This Greek bailout is not a recovery plan – it is an economic death spiral

[CHIMO]

The International Monetary Fund has a clear idea about what is wrong with Greece. The eurozone's weakest link has a serious fiscal problem, with excessive budget deficits leading to ballooning national debt. And it has a competitiveness problem caused by its costs being higher than those of fellow members of monetary union.

It is also clear that the bailout orchestrated by the IMF, the European commission and the European Central Bank will merely be a short-term fix unless it can help get Greece moving again. If it can't, it will be worse than useless.

Normally, an IMF package works as follows. A team of experts flies in from Washington and offers immediate financial help to save a country from bankruptcy and to keep the speculators at bay. In Greece's case, the €110bn (£95bn) it has been promised provides two or three years of grace from the demands of its creditors

In return, the IMF demands both macro-economic and micro-economic reforms in order to generate export-led growth. Countries are expected to sort out their public finances through a mixture of spending cuts and tax increases. Often, the fund will call for privatisation, labour market reform and changes to make the environment more business friendly.
http://www.guardian.co.uk/business/2010/may/04/greek-bailout-economic-death-spiral

[DemReadingDU]

1. The United States is the main contributor to the IMF

5/3/10 The United States is the main contributor to the IMF, and when the IMF has a big bailout, the U.S. taxpayers have to foot a big part of the bill.
Listen to audio, appx 4 minutes
http://www.npr.org/templates/story/story.php?storyId=126468790


The 16 members of the EuroZone
http://simple.wikipedia.org/wiki/Eurozone

The top 20 countries of the International Monetary Fund
http://en.wikipedia.org/wiki/International_Monetary_Fund


So does anyone know how much the U.S. is to contribute to the bailout of Greece?

[katanalori]

2. from John Mauldin, Editor

"Outside the Box" - an e- newsletter I got a couple of days ago:

"It now looks like almost 30% of the Greek financing will come from the IMF, rather than just a small portion. And since 40% of the IMF is funded by US taxpayers, and that debt will be JUNIOR to current bond holders (if the rumors are true) I can't tell you how outraged that makes me."

[DemReadingDU]

6. Oh my

So how many billions of our taxpayer money is being used to bailout Greece? Then to bailout the rest of the PIIGS (Portugal, Ireland, Italy, Greece, Spain)


edit - Let's multiply this out

$146 billion is supposed to be the amount of the total bailout to Greece.
30% is from IMF, so that is $43.8 billion
40% will be from the U.S., so that will be $17.52 billion

:grr:

[Zotz123]

7. Greek Bailout

One of the prior posters indicated he/she was "outraged" at the fact that the U.S. is a substantial contributor to IMF, and that the IMF aid to Greece will not have seniority over Greek debt. The prior poster is being silly. This is very much a domino scenario and the U.S.'s world wide interests need a high degree of security, only part of which is provided by the IMF loan. Let's hope we're lucky enough that this present effort calms things down and doesn't spread to Portugal and Spain (or Ireland and Italy). Otherwise, this could get very, very bad and spread to us directly. No "outrage" necessary or required.

[DemReadingDU]

8. The outrage is from John Mauldin

I received the same e-newsletter

[dotymed]

10. It needs to spread globally.

Maybe then, our now globalized citizens will unite with us and throw off the shackles imposed on us by the elite-ruling class. Unregulated capitalism is the harshest economic system (really a governing system) ever perceived. We must destroy this hideous infection of our world. The non-elite, out number the ruling class, millions to one. To even contemplate that these "special elites" should prosper at an oppressive rate (any damned rate) over the masses of humanity is illegal and immoral. Hell, it goes back to the magna carta. Feudalism is the correct term for unregulated capitalism. Other nations know this better than we do. They globalized us for their profit. Now we have to use that globalization to unite the common citizens of the world against the atrocities of the comparative few. In America, the rethugs (and the majority corporate owned democrats) scream socialism when there is talk of raising taxes on the wealthy. In the 1930's the top rate was 90%, in the 1970's it was 75%, was America a "socialist" nation back then? Since globalization, that scenario could fit most "Democratic" nations. If a country Democratically elects a leader who actually taxes the wealthy and helps the impoverished, America bankrolls a coup (almost always military, so the opposition is killed) so the wealthy can, once again, oppress the majority. Of course. a new leader is "elected" (Democracy of course), after the opposition is silenced through death or intimidation.

[pscot]

12. Be careful what you wish for

It's not 1929. The corps were afraid of communism back then and had to capitulate, or at least cooperate. Today we have a partially militarized state, a free market ideology, and no world socialist movement to scare the capitalists.

[dotymed]

15. I understand.

There are a lot of may-be's in my rationalization. For instance, maybe the repressed would be for (many in these countries have realized the merits of more socialism and the evils of capitalism, they live it) a more socialized and less predatory system. But it has become like the old "Jerry Clower" joke; "just shoot in here amongst us, one of us has to have some relief."
This neo-feudalism is sweeping the world, due mainly, to the injustices of unregulated capitalism. Americans seem to be the last to "catch on." Even though the majority of Americans have been hit hard also. Our pure propaganda style MSM, is not as prevalent in most other countries. Ironically, before reagan rescinded the Fairness Doctrine for "free market forces", Americans were some of the best informed citizens of the world.
We must unite with our already globalized, fellow citizens in order to change the status quo. Most of the "top 20 civilized nations" have already flexed their muscles and have gotten many concessions that Americans only dream about. Unfortunately, the class war raged by the wealthy, is threatening to eradicate even those individuals rights.
Maybe, just like in other destructive situations, we have to hit "rock bottom" before we can fix the problem?

[upi402]

11. Oh gawd, bubble searching for a pin

It just keeps getting worse.
I wonder if Mauldin feels that the bubble's search has finally found its pin?

[whyverne]

3. See, it's very simple.

To get out of debt, all you have to do is stop buying things and sell more things to other people. Except that everybody has the same plan so I don't know who those other people are.

How's that SETI thing going? Maybe we can find some ET's to sell to.

[Statistical]

4. The issue is govt debt.

To get out of govt debt the govt needs to collect more in revenue that is sends out in expenses.

Very simple concept. Likely raising taxes AND cutting services are necessary to resolve any major debt issue because relying only on taxes OR cuts will be too much of a hardship.

International trade is not a requirement for repaying debt. There is no economical basis for that assumption and your post relies on that faulty assumption.


Imports/exports make up only about 15% of GDP in US.

[whyverne]

5. I just reads what I sees.

"In return, the IMF demands both macro-economic and micro-economic reforms in order to generate export-led growth."

[pscot]

13. Shock Doctrine

The Greek proletariat don't seem to be taking it very well.

[dotymed]

9. From past observations

The IMF offers a "loan" based on specific conditions. These conditions include letting the speculators in and allowing them to privatize the utilities and basic services that were guaranteed by their tax dollars. They literally sell the country off to foreign speculators (investors) and make the impoverished citizenry suffer the new costs from these privatized entities. While the elite, who have already pillaged and thrown the country into default, are not held responsible in any way.

[dixiegrrrrl]

16. I got laughed at when I said the same thing a few days ago.

So I will only add this:

"What do you get for pretending the danger's not real
Meek and obedient you follow the leader
Down well trodden corridors into the valley of steel
What a surprise!
A look of terminal shock in your eyes
Now things are really what they seem
No, this is no bad dream."

Those of you who know the tune can sing along...

[Kringle]

14. Greece could sell some islands

the US has thousands of tons of nuclear
waste.

connect the dots