“Okay it’s time to go now - they have started throwing stones.”

Thank you for your cooperation, sir. Photo: AFP

The words were calm but it was hard to miss the rising panic in the voice of my Greek host Danai as stones pummelled into the building behind us as we watched the latest episode in the demonstrations that have been rocking Athens for the past month now.

Yesterday the tension was palpable.

Women who looked like they had just walked out of a Louis Vuitton store put on their face masks, gripped spray bottles and marched into the crowd of people protesting in Syntagma Square, the main gathering point for the protest movement.

And they needed it; by late afternoon protesters had been injured by tear gas and reportedly some protesters had been beaten by riot police who many demonstrators accuse of trying to incite violence. By night stones and sticks were flying and the protests had become truly dangerous.

The crowd of tens of thousands of people have been protesting against the loans the Greek government signed with foreign money lenders and the austerity measures the governnment is now trying to impose on its people.

These women might not have looked like typical political activists, but like most people from Athens they looked angry.

Danai, who I am couchsurfing with in Athens, has spent the last two days patiently trying to explain to me the feeling among Greek people about this financial crisis.

The two main feelings that she touches on again and again in our conversations is a fear that Greek people have that the conditions the EU and IMP are trying to impose on Greece will threaten the country’s very soverignty and a deep, deep anger at Greek politicians who are accused by their people of mass corruption and poor governance.

The middle class Danai explained believe they will be hit hardest by the austerity measures and the rich will go on not paying their fair share of taxes just as they always have.

And no-one has any faith in their politicians, Danai explained.

In Britian this week David Cameron made a chest-beating speech declaring his desire that Britain not contribute any money to helping Greece. The Greek government has been dishonest and now they should suffer, was the unsaid undertone.

When I told Danai this her anger very naturally matched Mr Camerons’.

“But it is the Greek government that has done this, not the Greek people. We are angry at our government for this, but why should we be punished?”

At a dinner last night one of Danai friend’s used a joke that is doing the rounds in Athens to explain how people view their politicians.

In the joke a local MP is looking for a job for his son who has finished school but refuses to go to university. The MP was to show his son how tough life can be and teach him to work hard, so he calls a friend who is a minister and asks if he can organise a hard working job for his son.

A week later the minister calls back and says, ‘I have a job for your son, he will be a secretary in my ministry, he will earn 10,000 Euros a month and he can start next week. But the MP complains; ‘this is not what I wanted, I want to teach my son how to work hard.”

So a week later the minister calls the MP back.

“Okay I have another job for your son, he will be a secretary to the Minister of Defense, he will earn 5,000 Euros a month and start next week.”

But still the MP complains.

“That’s not what I wanted, don’t you have a job that earns 700 Euros a month and involves hard work?”

And the minister replies: “But that is impossible, you need qualifications for those jobs.”

Many Greek people, like Danai and her friends, feel they are now being punished for these sins of their politicians.

The other fear,  the fear of losing control of Greece, can also be seen on the streets of Athens.

When we were talking about the reputation of Greek people for driving in a fairly crazy fashion and disobeying all road rules Danai told me for Greeks following rules can still be an issue.

“We were ruled by outside powers for so long I think for us we still really want freedom and not to follow any rules,” she explained.

And it is this attitude that more than anything is perhaps what is hurting Greece the most. It’s government did after all not follow the financial rules for a very long time and now its people are bristling at the idea of their country being told what to do.

“What is the worst-case scenerio that could eventuate from this crisis?” I asked Danai over a coffee (in Athens even mass protests haven’t closed the city’s cafes).

“For us to agree to these loans and for the poor and the middle class to get poorer and for the few rich people to get even richer and rule everything,” Danai replied.

“And the best-case scenario?”

“For the Greek courts to rule that these loans are unconstituional and for Greece to renegiotiate them,” Danai said.

And then her mother inturrupted.

“And for new laws to throw in jail all the politicians who create these deals and steal from the state.”

“And what do you think the most likely outcome will be?” I asked.

“We just don’t know, we don’t know,” Danai said.

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260 comments

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    • Erick says:

      06:13am | 30/06/11

      Heh. Greek governments were popular because they dished out money to people in the form of welfare and overpaid, protected government jobs.

      But it was money that the governments didn’t have, so they borrowed to fund their bribes to the voters.

      Eventually the bill came due, and entitled Greeks are blaming “the government” for their woes - but it was the greed of all the socialists that brought about the crisis.

      Spain will be next. And the US is heading the same way, with its enormous and growing deficit.

    • Taz says:

      06:39am | 30/06/11

      The first two paragraphs sound a bit to close to home for my liking. Thanks in advance Kevin and Julia.

    • Phil says:

      07:03am | 30/06/11

      Erick You are spot on. The greek people need to have a good hard look at themselves. They voted in the governments. Sure mild corruption may have been evident, but you cant print money forever without it coming home to pay up.

      I agree, I have said for nearly 2 years now US will default on the bond markets late this year to mid 2013. They cant continue to borrow from China and sustained imflation will not solve the issue the way they think.

    • d says:

      07:32am | 30/06/11

      Dont just thank kevin and julia, thank jonny boy for tax cuts and all the rest of them.

      All polititions live to be re-elected, it is there only job. All the little bribes they dish out is what is causing massive debt. Each party is as bad as the next and i dont see an easy way out

    • KH says:

      07:43am | 30/06/11

      Taz - what a stupid comment to make.  Government pay in Australia is less than private industry - in the kinds of jobs I was looking for last, the differential was up to $20K per annum.  The lower pay is made up for by better job security, and RDOs and the like - that is fair enough. 

      Greece has a very different rule - government jobs are massively overpaid, and underworked.  Worse, a friend of mine who works in the financial industry in Europe was telling me you can inherit pensions in Greece!  48% of the population were claiming some kind of welfare, most of them not working, and therefore not paying tax.  Of course they are protesting - the gravy train has come into the station - its the last stop and the train is being decommissioned.

      In Australia, both sides are equally guilty when it comes to middle class welfare - they use it as bribes for votes because it is easier than having any policies.  The Labor government might not be the best ever, but Abbott has no policies - just anti-everything.  That is lazy and pathetic from a PM wanna-be.  Its hardly inspiring for the future, whichever way it goes.  Having said that, we are hardly in the same position as Greece.

    • S.L says:

      07:52am | 30/06/11

      I wonder what the percentage of Greeks are involved in the outrage and violence compared to what the world media depicts. A crowd of ratbags throwing missiles at riot squad police outside parliament doesn’t not make a whole country up in arms…...........

    • Pete from Sydney says:

      07:53am | 30/06/11

      Hey Taz…middle class welfare?
      That’s more a Little Johnny and Lionhearted Costello thing

    • Michael says:

      08:15am | 30/06/11

      KH you were doing so well until you decided to do the lazy and pathetic lying about Abbott and his having no policies, just an outright lie, you do more damage to your credibility when you tell lies…the same lies trotted out in here almost daily, than you could by just being an ignorant fool.

      A pity.

    • Deeman says:

      08:37am | 30/06/11

      Michael please enlighten us with Tony’s policies as I think most of us still don’t know what they are. Michael did you watch Q&A with Joe Hockey the other night. If he is the future treasurer god help Australia

    • Dash says:

      08:39am | 30/06/11

      @d - except that whilst the Howard government was giving back to the taxpayer, they also managed to balance the budget, pay off $96b in ALP debt, restore the nations AAA credit rating and generate GDP growth the envy of the Western world!!

      @KH - Compare the LNPs record of fiscal management against that of this current pathetic socialist rabble in the ALP. You might just wake up.

    • meh says:

      08:54am | 30/06/11

      “it was the greed of all the socialists that brought about the crisis.”

      The biggest socialist countries in Europe (Sweden / Norway / Finland) are not in financial crisis. Ireland chased the economists darlings and that got them into trouble.

    • Deeman says:

      08:56am | 30/06/11

      Dash they balanced the budget, by taxing us more (GST) and by sell off assets and not spending on infrastructure. The problem is Liberals don’t spend on important things like infrastructure but they do spend money on middle income welfare/bribes to get back into office. The Labor governments do spend money but stuff it up so no one really wins except middle income welfare recipients. If Joe Hockey is anything to go by I feel sorry for Australia

    • Tubesteak says:

      09:00am | 30/06/11

      Erick and KH have hit this one so far out of the stadium that it might just end up sitting in geostationary orbit.

      The Greeks ar elike a bunch of whining children who are crying about losing their XBox because dad lost his job because he was a drunken incompetent. They need to get some perspective.

    • David of the Grand Academy of Adelagado. says:

      09:01am | 30/06/11

      “KH says: 07:43am | 30/06/11
      Taz - what a stupid comment to make.  Government pay in Australia is less than private industry “

      KH, you perpetuate the same myth that has gotten Greece into so much trouble.  In NSW the average public servant earns $11,000 more than the average privately employed person. There are too many public servants, they earn too much, and do too little.

    • Tubesteak says:

      09:15am | 30/06/11

      Dash that’s a load of crap and you should know it. Those things had less to do with Howard and more to do with the mining boom at the time as well as favourable global economic conditions. Howard left us with a structural deficit in the budget that only looked good in boom times where the economy is on a protracted high and not at normal levels. Hardly good economic managers as they squandered the opportunity to invest in the nation and wasted it on buying votes. Almost the same thing Labor is doing now because they don’t have the guts to implement their policies and stand up to the whingers.

    • KH says:

      09:22am | 30/06/11

      Dash - compare the global financial position when each government has come into power and you might wake up.  The coalition has for the last several decades, been in power in times of growth - labor always comes to power just when things go bad - this is not their doing, unless you are suggesting that Kevin Rudd was somehow responsible for the GFC?  Australia has virtually no impact on the global economy - we are simply too small, but we are at the mercy of it.

      Michael - what are they?!  I have no idea what the coalition stands for - what are their publicly stated policies?  I have changed my vote before, and I’m sure I will do it again in the future, but I want some policies.  I want something to hold them to if they get power, so they can be tested against it.  If they don’t tell anyone the policies, they will have a blank cheque to do whatever the hell they want - at this stage, it is likely they will win an election simply because people don’t like the current government - the potential for catastrophic consequences for a large portion of Australians is huge if you have nothing to hold them to.  I would consider that far more dangerous than anything the greens can do…......

    • Dan the Man Levitan says:

      09:23am | 30/06/11

      Good call Erik.  I was about to say the same thing.  They weren’t rioting whilst all those borrowed funds were being dished out.  The same thing will happen to the US if their bills ever come due

    • Louie says:

      09:28am | 30/06/11

      Michael, thought bubbles do not qualify as policies.

