are ignoring the vast bulk of reality and keep repeating your desire for for them to keep spending despite having no money or credit. In short, you are talking nonsense.

How does austerity address these issues? You admit that it harms growth, so what is the purpose of austerity? I doubt very much that it fixes structural problems. Fixing the problems you've identified requires relief from immediately paying down the mistakes of the past.

Greece needs: 1) a new debt payment schedule that is feasible; 2) a new credit facility to ease transitional issues created by restructuring; 3) economic liberalization.

Berlin and Brussels want #3 without any acknowledgement that 1 and 2 are crucial first steps. Worse, they want to actively punish Greece, all the while making it impossible for them to fix the structural issues. How do you get rid of corruption when unemployment is in the high 30s?

The main reason austarity is needed is because it is completely unavoidable, they literally have no choice as they have no money and no credit. So it is a must not an option. Far better would have been if Greece had liberalized their economy and sold off the vast network of state owned companies (which were nationalized back during the dictatorship period of the 1970s) before the crisis. They didn't do that so now they have no choice and no options but to bite into the shit sandwich but there is no one to blame for that but themselves.

The hard truth is if the fuckers had gotten off their asses and made the hard choices during the last five years then they would be in much better shape right now. Sell off the vast network of state owned companies and apply the money raised to paying down the debt (the money raised would pay for some where between 1/3rd to 2/3rds of the national debt depending upon auction price) and do a complete top to bottom rewrite on regulations to liberalize the economy and open up sectors to competition Yes, even eliminate the minimum wage in order to get people working as some work is better than no work.

The main problem is Greek politicians have been too cowardly to start the needed reforms while the Greek people are so delusional many of them still seem to think no big changes are needed and that the old system of corruption and patronage can just, some how, result in the good old days again. It won't because it can't. To this day the Greek government continues to not collect taxes while virtually the entire nation is made up of tax cheats. They need a system where it is harder to cheat on taxes (like introducing property taxes and a national land registry). No one is doing any of this because the politicians know it would be unpopular but without it they can't start growing again in a sustainable fashion.

That is remarkably stupid. Money isn't a tangible good; it's a medium of exchange. If you don't have enough of it for it to work as a medium of exchange, you make more.

Now Greece can't do that on it's own, but the ECB sure could help out. Austerity in the current situation is a gratuitous failure of the monetary system, not some inevitable law of nature.

Gul, no, they do not actively want to punish Greece. The main issue as far as the creditors are concerned is if they agree to debt write downs for Greece (something they could afford but which would hurt a lot) then that opens the door to countries like Portugal, Spain, and Italy demanding the same. They cannot afford to do the same for those countries too, it would literally bankrupt Germany.

Next is a political problem in that 10 years ago Germany made painful and unpopular reforms (cutting social security, increasing retirement ages, and limiting both welfare and unemployment) so German voters won't tolerate any politician who suggests the PIIGS shouldn't have to do the same. That is not a desire to punish Greece, though clearly the Greeks have fucked themselves via their own stupidity, indolence, corruption, and lack of foresight, but simply a recognition of the reality of the limits of what is politically possible.

Again, you are ignoring what is politically possible. Any big changes to ECB policy have to be voted on by representives from all countries in the Euro and the northern states don't want to suffer inflation due to bad policy in southern states. So until very recently it kept getting voted down.

The others, like Spain, have made it work. Yes, lacking control over monitory policy does take away one tool a country with its own currency had, but there are other tools. Mostly to do with regulations designed to encourage business. Greece has always had a very unfriendly climate to business with whole sectors protected from competition. That simply must change if they want to get business investment and jobs growth.

Next their costs are too damn high, completely out of wackos with market realities, they are charging German level prices but delivering 1/3rd of the productivity per hour compared to German workers. Yes, Greeks work long hours but they just don't produce much of value. You can sit in the family store for 15 hours a day but if you only make six sales during that 15 hours then you just haven't produced much towards the bottom line. Productivity matters and the best way to get productivity up is to liberalize and remove all those artificial road blocks opening up the economy to competition.

Shit, if the Greeks would all stop cheating on their taxes there would actually be room to reduce the tax rate (which would help the economy) but despite dozens of promises from decades of Greek governments no real effort has been made on this front because it is unpopular though badly needed. Despite the current money problems the first thing Syriza did when it took office was to stop collecting taxes so, yes, they really fucking are responsible for most of their problems.

Moral hazard is an issue, but Forcing an impossible behavior on Greece to teach Spain and Portugal a lesson is psychotic. Problems are for solving, not teaching lessons to uninvolved parties.

Liet thinks austarity is not unavoidable. Or at least that is what I gather from his negative rep. So, do tell us how Greece can keep deficit spending when it has no ability to borrow. I am all ears.

The reality is cuts hurt in the short term but they have no money, no credit, and as long as they are in the Euro they cannot print money so where does this magical money come from, young paduwan? We'd all love to know.

The hard truth is they have no other realistic option unless they leave the Euro but doing that would cause way worse problems (again at least during the short to medium term) then austarity.

It absolutely is not an impossible situation. That is just a fact. I, and hundreds of others, have explained the viable way out over and over. So far though the Greeks have refused to take it thinking that if they just sat there screaming no long enough big momma Merkle would give in and give them buckets of free cash without actually having to do the unpopular reforms.

That strategy hasn't wored so maybe, just maybe, they should try selling off all those SOIs and liberalizing their economy like economists have been telling them to do for decades. Now, that would take political courage, something Greek politicians never have much of, but it has worked in every other country it has been tried in. All they have to do is bite the bullet and take on the protected special interests.

How will austarity alone help in the long term?

I asked how it would fix the corruption problem, no doubt Dinner is typing his answer out right now.

From the Economy of Greece wiki

Industrial production (manufacturing) in Greece (2009)
Rank -- Production ---------------- Value
1 Portland cement ................. €897,378,450
2 Pharmaceuticals ................. €621,788,464
3 Ready Mix concrete .............. €523,821,763 - which is Portland cement, sand, and gravel
4 Beverages (non-alcoholic) ....... €519,888,468
5 Rebars .......................... €499,789,102 - which go with the ready mix concrete
6 Cigarettes ...................... €480,399,323
7 Beer ............................ €432,559,943
8 Dairy ........................... €418,527,007 - cheese snacks to go with the cigarettes and beer
9 Aluminum slabs .................. €391,393,930
10 Coca-Cola products ............. €388,752,443 - more non-alcoholic beverages!

Total production value: ........ €20,310,940,279

There's not much there there. Why was anyone loaning them money?