[HKz]

I actually wrote a report somewhat on Greece's crisis for my supply chain management class. Pretty interesting stuff.

[Chip_s_m]

Funny, the EU was envisioned as a way to avoid the conflicts that have plagued Europe since the fall of the Roman Empire. Instead, it's having the opposite effect. Just look at the tensions between the Greeks and Germans. German authorities normally would have no business dictating policy in countries not named Germany. The Greeks know they fucked up. If it weren't for the creation of the Euro, they could solve their own problems as they see fit, and Germans wouldn't have to fear the outcome nearly as much. Union has just created resentment.

The EU allows politicians from one nation to dictate policy in separate countries, even those with different cultures, values, economies, etc. Why on earth would you give up local control in exchange for a faraway government that is only partially accountable to you? Sure, you get to send a delegation that has voting power, but that's only a fraction of the vote. What benefit did the people of Europe derive from the creation of the EU? Was it worth giving up local decision-making authority? One size does not fit all, and when you're one of the individuals who's forced to wear a size that doesn't fit, you're going to be pissed, and understandably so.

The importance of federalism is about to smack Europeans across the face.

[fast_clay]

yes chip... giving up the licence to print money is indeed a brave step...

[fast_clay]

the apocolypse is nigh
http://www.bbc.co.uk/news/technology-14340470

[Blackbriar]

Originally Posted by Chip_s_m

Funny, the EU was envisioned as a way to avoid the conflicts that have plagued Europe since the fall of the Roman Empire. Instead, it's having the opposite effect. Just look at the tensions between the Greeks and Germans. German authorities normally would have no business dictating policy in countries not named Germany. The Greeks know they fucked up. If it weren't for the creation of the Euro, they could solve their own problems as they see fit, and Germans wouldn't have to fear the outcome nearly as much. Union has just created resentment.

The EU allows politicians from one nation to dictate policy in separate countries, even those with different cultures, values, economies, etc. Why on earth would you give up local control in exchange for a faraway government that is only partially accountable to you? Sure, you get to send a delegation that has voting power, but that's only a fraction of the vote. What benefit did the people of Europe derive from the creation of the EU? Was it worth giving up local decision-making authority? One size does not fit all, and when you're one of the individuals who's forced to wear a size that doesn't fit, you're going to be pissed, and understandably so.

The importance of federalism is about to smack Europeans across the face.

100% accurate. My country is not a state. it's a Nation. Portuguese, French, English, Greek, none of us feels "European", there's nothing like "United States of Europe". USA always have been a single country, but Europe is made of lot different countries since their beginning, you can't turn them into simple "states" of a greater country. Europe is dead already.

[Bobby]

I would say that the EU is actually a good thing to have. On the other hand, EMU is beginning to look like a mistake. A single currency might be possible for s small group of very similar countries. Unfortunately, EMU countries are so different from each other. Greece, Estonia, Finland, Portugal to just name a few. A single currency might work well for a while, when we are not suffering from recession and all the member countries are doing okay.

Recent events have shown what happens when problems arise. It doesn't look good at all. My guess is that 5 years from now, we still have EMU but a lot less countries are a part of it than now.

[Black Adam]

What really hapens to the world economy should the clowns in America fail to agree on a budget and default?

[Jimnik]

I hope America and the PIGS of Europe all default. Maybe finally the world will realize governments don't have bottomless wells of cash to bail everyone out.

[Bobby]

Originally Posted by Jimnik

I hope America and the PIGS of Europe all default. Maybe finally the world will realize governments don't have bottomless wells of cash to bail everyone out.

This would cause enormous problems for all of us. But I see your point. Maybe this is what is needed to make the point. Those who are ready to enjoy the rewards, must also be ready to bear the risk they take.

[Jimnik]

Originally Posted by Bobby

This would cause enormous problems for all of us. But I see your point. Maybe this is what is needed to make the point. Those who are ready to enjoy the rewards, must also be ready to bear the risk they take.

Yes, we would go into deep economic recession, possibly even depression (> 10% GDP loss). That's exactly what should have happened three years ago and if it had we'd probably be on the road to recovery right now. Instead the old system is kept alive, throwing endless money at it and not making any necessary changes.

[fast_clay]

Originally Posted by Jimnik

Yes, we would go into deep economic recession, possibly even depression (> 10% GDP loss). That's exactly what should have happened three years ago and if it had we'd probably be on the road to recovery right now. Instead the old system is kept alive, throwing endless money at it and not making any necessary changes.

yeah... since 2008, we just have seen revised economic strategies that are simply revised again within a short space in time... it is the classic 'L' shaped recession... unnecessary, extended pain...

edit: btw, i am also hoping for some default action, but mostly because i am fan of a bit of chaos...

[Chip_s_m]

The US government chose to default decades ago when it embarked on a monetary policy based solely on debt. All that's happening right now is arrival at that destination. I too hope for a default immediately. Sure, it would be painful for a short time, but then we can move on with a more fiscally sustainable system of government. Same goes for the various European governments.

It should also be noted that not only will it eventually default on its legal debt (i.e. the actual loans on the books) but also the welfare "obligations" that it's promised to pay in the future, that are by design off the books. Not only will the creditors be disappointed, but the people who foolishly planned their retirements around these promises.

[Blackbriar]

the end of suspense, wow, there was only 100% chances it would end this way, like it always did. next step : 20 trillions.

[Blackbriar]

Originally Posted by Chip_s_m

The US government chose to default decades ago when it embarked on a monetary policy based solely on debt. All that's happening right now is arrival at that destination. I too hope for a default immediately. Sure, it would be painful for a short time, but then we can move on with a more fiscally sustainable system of government. Same goes for the various European governments.

It should also be noted that not only will it eventually default on its legal debt (i.e. the actual loans on the books) but also the welfare "obligations" that it's promised to pay in the future, that are by design off the books. Not only will the creditors be disappointed, but the people who foolishly planned their retirements around these promises.

indeed, but when elections are coming, no one wants to be the guy who caused the recession. Obama loves his job more than his country (like Sarkozy, Merkel....)

[Dougie]

Originally Posted by Blackbriar

indeed, but when elections are coming, no one wants to be the guy who caused the recession. Obama loves his job more than his country (like Sarkozy, Merkel....)

They all do. Political popularity and elections have always stood in the way of smart monetary and fiscal policy. That´s why things always tend to overheat when they go well, no one wants to sacrifice popularity by pushing the brakes, even when it would be the wise thing to do. ANd as a result, the downturn is usually worse than it would have to be. And by then the measures tend to be shortsighted if the elections are getting close.