    • Mcihael says:

      09:39am | 30/06/11

      It is becomming more and more evident, that some folks just don’t bother to read or look for anything, i mean seriously is there a Liberal leaning person in here that really thinks the Labor party didn,t have policy until Kevvy showed up?

      KH and Deeman, seriously? you had never heard of the Liberals or any of the things they stand for until today? didn’t hear anything during your last local elections or the last say….Federal election?

      KH and Deeman, do you remember any of the policies from the 2007 election? from Labor obviously, as you both know full well the Liberals have never had a policy, ever.

      Facepalm.

    • Nonmus says:

      09:41am | 30/06/11

      ‘Bribes to the voters’ sounds familiar. Same category as establishing vast government departments and quangos to administer non-existant perils like imaginary disasters driven by Gore’s debunked climate change scenarios, and supporting so-called refugee migrants to develop a constituency you wouldn’t otherwise have. Urrr, stop the bus please, I think I’m feeing sick.

    • Deeman says:

      09:42am | 30/06/11

      Michael that’s just propaganda like the Russians and Chinese put out.  Tony Abbott has yielded to pressure from fellow Liberal Peter Reith to abandon his low-key approach to industrial relations, promising he will take a ‘strong and effective’ policy to the next election. So what is the policy on IR? You might have policies on a web site but its just propaganda.

    • Adam Diver says:

      09:46am | 30/06/11

      Well done D & KH, just keep your head in the sand.

      Serious question to people with an ability of original thought,

      Do you think Australia will ever face a similar situation? Despite the current ALP throwing around money like confetti, look what happens to them in the polls, and the effort to promote a “wishful” surplus.

      I think the legacy of howard/costello economically speaking, is the importance of a surplus and balancing the budget, and despite the screams of the left for money for every cause under the sun, it seems the silent majority can still see the importance (or safety) in balancing the national books. Something I am very proud of BTW.

    • Jim says:

      09:48am | 30/06/11

      @Tubesteak; is this the latest spin coming out of the Groupthink Tank? That Howard and Costello weren’t good economic managers, it was the ‘mining boom’?

      Really.

      And yet a $900 handout by KRudd to buy votes ‘saved; us from the worst of the GFC…it had nothing at all to do with the mining boom…nooooo.

      The mining boom started well after Howard became PM; under Hawke and Keating mines were closing down everywhere. Hpward improved our economy, got the dollar looking good and interest rates dived. This made it viable to reopen old mines or start digging up marginal deposits. We were in a fantastic position to take advantage of the big demands coming from China and India BECAUSE of the economic and workplace reforms instigated by Howard, not despite it.

    • Michael says:

      10:09am | 30/06/11

      Propaganda? ok, well there ends my lesson. Thanks for the edumacation Deeman.

    • Economist says:

      10:20am | 30/06/11

      There’s a lot of uninformed comments here. Can I suggest people actually pick up and read a budget paper.

      So lets put things into perspective. Australia is the 13th largest ($1.25T) economy in the world, Greece is 32. We have three tiers of government and each behaves differently. The governments take about 30% of GDP in taxes. There are a variety of taxes to broaden the tax base and for taxes to grow when the economy grows. Greece and the US have a tax problem we don’t.

      On the expenditure side, the largest item is welfare at 30% or around $110B a year. The federal public service is around 5% of $17B to employ approx 160,000 people. To put the $17B into perspective. The federal government also spends around $10B in direct subsidies to the private sector i.e. think the car industry etc. It also spends around $40B to $50B on purchasing equipment and services from the private sector, from health, education, defence, employment services etc. Across all tiers of government there are around 1.1 million public servants employed with State and Local governments delivering service to you.

      Our predicted federal debt levels may reach $200B or 16% of GDP, but both parties have promised a return to surplus in the near future, something which Greece never achieved. The State governments are a different story, depending on the state.

      We are not heading anywhere near Greece’s problems, so stop trying to talk our economy down because your favourite party isn’t in power.

    • Dash says:

      10:21am | 30/06/11

      @KH - you sound like you have swallowed the ALPs bullshit hook line and sinker! Working in the financial services sector, I can tell you, the GFC was not to Australia what the ALP make out. Consider the following:

      1. Australia started from a position of zero debt with over $26billion in the Federal governments bank account. Due to the LNPs financial management. No other western nation started in the same position.

      2. China continued to grow at 10% during the “crisis”. It’s appetite for our natural resources meant that we continued to grow when other western nations fell into recession. We have quite a unique economy by comparison to other western nations.

      3. The Howard government brought down the Financial Services reform Act. The corporate governance and capital adequacy requirements of that legislation, meant that the financial services sector had extremely strong balance sheets and were largely not exposed to the toxic assets that brought down banks in the US and Europe. There were no financial services collapses in Australia. The industry is dominated by local players.

      4. The Howard government after paying back $96billion in ALP debt, produced balanced and surplus budgets! If it was an ALP government during that time, I would suggest to you (and so would history) that by the time the “GFC” came around, we would not have had a surplus and we would not have paid off the debt! How would Australia’s defecit be looking now if we had 15years of ALP government in the lead up?

      5. The impact of the GFC was minimal, we didn’t even go into recession. This had zero to do with the ALPs $900 handouts to dead people and everything to do with the management of the economy by the previous government and China’s growth and appetite. In fact, the “second stimulus” overheated the economy producing 7 rounds of interest rate rises prior to the last election.

      6. If you haven’t noticed, this ALP government has been in power during a time of growth! Our economy has continued to grow. There was no recession in Australia for the reasons I outlined. And in fact, the ALP has been in power during the largest resources boom in the nations history. Yet they have still not been able to balance a budget let alone produce a surplus. They continue to borrow at ove $130m a day. They have stripped $2billion away from Australian families, removed tax incentives for supperannuation savings, means tested the private health tax rebate, introduced a flood levy, and now they are talking about burdening the economy with an $11billion cost for nil net gain to the environment.

      It’s time ALP apologists stopped making excuses for what has been very poor and wasteful government. Some of the ALPs management has been laughable. Green loans, insulation fiascos, rorting of taxpayers money, handouts to dead people and people over seas, announcements of East Timor policy that never existed, Malaysian nonsense, balls up of the live cattle trade policy. It astounds me that there are still people out there that actively support this type of crap government and continue to make excuses for it!

      At what stage will you hold the ALP accountable for their job without making excuses for it?

    • Markus says:

      10:25am | 30/06/11

      @David of the Grand Academy, KH was not incorrect, you’ve just misunderstood her statement.
      Government jobs pay less than their private industry equivalent.

      Of course when looking at averages they will pay more. There isn’t exactly a government equivalent of an apprenticeship or a fast food chain, is there…

    • Shane From Melbourne says:

      10:27am | 30/06/11

      Actually it is a combination of problems, too low retirement age, overly generous pensions, rampant tax evasion, being tied to the Euro. Eventually they either default or leave the Euro and take up the Drachma or both.
      Howard was the ultimate socialist- he expanded the modern Australian welfare state and got the middle classes hooked upon middle class family welfare crack….

    • Dash says:

      10:40am | 30/06/11

      @Deeman - 100% of the GST went to the State governments. What did your State ALP government do with it? What did they do for state roads, state health, state education. How much infrustructure do you have to show for that revenue?

      Also, the Howard government delivered 5 consecutive years of PAYG tax cuts! The ALP had their first chance to deliver tax cuts last budget and delivered zero! In fact everything the ALP hs done since comming to power, is increase taxes either directly or indirectly. Profits tax, carbon tax, flood tax, means testing of private health tax rebate, removal of tax consessions for superannuation contributions, freezing of family benefits!

      As I have said before, the LNP may well have given something back to the people paying all of the tax (i.e. middle and high income earners) but they also BALANCED THE BUDGET!!!! If they gave and racked up debt (which is what the ALP are doing now) you might have an argument!

      The socialist view of knock down the tall poppy and give me something for nothing is a complete nonsense and the type of politics which has brought down Greece.

    • AdamC says:

      10:50am | 30/06/11

      I am inclined to agree with Economist here. The current government may be appalling, but they are hardly Greece appalling. Australia doesn’t have a debt problem.

      (That is not to say that we won’t have one in the future, given Labor governments’ penchant - demonstrated around the world - for spending all their revenue and more across the business cycle.)

    • Margie says:

      10:54am | 30/06/11

      The one mistake the Howard Government made is to give money to build infrastructure to the Labor States & trust them to do the right thing.. Instead of building this, they wasted it on mismanaged schemes (as per usual) and so it evaporated, then blamed the Libs for not building it. Labor’s waste and mismanagement of money is legendary - see Keating, N.S.W., Qld, Cain Govt. in Victoria et.al

    • Michael says:

      10:55am | 30/06/11

      Louie, what thought bubbles mate? i am looking at PDF’s downloaded from the site not at all dissimilar to the ones that can be found at

      http://www.alp.org.au/agenda/more—-policies/

      Apart from the details the big difference is what? the format used on the website? PDF’s or pretty pictures of actors and models.

      Didn’t notice the thought bubbles.

    • David of the Grand Academy of Adelagado. says:

      11:21am | 30/06/11

      markus says… “@David of the Grand Academy, KH was not incorrect, you’ve just misunderstood her statement…. There isn’t exactly a government equivalent of an apprenticeship or a fast food chain.

      Of course there is! Spraying weeds or mowing lawns is not high tech. Answering phones is not difficult. Photocopying is not physically demanding. But all these pretty menial jobs pay very well in the PS. (i.e. Federal, State and Local govt.) There are plenty of other blue and white collar jobs in the PS that are the equivalent of the ones you describe but the Govt pays much more for much less. (And by the way,  apprentices and fast food workers could teach most public servants what work really means.)

    • Markus says:

      11:38am | 30/06/11

      “Answering phones is not difficult”
      Nobody who has ever worked in a call centre, government or private, would ever claim this.
      In terms of soul-crushing professions, this one is right up there.

    • wally the worker says:

      11:52am | 30/06/11

      What’s a Greek urn? Not much, because of the Euro.

    • Nicholas says:

      11:56am | 30/06/11

      Erick hit the nail on the head…

    • reap, sow etc says:

      12:25pm | 30/06/11

      There is not difference between the people and their government. We are suffering under the yoke of the red/green coalition, because we have lots of idiot hippies who voted for them. The same thing happened to Greece. They voted for free money and mass tax evasion.

      Going broke, is exactly what every Greek who voted for their government and dodged tax deserves. For those who paid their full tax share and voted for the other guys, I pity them both.

    • SimonTigey says:

      01:06pm | 30/06/11

      We need to trim the size of our public service by at least 15%. The public can no longer be burdened with higher taxes each year just to fund these people. Every organisation has downsized and become more efficient, yet the government has not, this is where a large chunk of our tax money goes. I also notice that Juliar Gillard wants to massively increase the size of the public service and union members with the carbon tax so she has more people to vote for her come election time. We need a much smaller, lighter less burdensome public service and a smaller government with much less intrusion in peoples lives. I am so glad this is Tony Abbott’s vision and policy when the Coalition gain power!!!

    • Tubesteak says:

      01:19pm | 30/06/11

      Jim pick up an economics textbook and flick to the macroeconomics chapters and read the part about fiscal policy. You’ll find out how wrong you are.

      A budget surplus does not equal good economic management. It merely means the government has spent less than it earned (through taxes) in that particular year. As others have noted, the Libs managed to do this by selling off many of our assets and not spending or building anything because “it’s a State issue”.

    • Economist says:

      01:19pm | 30/06/11

      @SimonTigey, two things, while I agree that the public service can be more efficient, you don’t understand that a 15% cut federally would result in a $2.5 billion dollar saving or 0.8% of government revenue. It’s piddly re read my post above to see where your tax dollars are spent. Secondly, look at the Liberal governments policies, I see no indication that there plans will significantly reduce the Public service given the programs they still plan to run and manage, they only stated that they will reduce the Public service through natural attrition.

    • Ando says:

      02:22pm | 30/06/11

      Economist has given the most factual account

    • RyaN says:

      03:01pm | 30/06/11

      @Erick: it is true what Margaret Thatcher said “The problem with socialism is that sooner or later you run out of other peoples money!”.

      I present to you Greece as exhibit A.

    • James1 says:

      05:02pm | 30/06/11

      Apologies mods for the lack of relevance, but I owe RyaN this.

      I apologise if you thought I was calling you a Nazi in the thread earlier this week - I did not intend to do so at all.  I only meant to highlight the fact that one should not quote internal Nazi propaganda as evidence for anything, as it displays an extreme gullibility.

      I also am insulted that you think I am a lefty for valuing historical accuracy, but I am happy to let that slide.

    • RyaN says:

      10:04am | 01/07/11

      @James1: fair enough James, you make a good point. I am sorry for calling you a lefty mate, I didn’t mean to offend you.

    • TChong says:

      06:54am | 30/06/11

      The Greek police force must be a pretty tolerant bunch.
      Such crowd behavior, - assaulting police,  would earn bullets in reply in NSW , Vic, Qld and SA.
      Maybe the officers (being public servants) are sympathetic to the cause. ?
      BOF , and his far right advisors have thought this one thru.
      BOF cynical exemption of NSW police to the new IR rules was a deliberate strategy to keep the cops on side.
      If problems do occur , BOFs palace guard of extra well paid police will keep the malcontents in line.

    • marley says:

      08:57am | 30/06/11

      Well, to be fair, he’s only doing what the predecessor governments did - put money into wages instead of infrastructure.  At least he’s not bribing all the public service unions, just one.

    • Dave says:

      09:13am | 30/06/11

      @TChong - who or what is BOF?

    • Eye4anEye says:

      12:55pm | 30/06/11

      BOF = Barry O ‘Farrel (spelling may be wrong) I imagine.

    • jag says:

      01:51pm | 30/06/11

      Such crowd behavior, - assaulting police,  would earn bullets in reply in NSW , Vic, Qld and SA

      Just remind me again when the last person was shot by police during a riot?

    • jag says:

      01:51pm | 30/06/11

      Such crowd behavior, - assaulting police,  would earn bullets in reply in NSW , Vic, Qld and SA

      Just remind me again when the last person was shot by police during a riot?

    • jag says:

      01:51pm | 30/06/11

      Such crowd behavior, - assaulting police,  would earn bullets in reply in NSW , Vic, Qld and SA

      Just remind me again when the last person was shot by police during a riot?

    • Roddy Sexton says:

      07:27am | 30/06/11

      Socialists = losers.

    • Barry from Adelaide says:

      08:30am | 30/06/11

      Thank you for your valuable and witty contribution Mr Sexton.

    • fml says:

      10:39am | 30/06/11

      Right,

      “The middle class Danai explained believe they will be hit hardest by the austerity measures and the rich will go on not paying their fair share of taxes just as they always have.”

      A socialist measure yes, but would it have prevented bankruptcy? The rich call taxes socialist measures and unpatriotic, but they dont want to pay their fair share. When we tax the rich here they cry i work hard why should i be taxed. The answer is so we don’t turn out like Greece. Who are the real patriots?

    • Peter says:

      03:25pm | 01/07/11

      It was both side of politics that cooked the books. The socialist are the one’s doing something about it now..

    • Gregg says:

      07:36am | 30/06/11

      ” “But it is the Greek government that has done this, not the Greek people. We are angry at our government for this, but why should we be punished?” “

      And insert Australian twice and why are the alatm bells not ringing for more people as they have for many for a couple of years.

      In the joke the PM is looking for how a lot of money can be spent irresponsibly. The PM wants to show how he is a man of the people and will save them.

      He calls a 20/20 summit, declares ” we ” are sorry but does nothing more and invites council Mayors to Canberra.
      A week later the deputy PM says, we can spend a lot of money on tinny school halls even if not all are needed and then there’s handouts for the people and an insulation program.
      But how will we pay for it all says the PM?
      Oh easy, says the Treasurer, it’s like the goose and a golden egg for the former government was very responsible with fiscal matters and left the treasury with a surplus for us.
      And the PM said but isn’t there more that we can do, something like an NBN?
      The treasurer said ” we will have to adopt the rainbow and pot of gold approach ” and eventually raise taxes so high that people could lose employment, they may lose their homes and you will have to spin some good stories.

      Chirped in the Deputy PM with an evil gleam in her eye ” I may not be able to be a full forward but I have a sharp knife and can be moving forward, propelled by lies! 

      Yep, the politicians may crow that Australia is a long way from the situation Greece and a few other countries find themselves in right now, but a Labor government is sure moving us forward in that direction just as they always move us in such a direction.

    • fml says:

      10:43am | 30/06/11

      In times of economic prosperity, the government needs to spend. The liberals did nothing but sell off our assets for short term monetary gain.
      After 11 or so years of liberals, labor need to spend on infrastructure, then the liberals when in next will sell off our australian owned assets, balance the budget and the cycle repeats itself again.

    • Dash says:

      12:32pm | 30/06/11

      @fml, you are deluded! What assets have been sold off?? Telstra? And what did your ALP state government do for infrustructure with 100% of the GST revenue? The LNP built the Darwin to Adelaide rail and the ALP can’t even build one between Epping and Parrammatta. - lol you are dead set kidding yourself!

      The Liberals paid off $96billion in ALP debt,
      retored the country’s AAA credit rating,
      generated GDP growth the envy of the western world,
      presided over the biggest tax reform since 1936,
      gave 5 consecutive years of PAYG tax cuts to workers,
      delivered over $3billion in tax cuts to Australian business,
      generated a $26billion surplus,
      set up the futures fund,
      introduced the Financial Services Reform Act,
      delivered the lowest unemployment rate in 30 years,
      increased real wages by over 15% (under 13 years of the ALP low income earners wages reduced by 3.1%),
      passed welfare-to-work legislation,
      Increased health and aged care spending to $45 billion a year compared with $20 billion in Labor’s last year in of?ce
      Funded the establishment of 25 Australian Technical Colleges
      Abolished compulsory student unionism
      Protected 170,000 hectares of Tasmania’s native forests
      Provided $2 billion through the Australian Water Fund to build Australia’s water storage and supply infrastructure
      and consistently balanced the federal budget (8 surpluses)

      And you call that nothing???

      When the ALP manage to balance a budget (any budget) - look me up. I don’t expect to hear from you any time soon.

    • Richard says:

      01:03pm | 30/06/11

      fml, I don’t know which economics textbooks you’ve been reading, but even the most mainstream orthodox Keynesian ones state the exact opposite of what you said: In times of economic prosperity, the government needs to NOT spend. It needs to save. Otherwise inflation gets out of control.

      That’s why America is in so much strife, because they never bothered to stop spending for decade after decade, through good times and bad, they just kept on spending. No, the only reason Australia is not in the same boat as America or England or Spain or Greece right now is because of a) the Mining industry and b) the fiscal prudence of the Howard government.

      Any other assertion is pure fallacy.

    • Kevin says:

      01:06pm | 30/06/11

      When did Australia lose its AAA credit rating?

    • Dash says:

      01:29pm | 30/06/11

      @Kevin - The loss of Australia’s prized AAA rating was under the ALP in 1986. And it was downgraded also in 1989.

      Moody’s Investors Service led the way in August 1986, after Paul Keating’s comments that Australia was in danger of becoming a ‘‘banana republic’‘.

      Standard and Poor’s, the other respected ratings agency,followed suit in December of that year, downgrading Australia to AA+.

      It was regained under the Howard government under Moody’s in 2002 and under S&P on the 23 February 2003.

    • fml says:

      02:01pm | 30/06/11

      Dash,

      The Adelaide - Darwin Link was an enterprise between the northern territory and south australian governments. Other than that what infrastructure have they implemented?

      Richard,

      “Any other assertion is pure fallacy.” so when is the time to spend then? save during economic prosperity, then spend the savings during the downturn? say, when a global financial crisis occurs?

    • Kevin says:

      02:02pm | 30/06/11

      @Dash
      Thanks for that information.

    • Nick42 says:

      03:13pm | 30/06/11

      Whilst I disagree that the liberals are as good as Dash reckons, sorry you come off like a bit of liberal stooge similar to some the labor stooges on this site, they did some of the good stuff Dash mentions but that was more Costello than Howard. If Costello had not been treasurer then we probably would have been in deficit due to Howard’s wasteful spending to stay in power.

      Too correct some of the misconception you have there Dash though is firstly the unemployment rates, the Liberals had the stat down due to manipulating how it was calculated, took Keating’s dodgyness about them to new heights. Lets see most of the economic reform was done by Keating - something actually acknowledged by Howard. Had some of the highest interest rates in the OECD, failed to mention that. Also you have failed to mention how badly they did when the sold the Australian gold reserve. But they did some good stuff as well like the GST, I thought that if it was allowed to be put in without Meg Lees interference it might actually been better than it was. The end conclusion of this is both political parties know how to screw up and waste money and to say how great one is without acknowledging the faults of the same party or admitting the other side can do some good just shows you are wearing an eyepatch.

      Lastly if you’re going to bag out Labor for its economic performance at least study some history. First budget surplus - Hawke government, highest interest rates - Fraser Government, highest inflation - Menzies government.

      This is by no means I think the current government is any good, there are useless ( I think they are almost bordering on being as bad the Whitlam government) but that also doesn’t mean i support Abbot. Personally there hasn’t been a decent PM or opposition leader since Keating and Hewson went head to head, for the record I voted for Hawke until Keating come in and then I agreed with Hewson and voted for him - still gutted he didn’t get.

    • Fiona says:

      08:42pm | 30/06/11

      Nick42, I too mourned for the loss of Hewson as PM…...

    • JP says:

      09:38pm | 30/06/11

      The ALP and the Coalition represent yin and yang for the economy. One stimulates, the other controls. Both are needed at different times; Liberals are good when there aren’t bottlenecks in the way (or public goods needed by the country); Labor are good when there are, and the economy can afford some waste in order to remedy them.

      It of course leads to that inevitable cheersquad divide - both overstate their effectiveness, and understate the opponents’ publicly; whilst privately, I suspect the praise and criticism is far more muted. What we don’t need is a Liberal who pushes intervention in the economy more than Labor, or a Labor leader who urges restraint beyond what the Liberals do.

      Unfortunately, the PR spin from both parties is trying to do just that. Liberals need to be less caring and more professionally efficient; Labor needs to be the more caring, but sacrifice in comparison some of that efficiency. Then you can bring in the Liberals in a boom to limit the effects of inflation (by “tough love”), and Labor in the slumps to kickstart the economy (with “expensive projects”).

      Either alone is a recipe for disaster, but together, we can keep our debt under control, and our bottlenecks minimised at the same time.

    • Dennis says:

      07:44am | 30/06/11

      Taz if you feel bad about receiving the money give it to back or give it to charity. Everyone that complains about the money being handed out should either give it back or give it to charity.

    • Bob says:

      09:35am | 30/06/11

      Why? It’s our money and we still have to pay it back when it’s mis-spent. Where do you think the dollars the government squanders comes from? Think of stuff like Rudd’s $900 ‘gift’ as a forced loan that you’re paying back whether you wanted it or not. Whether you got it or not.

      I seriously get the feeling that Labor voters don’t understand where government money comes from.

    • Deeman says:

      10:36am | 30/06/11

      Bobby who said I vote Labor or Liberal or Greens?

    • Bob says:

      12:52pm | 30/06/11

      Deeman: Whoever you vote for, if you’re in the crowd that thinks those taxpayers that didn’t want that $900 should have “given it back” you still don’t understand where government money comes from. Given that it’s a common line for Labor voters to trot out, however, if I had to bet on who you or any random person who believes that that $900 came from Rudd himself rather than being a loan taken out by Rudd on their behalf voted for, I’d bet Labor though. Given that they seemed to be the ones who were suckered in by being bribed with their own money.

    • The righteous one says:

      07:49am | 30/06/11

      @ taz, in actual fact there have been cutbacks in welfare, one if which was passed by the parliament yesterday, remember the !00K + families . Yes Kevin gave pensioners a rise when he came into office, but what was written into the small print was that certain other payments to pensioners were stopped, so there was no rise to speak of, ask your grandparents. they got dudded

      Public service, cut back since labor came in from what it was to the previous government in every department except defence

    • Bev says:

      08:20am | 30/06/11

      You sure? I read that there has been a net increase of 40,000 public servants since Labour came to power. Maybe it was 4,000. I’m sure somebody will know the right answer. Anyway there has been an increase mostly by creating new departments.

    • Markus says:

      09:03am | 30/06/11

      FYI Bev, ‘cut back’ is government speak for ‘continue to increase in size, just at a slightly slower rate than previously’.

    • Economist says:

      10:28am | 30/06/11

      @Bev, in the last three years (under Federal Labor) the number of public servants has grown by 0.5%  in real terms (about 20,000 in numbers) over the three years. The most significant growth occurred under Howard. In fact the Howard government was the best friend of the federal public service. The introduction of AWAs and performance pay in some departments resulted in many senior and middle management public servants receiving bonus of up to 20% of their income for simply doing their job. Something that Labor has wound back. While the pay was good for many, feedback I’ve received was that the workplace environment was toxic because there were no clear guidelines on who would receive these bonuses, no direct measures, meaning that management looked after their mates and took the cash. It will be the same with Labors performance pay for teachers. There’s nothing wrong with performance pay when there’s a direct way of measuring performance, and Reith wants to go back to this environment??

    • Edward James says:

      07:52am | 30/06/11

      Consider this. Many of us watched the report on ABC 7 30 last night! Nick Geronimos summed up the problem pretty well The austerity vote has been passed with 155 of the 300 seat Parliament in suport.
      Greece is still a fiscal basket case, which may in time drag other countries down with it. The words coined in the USA “too big to fail” can be recalled by frightened people who share the anger about the way governments misgovern our public asserts, while some of those people may be anarchist most of the ones throwing stones and acting up are not well represented by their politicians. The local government in Greese has been flaterned by the huge numbers of feather bedded employees.  The accomadation of systemic rorting is mirrored in many of our Local Councils in NSW. When ratepayers report rorting nothing changes, the rorting is an intergral part of the formal process! There must be others reading The PUNCH who share the same concerns here in NSW as those long suffering tax payers in Greese.

    • Michael says:

      09:25am | 30/06/11

      Was that the fellow that was explaining the black economy that exists at every level of Greek governance?

      If so, it was good to see a greek person explain that Greece’s financial troubles are a product of their society as much as a product of the current government.

    • Edward James says:

      03:01pm | 30/06/11

      Yeah i think is was Michael. All the problems with governance exist because the people at the grass roots of their government permit it. People who thing good government is a joke! Edward James

    • CarbonDogg says:

      08:05am | 30/06/11

      Everybody blames the banks but it was the something-for-nothing utter corruption of the Greek state from top to bottom (tax fiddling may be a hobby in Australia, it’s a blood sport in Greece) ... as Margaret Thatcher said, the trouble with socialism is that eventually you run out of other peoples’ money.

    • Edward James says:

      03:06pm | 30/06/11

      Nah not everyone blames the Banks Carbon Dog I blame the unholy alliance between governments and the banks! Consider the USA moving toward 17 trillion dollars in debt! Who do you think is going to pay that mate? do you know why we have birth certificates? it is all about a countries capacity to pay back loans. People are like cattle! Edward James http://bit.ly/EJ_PNewsAds
      Link to political attack ads
      corruption I identify as accommodated
      by our elected representatives at all
      three levels of government.

    • Hayek's Ghost says:

      07:23pm | 01/07/11

      “but it was the something-for-nothing”

      CarbonDogg, just what exactly do you think central banking is all about? Creating money ex nihilo in an attempt to create wealth ex nihilo - ‘something-for-nothing’, as you put it.

      You can print money, but you sure as heck cannot print wheat, iron or machinery. Use your common sense and think, what happens when the money supply is artificially expanded? There aren’t any more real goods/services or resources available; the end result is simply a dilution of the purchasing power of existing money [currency debasement] and a redistribution of wealth from savers to holders of newly created money. It’s an indisious tax and expropriation [theft] of your wealth! Inflation is a tax!

      And who gets their hands on the newly created money by the central bank? Commercial banks and the government.

      Blame the Euro, the European Central Bank and the Bank of Greece [pre 2001 until it was suceeded by the ECB].

      Corruption of governments is inevitable when they grow in size and centralise power. But hard money [gold & silver coinage] constrains the damage a government can do, as well as its size; having fiat paper money that is easily and consistently debased allows the government to grow into a kleptocracy.

      It’s all about the monetary system. Think about it. It matters more than any petty sideshow, distracting red herring or so-called partisan issues in politics. It matters more than the false Left/Right-wing paradigm pushed by the media and our ruling elite oligarchs.

      CarbonDogg you mention the failings of socialism, so can you not understand how destructive socialism in banking and currency is? Ironic that our mainstream so-called ‘free marketeer’ academics, politicians and businessmen are all fervently in favour of capitalistic free markets: except when it comes to banking and currency [i.e. our monetary system], then all of a sudden they’re fully blown socialists. Their principles and values of free markets, private ownership & property rights are completely thrown out the window when it comes to currency and banking.

      There is a word for that: hypocrite.

      “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
      -John Maynard Keynes: The Economic Consequences of the Peace (1919).

    • St. Michael says:

      01:12am | 03/07/11

      @ Hayek’s Ghost: the irony of your Keynes quote being that, by definition, it is only the government that is able to debauch—or rather, debase, as in, destroy the value of—the currency.  That is because it is only legal for the government to print the currency—anyone else doing it is counterfeiting.

      And governments tend to do it a lot.  They also are able to do it easiest when there’s no physical good backing the currency—and everyone from the US down has been off the gold standard since Nixon.

    • Seano says:

      08:31am | 30/06/11

      This should be an example to both sides to stop middle class welfare and an example to us all of what happens when we vote purely on personal greed.

      Someone people on the punch recently suggested that we should able to vote on every major issue. If that were to happen I reckon we’d end up like Greece in no time flat because not enough people would be willing to make the hard decisions.

    • fml says:

      10:47am | 30/06/11

      Maybe we should have a plebiscite on whether we should have a plebiscite, the results wont be binding though.

    • Seano says:

      11:05am | 30/06/11

      Apparently that depends on who you support fml.

    • Dash says:

      08:34am | 30/06/11

      Anyone who supports a socialist government like the one we now have in Australia should look at Greece. Look at what socialism has done to the lives of the people there! And you can also look at the state of the UK after years of a Labour government there. We are headed the same way as our government continues to rack up debt to the tune of $130m daily, continues to be unable to balance the nations finances, follows class war socialist tax policy and deliberately burdens our economy with at the very least, the $11billion cost of the carbon tax.

    • Michael says:

      09:01am | 30/06/11

      Dash, they don’t support it when it turns to Greece, but right up until that point it’s all aboard the gravy train.

    • JohnB says:

      09:11am | 30/06/11

      True Dash. At the same time, they’ve sold pretty much all the assets that produce income and allowed private farms and companies to do the same to overseas buyers. Increased our population way beyond what we can afford. The only positive I can see in all this, we don’t quite, but almost, have the dumbest politicians on the planet.

      What’s ridiculous, is there’s no plan. We ignore Australia’s running on debt, our dependents on welfare is increasing, our infrastructure has been sadly underfunded (more debt)....our production of everything is declining…The only thing we do well is consume..we’re selling all the stuff we can pull out of the ground as fast as we can..NO PLAN…. Hardly a bright future for Australia with the politicians we continue to vote for..

      Our great grand kids will curse us….

    • JohnB says:

      09:19am | 30/06/11

      As much as I can’t begin to comprehend socialist policy there’s no other party in Australia that’s much better. We need complete reform.

      We have generations of unemployed, we have sleazy government policy that shifted many chronically unemployed on to the disabled list. There are grants made to favourite people that don’t make sense. Rounded up ALL POLICY is driven to improve the election hopes of individuals and parties. Not exactly what Aust needs.

      Australia is a basket case waiting to implode. It will be very messy indeed.

    • KH says:

      09:28am | 30/06/11

      I doubt it - our financial regulations have been far tighter than in any of those countries.  Further, all the ones you mentioned are in the European union, which has a large effect as well.  The GFC exposed them badly, unlike here where the banks didn’t have nearly as much exposure.  Don’t get me started on their millions of refugees, poor employment prospects, and non performing currencies.  We are hardly in a comparable position.  You must live in a very tiny world in your own head if you can’t see the bigger picture - Australia is doing pretty well in the circumstances, in case you didn’t know.  If the EU goes down, we will feel it, no matter who is in government.

    • JohnB says:

      10:22am | 30/06/11

      You think KH everything’s hunky dory hey?

      Declining yields of agriculture.
      Land desertification.
      Selling land we no longer get to use.
      Exploding population (double by 2050).
      Increasing debt. (You do comprehend that don’t you?). It means we spend more than we’ve got.AND we then have the added cost of funding the debt WITH declining revenue. At the same time there was massive tax revenue increases in the GST and asset sales.
      We are still living on personal debt. This is not an infinite supply.

      I put to you KH, you are viewing the position of Australia way too optimistically. We used to farm and sell wool, we now sell coal, oil, gas and iron ore. That’s ALL we do other than provide service to each other. Where is the income in the future?

    • Dash says:

      10:29am | 30/06/11

      KH - Yes the Howard government brought down the Financial Services Reform Act which largely meant that the Australian Financial Sector was not exposed to the toxic assets seen in the US and Europe. But since the ALP has taken over, we now have the most socialist government in our history and it’s damaging our economy and reducing the living standards of Australian families.

      It’s funny though KH that you say we are “hardly in a comparable position”, yet are prepared to use the GFC to make excuses for the poor performance of this ALP government! you cannot have your cake and eat it too!

      Australia is no longer coupled to the US and Europe like we use to be! If China goes down yes, but the EU, no.

    • fml says:

      10:49am | 30/06/11

      Well if little johnny didnt sell our national assets we would have other revenue streams and maybe we wouldnt have to pay so much tax.
      But the harsh reality is, if the government want to create lasting infrastructure and alternate revenue streams to tax, then well, you need tax.

    • Dash says:

      11:09am | 30/06/11

      @fml - Telstra! What other national assets are you referring to? And the sale of Telstra was not enough to pay for the ALPs $96billion of debt they left us. I also remind you that the LNP balanced the budget and produced a surplus.

      And I might add, the ALP government is out to destroy Telstra using taxpayers money. Stand over tactics and threats of punitive regulation to force them to give up access to their assets! Just to create a state owned and censored NBN. Disgraceful!

      The answer to your question is economic growth and sound fiscal management. Not state ownership and definately not deliberately slowing down the economy with a carbon tax!

    • Travis Gilbert says:

      11:20am | 30/06/11

      One problem: Nations with far stronger public spending than ours (Scandinavia) are not in financial crisis and have lower public and private debt than we do and a nation that has had republican administrations for the better part of the last twelve years (The US) is in a worse state than Britain. It was investment bankers and poorly regulated sub-prime lenders that triggered this crisis not “socialism”. By the way the ALP have not had a “socialist objective” since 1921.

    • Dash says:

      12:39pm | 30/06/11

      Hi Knemon - I’m happy to agree it didn’t happen in Greece over night and took longer than 4 years. My message is that years of socialist government and debt has destroyed that country! That’s a fact. And years of lefty Labour government has done considerable damage in the UK as well. And my other comments hold true: our government continues to rack up debt to the tune of $130m daily, continues to be unable to balance the nations finances, follows class war socialist tax policy and deliberately burdens our economy with at the very least, the $11billion cost of the carbon tax.

    • Economist says:

      01:12pm | 30/06/11

      @Dash, stop trying to rewrite history. The Howard government sold more than Telstra. They sold over $200 Billion in assets (to pay off a 96B debt) from real estate, to gold, to transmission services.

      There’s no denying the the Liberals did some good work, but they weren’t the economic saviors you’re making out.

      Telstra is not being destroyed by the NBN. They are now involved and have a guaranteed revenue stream. Though it’s yet to be approved by shareholders.

    • Dash says:

      01:49pm | 30/06/11

      @Economist -  Back that lovely round number up please! I never said they were saviours, but that they were significantly better economic managers than the ALP. And vastly superior to this rabble.

      If you are trying to suggest the Rudd/Gillard governments are better, I’d love to know on what basis! $900 hoandouts to dead people perhaps?? $2billion poured down the insulation fiasco?? Green loans fiasco? $43billion NBN bill? Rorting of taxpayers money under the BER?? Record budget defecit?? I don’t think you’re going to get many knowledgable supporters.

      Are you suggesting it was a bad idea to pay off the nations debt? We all know it would have grown under an ALP government.

      Which part of history do you see under threat??

      Oh and the reason the NBN is costing the Australian taxpayer so much, is because the ALP are trying to lock Telstra out. And the CEO recently told us that they only agreed to access to their infrustructure because the ALP threatened the company with break up and punitive legislation. That was reported in the Financial Review last week. When we have a government standing over privately owned companies to force access to assets, there is something seriously wrong! I know of few economists who would endorse such government action. Still you may well be the first?

    • Economist says:

      07:30pm | 30/06/11

      Here’s tbhe amjority from DoFD website, and crikey.

      Telstra: $45.6 billion received
      Reserve Bank gold assets: 167 tonnes sold for $2.4 billion
      National Rail Corporation and Freightcorp: $1.05 bn received,
      Broadcast Australia: $650 million received, current value $1.2 billion
      DASFLEET: $407 million in 1997, now worth $500 million
      Telecommunications spectrum: about $1.3 billion received, worth $200 million
      Radio licence spectrum: about $1 billion received, worth $700 million
      Property portfolio 59 sites: for $1 billion
      Airports: with the sale of separate long-term leasehold interests in Brisbane, Melbourne and Perth airports generating gross proceeds of $3.31 billion.
      Australian National Rail: trade sale that raised $95 million.
      Brisbane Airport: trade sale that raised nearly $1.4 billion for the Howard Government.
      Melbourne Airport: trade sale that raised $1.3 billion for the Howard Government with AMP, NSW State Super and BAA leading the buyout group.
      Perth Airport: trade sale that raised $643 million.
      Adelaide Airport: sold to Parafield & Adelaide Airport Ltd for $467 million.
      Darwin & Alice Springs airport: sold to Alice Springs & Darwin International Airport Pty Ltd for $108 million.
      Canberra airport: sold to consortium led by the Snow brothers for $65 million.
      Hobart airport: sold to Hobart International Airport Pty Ltd for $35 million.
      Australian Industry Development Corporation: trade sale that raised $200 million for the Howard Government.

      Estimated total today $200B, though personally this is an exaggeration. The point being not much left to privatise.

      Not to mention the other great achievement of Howard. The ability to always run an excess surplus as demonstrated by Kohler here
      http://members.iimetro.com.au/~hubbca/tax.htm It was this lovely trick used to return the money to the tax payer, like they were being generous. You gotta love bracket creep.

    • thatmosis says:

      08:49am | 30/06/11

      We are headed the same way and after tomorrow it will be easier for us to go down that slippery slope. Dont worry about what is happening overseas worry about what is about to happen here.

    • mick says:

      09:01am | 30/06/11

      The Greek Parliament has to take 150 000 jobs out of its public sector to stop a total collapse of its economy because the Greek government has for years condoned systemic rorting by employees who produce little or nothing.  Despite the loss of so many jobs there are reputed to be few changes to services.

      The parallel with NSW local councils has not gone unnoticed.  There are accounts of employees who hold down at best part time jobs,  outdoor staff wandering the streets and others spending the working day writing useless reports to justify their existence. The costs to ratepayers are significant and services are in short supply and infrastructure is run down.  Will teh stae government step in and do something?  Not on your nelly; that would be proper government.  It is easier to stand by and od nothing and that is what we are getting.

      Despite being aware of rorting nothing ever changes and the responses from our state government and its public service has been to ignore the problem, to fob it off and finally to claim that it is unable to intervene. 

      One has to wonder how long before Australia is in the same boat as Greece.  So does anyone else have experience of this type of rorting and the refusal of councils to act?

    • Angus says:

      09:07am | 30/06/11

      Greece fiddled the books to be admitted to the european union (with the help of some US banks). If their true position would have been known they would have never been admitted. Sooner rather than later there real economic position has become known. Germans should be laughing though, as greece’s woes are keeping the value of the euro down which benefits their exporters, they would be far less competitive otherwise. Germans didn’t need a destructive a war in which to dominate europe - just make things people want to buy. Anyway Greece is a basketcase and will be for some time. The population not only the government needs to take some responsibility for the position they are now in.

    • Richard says:

      12:11pm | 30/06/11

      Yes and no. It was Goldman Sachs who fiddled the books for Greece 10 years ago to make in look like Greece could qualify for EU membership. I don’t know why anytime someone criticises Goldman Sachs they get branded a conspiracy nutjob, when if you look closely enough it plain for everyone to see that Goldman Sachs in an unethical company which profiteers off the deceiving others out of their money.

      Also, a weak currency is not all that. There are up sides and down sides, but ultimately I think its better to have a strong currency than a weak currency. Put it this way: if our dollar was still at 70UScents now, we’d be paying close to $2 a litre for petrol. That would put a serious hamper on economic growth, exports of not.

    • James says:

      09:09am | 30/06/11

      Socialism my arse, the only socialising going on here is the losses of the European banks who made bad bets.  If someone is a lazy bastard and already has too much debt don’t lend them any money, I’m sorry but the Banks and the IMF are just going to have to eat their losses and learn their lesson.

    • marley says:

      09:41am | 30/06/11

      Well, if the banks give you a mortgage because you presented fake documents outlining assets you don’t have, I’m not sure that the responsibilty lies entirely with the bank.  Surely some of it lies with you, for committing fraud.

    • James says:

      10:17am | 30/06/11

      Got proof of that?  Two words for you due diligence, we have just as many dodgy buggers in Australia, the difference here is the banks (mostly) act accordingly and don’t lend them much or any money.

    • Tom says:

      12:09pm | 30/06/11

      Banks my arse. Greece has a government that bribes lazy bludgers with welfare a bit like your Labor mates would try to do here if they could get away with it. End of story.

    • Deeman says:

      12:34pm | 30/06/11

      Tom like the Liberals bribes middle class.

    • James says:

      12:51pm | 30/06/11

      Who lent money to the Greek government?

    • Tom says:

      04:22pm | 30/06/11

      @Deeman, yeah I noticed Rudd and Gillard dropped the middle class welfare the moment they came in? ...

      However such a response sounds like the crap line from you Labor drones bleat that “both sides are the same”. I will say that I agree with you. Middle class welfare and all sorts of focussed snout in the trough electoral bribes are B/S.

      @James, if you stand with your children in a snake pit don’t moan if you get bitten because that is what snakes do.

    • James says:

      04:39pm | 30/06/11

      My point exactly

    • Tom says:

      05:01pm | 30/06/11

      James, You don’t blame the snakes, you blame the idiot that stood in the pit.

      In a similar way, you cannot blame the banks, the blame belongs to the idiot socialist government that over borrowed to finance their Santa Claus fantasies.

    • James says:

      02:37pm | 01/07/11

      Ah no you blame the idiot who lent them the money knowing exactly what they were like so your snake story is the wrong way around.

    • Tom says:

      07:11pm | 01/07/11

      I am saying the banks are snakes and socialist politicians are idiots whereas you are saying that socialist poiticians are snakes and banks are idots.

      OK James, let’s call it a draw.

    • F.W.G. says:

      09:14am | 30/06/11

      At last Greece’s chikens have come home to roost as it does whith all socialist government, the UK is a typical example of reckless spending and borrowing gillard and her idiot cohorts are doing the same here, In the end it’s the poor worker that end’s up paying, as all ways.

    • marley says:

      09:39am | 30/06/11

      The problem in Greece is that the “poor worker” is the one who has been living beyond his means in a wonderland of euros, not paying his taxes and expecting a generous pension at the age of 55.  Now the chooks are coming home to roost, and the poor worker is going to have to pay for the last 30 years of unearned prosperity he enjoyed..

    • Pete #205 says:

      01:02pm | 30/06/11

      Greece’s problems run deeper than the political party in power and cannot be blamed on the current socilaist govenment alone.  The New Democracy liberal conservatism party has also had their share of power in the lead up to the current crisis.  The problems are wider than political ideologies.

    • JohnB says:

      09:23am | 30/06/11

      I think it would be very constructive to get away from Labor did this, or Green’s will do that. Liberal stand for….

      They’re all bad. They are self serving, indulgent parasites that are bringing the whole country down. It’s crunch time! The price of our apathy over the last 50 odd years will be immense.

    • Steve says:

      09:26am | 30/06/11

      So its got nothing to do with the Greek voters and (non)tax-payers then. It was all those other Greeks’ fault, not anyone the author actually spoke to. 

      I want Greece to default becasue it would punish them for lying to the rest othe world about their government finances, and punish the French and German banks who stupidly lent them the money. 

      If there are few consequences for recklessness and dishonesty, why shouldn’t the rest of us behave just as badly?

    • Richard the Lionheart says:

      09:38am | 30/06/11

      Welcome to a socialist Utopia where the air citizens breathe is taxed. The pollution is in Canberra which continues to borrow money to pay for services we don’t really want except for the whinging class. Labor/socialists invented the welfare state. Now they can’t afford to run it without massive debt. Let us look after pensioners, sick and disabled not those who make wrong choices and are unprepared to work. Greece holiday anyone?

    • fml says:

      10:53am | 30/06/11

      The pensioners and sick work do they?

    • James says:

      09:42am | 30/06/11

      Greece can never pay the money back, to bail them out just throws good money after bad, we are increasing the magnitude of the crisis to buy very expensive time for big banks.  Why are we giving another credit card to an insolvent country.

    • Harquebus says:

      10:10am | 30/06/11

      One goes, they all go.

    • James says:

      10:31am | 30/06/11

      I don’t think letting Greece max out another credit card will stop that.

    • St. Michael says:

      11:39am | 30/06/11

      @ James: try substituting the words “the United States of America” in for “Greece” and you’ve got a better sense of where the planet is heading in the next 5-10 years.

    • LeonT says:

      12:01pm | 30/06/11

      @St. Michael

      Unlike Greece, the US actually produces stuff. It may get rough for them, but they *can* pay their debt back.

    • Sylvie says:

      12:03pm | 30/06/11

      @St. Michael
      You’re late -  it took five hours for the spotlight to be trained on the USA.

    • Harquebus says:

      02:22pm | 30/06/11

      @St. Michael. Not unless they find a shitload of oil.

    • St. Michael says:

      03:21pm | 30/06/11

      “Unlike Greece, the US actually produces stuff. It may get rough for them, but they *can* pay their debt back.”

      You have that backwards.  The US probably will pay off its debt by debasing its own currency, at which point it gets rough for them—and the rest of the planet—in a Zimbabwe wonderland.

      “Producing stuff” is not an answer.  Their debt is the problem.  14 trillion vs. 2 trillion yearly tax intake, with a jittery bond market paying the balance.  If you get a run on the US dollar, which is entirely possible, it doesn’t matter what the US makes: their economy is screwed, either in the massive deflation required to bring the credit and debit columns back into balance, or in the massive hyperinflation that follows the Fed printing money to pay the debts off.  It’s not private sector debt, it’s entirely the government’s problem.

    • Knemon says:

      11:18am | 30/06/11

      @ Bob - Wow, thanks for the link, I knew Greece had problems but after reading this I had no idea their problems went so deep. You’re right, it is a long article but one worth reading. A modern day Greek tragedy indeed.

    • Erick says:

      12:39pm | 30/06/11

      That’s a great article, Bob. I was thinking of it while I read the Elsie Kinsella’s story. Clearly she didn’t talk to anyone who was aware of, or willing to admit to, the real problem.

    • David of the Grand Academy of Adelagado. says:

      02:53pm | 30/06/11

      Yes, an excellent article, thank you Bob. 

      Heres a choice quote… “The average government job (in Greece) pays almost three times the average private-sector job.”

      Australia is heading the same way, but fortunately, for now, we can rip off the mining industry to hide the problem. But in 20 years we’ll have to face the music.

      Its interesting that other posters here are quoting economic figures showing how different the situation is here and how we couldn’t possibly suffer the same problems. How naively they trust the figures!!  They should note that cooking the books to hide the truth was a Greek specialty. Don’t believe it doesn’t happen here too.

    • Harquebus says:

      09:47am | 30/06/11

      Greece and others will not repay their debts. Why? Because of resource depletion, overpopulation and the rising cost of energy. Energy makes money, not the other way around. Those wanting to bail Greece out have the most to lose and they’re going to.

    • St. Michael says:

      05:29pm | 30/06/11

      I bow to your wisdom on Flash, Harq, but when it comes to money—as in fiat money—then it’s solely governments that do that.  Not energy.

      And it is fiat money that causes most of the inflation problems in the world, because currency produced by governments is illegal when it’s produced by anyone else, and is subject to the laws of supply and demand like every other product.  When there’s too much money around—i.e. an oversupply—its value decreases.  And since the government is the *only* supplier of money, an oversupply is the fault of the government, because it’s the only one that can print it.

      Hyperinflation in particular *cannot* happen without a government printing too much money to pay its debts off.  This is always the pattern across history for governments: when you get yourself into too much debt, you debase the currency or print the money to pay it off, and screw the economy that uses that currency as its mode of trade.  Even Constantine, the supposed “converted Christian” Roman Emperor, fucked his own people in this way.

    • Harquebus says:

      07:44pm | 30/06/11

      @St. Michael. What you say is true. They can print as much money as they like but, producing energy is another story.

    • jag says:

      09:51am | 30/06/11

      “But it is the Greek government that has done this, not the Greek people. We are angry at our government for this, but why should we be punished?”

      You voted for them. Suck it up.

    • Pete #205 says:

      01:15pm | 30/06/11

      So the tough man who sucks it up can’t even bothered to check how long the current government has been in power?  The wheels of the Greek economy have been rattling far longer than the current government has been in power.  It has more to do with systemic corruption and nepotism within its entire society (including the conservative ND party).  Read, learn, speak, in that order.

    • jag says:

      01:46pm | 30/06/11

      They still voted for them, current or previous.

      Simple as that.

    • jag says:

      01:46pm | 30/06/11

      They still voted for them, current or previous.

      Simple as that.

    • Pete #205 says:

      02:30pm | 30/06/11

      And the option of not voting is a whole lot better?  It’s akin to blaming the Australian public if either Labor or Liberal are voted into government.  Sure, we vote them in, but do you really expect anyone else to be voted in?  The Greek system is basically a two-party system, just like ours.

    • St. Michael says:

      05:46pm | 30/06/11

      When both sides are equally bad, third parties tend to spring up.  That’s the free market of democracy.

    • Martin Hopes says:

      09:58am | 30/06/11

      I’m totally staggered that some people here are comparing the problems in Greece with that in Australia. Get a grip on reality peoples. The last time I checked we still have a ‘strong’ Aussie dollar and an even stronger economy. I sometimes wish we ‘were’ in dire straits like Greece, Ireland, and Portugal Etc. It would at least make people realise just how good we had it in Australia, but of course that’s ‘not’ the reality. Instead, we’ve turned into a bunch of pathetic greedy whingers who obviously aren’t aware of how good we actually ‘do’ have it here. There are many nations around the world that look to Australia with envy. Obama could only be so lucky!

      Apart from political corruption, one of the biggest problems with Greece was dropping their own currency for the Euro, the same can be said for other poorer European nations that did similar - the only winners with the Euro were Germany and France, the stronger manufacturing nations, it was smart politics by those countries and adversely bad politics from the poorer countries who dropped their own currencies.

    • Richard says:

      12:24pm | 30/06/11

      You’re wrong. The only difference between Australia and Greece is our thriving mining industry: the industry Labor wants to tax into oblivion and Bob Brown wants to shut down completely.

      As for Germany and France being the winners out of the Euro, try telling that to German taxpayers who have to waste their valuable money they pay in tax on bailing out the spend thrift Greeks, who are only just going to come back cap in hand again next year and ask for another helping of bailout largesse.

      Its a fraud. The only way to deal with a problem of too much debt is to wipe the debt out, default, clean the slate, start a new. Look how well Iceland has done. The only winners out of this tradgedy are the big bankster kleptarchies who got to make their fraudulent profits already, but who don’t have to pay the consequences for their poor decisions in the washup.

      This isn’t Capitalism! This isn’t Free Market! This is Casino Gulag Kleptocracy!

    • Economist says:

      01:06pm | 30/06/11

      Richard, can you please add some facts to your assertions. Mining in Australia contributes 5.6% to GDP, 35% (around $80B) to our export market and employs 1.3% of Australians. While important it is not the be all and end all.

      The mining tax, which I disagree with, is only only Super profits. While Bob brown is an idiot, he’s not going to get his way.

      Our total exports market is around $220B a year, even without mining its $140B a year. Greece with half the population export under $30B in goods and services. I repeat we are not Greece.

    • Richard says:

      01:24pm | 30/06/11

      Economist, you are the shining example of the way stats and numbers can be used to back up an ideological position if you twist and distort them enough.

      Look around the World~ the only equivalent economy to Australia in the world right now is Canada. The reason for that is because Canada ALSO has a thriving mining industry.

      You’ve got to take in the whole picture. If you want to isolate every little snippet of information and take it out of context then of course you can trivialise the Mining Industry for “only” generating $100Billion dollars in exports each year and “only” employing hundreds of thousands of Australians who would otherwise be jobless.

      But its not accurate to do so. One thing that Chaos theory teaches us is that you can’t look at things in isolation. The very fact that we have a thriving Mining industry in Australia causes a huge number of beneficial flow on effects which are almost unquantifiable, but which certainly exist.

      So much economic prosperity is a flow on effect from the Mining Industry, and if the Mining Industry dies, all that flow-on effect prosperity would die too. Its just so inappropriate to isolate a sector and say “it only makes $X and employs only Y% of workers so its not that important.” That’s lunacy. The only way to accurately gauge the Mining Industry’s value to compare our economy as a totality to other economies.

      And when you do that, you see that the only similar economy that is as successful as ours is Canada, because it also has a thriving Mining Industry, but that the UK, USA etc, all with very similar societies, with similar economies, with similar levels of education, and similar systems of government, are all completely screwed economically. Ergo, the only difference is our Mining Industry.

      Don’t be obtuse Economist.

    • Economist says:

      01:44pm | 30/06/11

      Richard three things. Firstly it’s not stats but dollars, we’re comparing like with like secondly, you haven’t added Norway, which has as a economy based on mining that contributes a far bigger share of exports than Canada and us. Thirdly I stated “While important it is not the be all and end all.” you stated “the only difference betwen Austrlaia and Greece”, well its not. Education exports alone is worth 10s of Billions to Australia. Who’s being obtuse now.

      Yes you are correct regarding the flow on effects.  The NPV of mining is worth many trillions of dollars, directly and indirectly.  Since when did I state I’m not for it?

    • Economist says:

      07:46pm | 30/06/11

      Richard just to further clarify the issue. It;s perfectly feasible to only look at the direct dollar figures and employment figures, because we’re comparing sectors.. Your chaos theory example can apply to anything, say public sector. No doubt you want to get rid of the public sector. Well the same thing can be said that you’ve said for mining, that there are hundreds of people, businesses dependent on government.

      Oh but we’ll save on taxes, yep but you’ll pay for it elsewhere because guess what you’ll still require the services. Just imagine a world without government. Your house is on fire, you’re not with the right insurance company, sorry the privatised fire department won’t put it out without a $5000 swipe on your credit card. What need your road outside your house graded, $10000 please want to access your road please pay the toll and as we have a monopoly its $10 a day. What your dying and need that crucial drug that’s $1200 a week, pay up, sorry no PBS negotiating a cheaper rate for you.

      Either way the services you demand from government may be cheaper, many more will be more expensive.

      Now without government we can quadruple our unemployment rate.  As many government workers are semi-professional and professional watch the wages drop in these occupation categories. Many are eminently more qualified then their private sector colleagues, so accountants, economists, lawyers, project managers, general admins staff,journalists in the private sector , prepare to take a 30% pay cut. Crime will increase but at least we’ll have a privatised police force, Joh style, to do the bidding of the few.Yes chaos theory in action, or just chaos.

    • Zeta says:

      10:00am | 30/06/11

      The worsening situation in Greece reminds me of the chaos in Ecuador in 1999.

      Ecuador was a basket case. Combination of El Niño in ‘97, the ‘98 oil price slump and excessive Government spending resulted in a 7.3 per cent GDP drop.

      On paper that wasn’t so bad, until you factored in what the Ecuadorian Government was doing with what little cash they had, buying up so-called ‘Brady Bonds’ - Brady Bonds were the precursor to the Consolidated Debt Obligation, basically packaged up 1980s debt. Ecuador, who struggled to build schools and hospitals had bought $5.9 billion in Brady Bonds, and by 1999, they were worth about as much as Bowie Bonds, that is, purely sentimental value to people who collect worthless things from the early ‘90s. Ecuador would have been better off investing their cash in a million packs of Smiths Chips and trying to sell Tazos on Ebay for all the good it was doing them.

      It might seem quaint now, in the age of the multi-trillion dollar down turn and trillion dollar bail outs, but at the time, the $250 million Ecuador needed from the IMF was a big deal. But IMF dug their heals in, ironically enough compared to what the US Federal Government would do a decade later, and refused the loan on the basis that they wouldn’t bail out economies who screwed up thanks to ‘investment’ in sketchy debt.

      The reason why the IMF held back was because they wanted a restructuring arrangement with then President Jamil Ma-huad - a 300 page list of austerity measures, tax increases and public sector job cuts before they’d sign off on the loan. Sound familiar?

      Ma-huad was screwed and had to take the deal. And it’s here you see the primary problem with the IMF. Unlike the World Bank, the IMF doesn’t just loan money, it loans money on the condition an economy remake itself in its own image. What Freidman calls ‘the golden straightjacket’. Globalise, or else.

      Ma-huad picked the easiest of the austerity measures to begin with, an increase on tax in cooking oil, which lead to violent, bloody, protracted street battles with poor Ecuadorians who didn’t understand what the IMF was, let alone that the country was in dire straits because the President had bet the farm on risky, padded-shoulder wearing 1980s toxic debt.

      But then, something magical happened to Ecuador - oil prices skyrocketed in 2001. Now, before you starting thinking ‘ZOMG, ECUADORIANS DID 911!’, remember oil prices started going up well before September, Ecuador was in a unique position to supply the US with oil outside the black triangle of the Gulf. Ma-huad did something really smart - hedged his IMF loan against a $850 million World Bank credit, paid back the loan in full, tore up the IMF’s austerity measures, lowered consumer taxes, built a new oil pipe line and…

      Today the Ecuadorian economy is in better shape than the USAs.  Still not great, they’ve only recoverd 4 points from the 1999 slump, but still snuck through 03 - 08 crisis’ better than the rest of the region.

      The lesson for Greece is simple - IMF austerity measures are not the answer to your problems, they only cause more. Greek economy is never going to be a model for the region, it doesn’t have to be, it just has to work for Greeks.

      The difference is, the IMF were waiting at the doors to the asylum with Ecuador’s golden straightjacket, but at the last minute, the tiny country shrugged it off and ran away. Greece is already strapped into theirs. Getting out of it will mean getting out of the EU - and finding out exactly what happens when you give the world’s most powerful centralised economic planning entity the finger.

    • bella starkey says:

      03:23pm | 30/06/11

      ZETA!!!!

    • St. Michael says:

      05:43pm | 30/06/11

      Truth is the Greek IMF measures are meant only to soften the impact and preserve the EU, it’s not designed to help Greece as such.

      The info on Ecuador is interesting—although again they depend entirely on favourable exporting conditions.  If the US dollar fails, they’ll be as fucked as everyone else, if not more—heavy-exporting countries get hit harder in Depressions than other more self-sufficient countries.

      At the end of the day, it is Greece that has to pay off or deal with its debts.  In one sense, a debt default might make sense: you cut up the country’s credit card and force them to start again where they can only spend what they tax—no loans from bond markets or overseas.  That’s the only moral position for a government to be in.  It’s also a Greek economy that, by definition, would work for Greeks.

    • michael j says:

      10:00am | 30/06/11

      Police trying to incite violence ? police dressed in camaflarge gear carrying assault rifles? Police putting dogs into tents and pulling out the pegs dropping the tents on the occupants including pregnant women?
      Greece?
      Syria?
      nope Dayboro 1984 at a peacefull party on private property,,
      Has any-body noticed how cheap consumer goods are but the cost of living is starting to become beyond the reach of the ‘‘middle class’‘
      86% of our mines in foreign ownership ?surly thats not good, the mines should pay more tax simply because they can ,,,,,
      Greece,, nothing like a food riot to get in the news,,Has Ireland fixed it’s problems haven’t heard much about them lately ,their police use real bullets?
      America is a dead society that has passed it’s use by date,who wants a flat screen made in Detroit ,,?
      looks like a true socialist government is the only thing that will pull the planet out of the shit,least there wouldn’t be any more Ninja loans,,all those bastards should be charged for the lives they have destroyed,,,

    • Anna C says:

      10:08am | 30/06/11

      Everyone can share in the blame for Greece’s financial woes; there is enough blame to be shared around.  Greek politicians paid Goldman Sachs a fortune to hide the real extent of their debts so they could continue borrowing unchecked by the EU.  They also misguidedly felt that because they were now part of the EU they could spend money (that they didn’t have) like drunken sailors and increased people’s pensions and salaries etc.

      The Greek people themselves have a history of not paying their taxes; which is a throw back from when they were ruled over by the Turks.  They continue to show an unhealthy pride in beating the tax man so the government’s coffers are always empty.  It is not unusual for wealthly people like doctors and lawyers to declare less than $10,000 income and pay no tax. Also the Greek’s penchant for early retirement at 53 years of age is way much lower than other countries like Germany, where the retirement age is 67 years of age. Is it any wonder Greece is now up shit creek without a paddle?

    • fml says:

      10:57am | 30/06/11

      “The Greek people themselves have a history of not paying their taxes; which is a throw back from when they were ruled over by the Turks.  They continue to show an unhealthy pride in beating the tax man so the government’s coffers are always empty. “

      Reminds of when Australians say, I work hard for my money why should i be taxed. Some people on this blog are calling the government socialist because of the taxes and for spending on infrastructure. I ask how is the government supposed to not go bankrupt if they dont tax and dont spend on infrastructure?

    • Bob says:

      12:48pm | 30/06/11

      FML: This government is socialist. Ask them if you don’t believe me. Check up on Wiki if you can’t be bothered asking them. And the problem with Labor hasn’t been so much spending on infrastructure, as their habit of pissing money against a wall and having no apparent concept of “We need money to be able to afford these nice things” - In pissing money up against the wall, I’ll emphatically NOT include the NBN, which will be their big achievement. I will, however, emphatically include Rudd’s $900 cash splash as one example.

    • MDG says:

      02:08pm | 30/06/11

      Bob- let me know when the Labor government nationalises the means of production and imposes collectivisation.  Then you might have a point in calling them socialists.

    • hot tub political machine says:

      02:41pm | 30/06/11

      One of the rules for posting on the Punch should be an awareness of what the term socialist actually means

    • Dash says:

      05:19pm | 30/06/11

      @HTPM - let me try to help The Punchers:

      Socialism is a very broad term. In general, socialism means a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, and wealth, in the community as a whole (the community being represented by the state).

      In contrast, economic liberals, view private enterprise, private ownership of the means of production, and the free market exchange as a natural and/or moral phenomena, central to their conceptions of freedom and liberty.

      Socialism as a theory would say that people should have access to wealth on the basis of what they contribute to society rather than the capital they hold. In practice, this results in the decision of who deserves what resting with the state as opposed to the free market. And the problem is that there is value in capital which is brought to the market wether that be intellectual capital or physical capital.

      The issue Economic Liberals have with socialism is that wealth is controlled and distributed not through the operation of the market economy but through the operation of the state. In essence the decisions of a few (who are nominated as representatives of the community as a whole) decide how wealth is distributed as opposed to the open free operation of the market.

      So any policy that redistributes wealth at the whim of the state fits with socialism, e.g. the profits tax and the compensation scheme under the carbon tax. State ownership of production and distribution of capital also fits with socialism, e.g. the NBN and the action taken by the ALP to force Telstra to hand over the use of it’s cable network.

      Most people consider that most economies function best where there is a combination of community and individual liberty in operation e.g. Australia. However the two major political parties are essentially arguing over what is the right combination of the two. Sweeping generalisations,  but the ALP traditionally tends to lean more towards state ownership and state wealth distribution (unionism as a collective power idea is a good example), the Liberals lean more towards free market forces and free capital ownership. The greens are firmly in the former category.

      Socialists tend to tell people they are about the greater good of the community. Capitalists tend to tell you they are about the freedom and liberty of the individual.

    • Bob says:

      07:56pm | 30/06/11

      MDG: You mean besides that they don’t and have never had the power to do this? We don’t live in a dictatorship and much of what they’d need to do would require a referendum anyway. Finally, if they went on that hardcore platform, they’d get as far as the actual Socialist party (a fringe minority group that’ll probably never get a senate seat, let alone any meaningful power) As for whether they’re a party with socialist ideals and goals, well…. They might like to argue with you if you claim they don’t.

    • Richard says:

      10:15pm | 30/06/11

      Labor are definitely socialists. The PM was a member of the socialist forum up until 2002, well after she won her seat in parliament and became a senior member of the Federal ALP frontbench.

      Now Labor are not communists, but they are definitely socialists, especially more so these days than they were in the 80’s and 90’s under Keating. Under Keating they were infact quite the economic rationalists, de-regulators and free marketeers. And incidentally it was these policies that were the foundations of the economic strength we enjoy even today.

      I cannot agree with what Dash states that the best policy is a mix of capitalism and socialism. That’s nonsense. Any socialism whatsoever is a malign influence, and the more socialism, the worse. The best and most healthiest system is one with no skerrick of socialism at all, and I can prove it.

      Socialism tries to by-pass and remove the ‘profit-motive’ from playing a role in the economy, preferring to plan the economy centrally through bureaus. But this is inherently less efficient than the free market, because all that profit really is is a signal, a form of communication, which can efficiently aggregate and synthesize all knowledge across the entire scope of the market and inform each individual or group of individuals how they may most valuably serve one another’s interests and needs.

      You’ve got to get it out of your heads that profits are ‘bad’ or ‘greedy’ or ‘evil’. They are nothing of the sort. They are purely a mode of communication, a method of information synthesis and signalling. Without this critically important tool (which is beyond the control of any one organisation or bureau), the economy must inevitably misallocate resources, make blunders, grow inefficient and inflexible, and ultimately collapse and die.

      The less socialism the better! It is the only way! Come to your sense people and demand nothing less than pure unadulterated laissez-faire free market capitalism. It is ultimately for the benefit of everybody!

    • Shane From Melbourne says:

      01:00am | 01/07/11

      “So any policy that redistributes wealth at the whim of the state fits with socialism”
      Baby Bonus, First Home Buyers Grant and other forms of middle class welfare were all instigated by John Howard, the worst socialist Prime Minister in Australia’s history.

    • Dash says:

      08:35am | 01/07/11

      @Shane - Hi. wow you’re up late. Baby bonus perhaps, helping people acquire and own capital probably not. Let put some perspective around this. None of the LNPs policies you mention, imposed an $11billion cost on the economy and redictributed that wealth on the basis of income!!!! You yourself said on Wednesday that you deplored social engineering and in particular the compensation scheme attached to the Carbon tax. We agree on that one!

      You also need to consider that the Howard LNP government presided of 5 years of PAYG tax cuts for all Australians. And you benefitted from those and from the reduced corporate tax rate as well. I would definately not call him a socialist PM.

    • Dash says:

      08:55am | 01/07/11

      @Richard - Hi - I agree with your sentiment but what I said was: “Most people consider that most economies function best where there is a combination of community and individual liberty in operation”. Most people would argue that we need a safety net to protect the poor and the disadvantaged for example. We need a tax system to provide certain infrustructure that benefits the community as a whole. But most people would also argue that people should have the freedom and liberty afforded them by the operation of a free market. Your comment about the inefficiency of socialism is 100% correct not to mention the fact that it doesn’t work in practice because it relies on the few telling everyone what’s best for them.

      But I would argue, you must have a sense of community goodwill and you must protect people who are disadvantaged. As I said in my post, most of the political argument in Australia is about what is the right blend.

      At the moment we do have the most socialist government in my living memory. This is not a Hawke/Keating styled ALP by any stretch of the imagination and Gillard has serious Socialist history right up until 2002 as you say.

      I definately consider myself an economic liberal. One I hope has a good view of social and community responsibility. I’m sure there are those on here who would disagree. i believe this country has afforded people the opportunity to make a life for themselves, to strive to work for a better life for themselves and their families and to benefit from the wealth they create through that hard work. I am ashamed when I see a government who penalises people for no reason other than financial success.

      We have a government who is burdening the economy with an $11billion cost and looking to redistribute that as it deems appropriate. that is clearly socialism no matter how you look at it. It sends the wrong signals, it penalises the wealth creators and rewards the wealth destroyers. That in economic terms is complete madness! If you want your tax, have it but get rid of the stupid socialist “compensation” crap that goes along with it!

    • David of the Grand Academy of Adelagado. says:

      10:54am | 30/06/11

      markus says… “@David of the Grand Academy, KH was not incorrect, you’ve just misunderstood her statement…. There isn’t exactly a government equivalent of an apprenticeship or a fast food chain.

      Of course there is! Spraying weeds or mowing lawns is not high tech. Answering phones is not difficult. Photocopying is not physically demanding. But all these pretty menial jobs that are the equivalent of your examples pay very well in the PS. (i.e. Federal, State and Local govt.) Apprentices and fast food workers could teach most puclic servants what work really means.

    • Zaf says:

      10:58am | 30/06/11

      “But it is the Greek government that has done this, not the Greek people. We are angry at our government for this, but why should we be punished?”

      Um…because you kept voting for them?

    • Pete #205 says:

      01:10pm | 30/06/11

      Go have a look at the political party in power in Greece over the last twenty years.  There has been steady to and fro between the conservative ND and the socialist PASOK.  The third option is the full-on communist KKK.  So no, they didn’t keep voting for them, they just didn’t bother to pay taxes and make a stand against ingrained corruption and nepotism, which, from my angle, is an uber-extention of historically tight family unit (just a theory).  They also like to have a good time, which uses a lot of money. 

      On the up side, the younger “people on the ground” know there is an issue with nepotism and taxes etc. and know it’s not the way forward.

    • Zaf says:

      01:40pm | 30/06/11

      Hi Pete - the point is they kept voting for two parties that were both complicit in corrupt behaviour and (??) incompetent adminsitration.  There was no great appetite for an alternative, or the demand would have resulted in such a party being formed and elected to power.

      The super-tight family unit connection to corruption/nepotism is an interesting take, though I’d throw in that perhaps a situation of corruption and nepotism encourage super-tight family bonds because…you really need each other since the system does not work.

      And anyway - decades of maladministration and sloppy accounting may be responsible for many of Greece’s woes, but I really think a big slice of blame should go to Greece joining the Eurozone, and forcing itself to have a currency whose strength was dictated by the German economy rather than its own economy. 

      A floating drachma that could find its natural level would be a huge economic advantage for Greece at this point.

    • Pete #205 says:

      02:44pm | 30/06/11

      I do see your point, but it is a two-party system like ours.  I couldn’t see a truly successful third party rising in Australia as options to Labor or Liberal.  I’m a bit of cynic though.

      I’m in two minds about either sticking the boot in or defending “my own people”.  They aren’t completely oblivious that what’s happening and the true underlying causes, but even in these extreme economic times they still go out and blow $30 on a tray of used flower petals to throw on a famous singer.  Sure, they do it less than they used to, but still.  As a guest, I couldn’t well ask my cousins “What the hell are you people doing?!”

      My theory about the tight knit family bonds comes from my own family, who left Greece in the late ‘60s.  So if the nepotism is the cause of the family bonds as you say, then you can imagine that it has been engrained for a very, very long time.  I can agree to that.

      Yes, the problems are associated with joining the Eurozone and most Greeks I know didn’t want it.  But neither did they appreciate (from my point of view) what it has given them.  I’ve been fortunate enough to visit four times in the past ten years and the change in the highway infrastructure, for example, has been amazing and frankly, long overdue.  This has all been Euro funded.

    • Zaf says:

      08:52pm | 30/06/11

      Pete

      It’s arguable that our two party system is doing the same thing but being bailed out by mining revenue.  I think we’re better administered.  The point is, when it came to this, the two parties in Greece acted similarly.

      I think (coming from India) that a dysfunctional system of administration promotes family bonds out of necessity.  Greek family life looks really familiar - it’s not so different from family life in much of the third world, it’s only distinctive when you compare it to Northern Europe (and the US and Canada and Australia - countries where the system more or less works.)

      Wrt Eurozone and Solidarity Funding, I agree that Greece benefitted hugely from Solidarity Funds, but it didn’t need to be in the Eurozone to receive those (the UK gets money back and it’s not in the Eurozone), and being in the Eurozone kept the country from taking advantages of the advantages being in the EU brought.  jmho, and of course hindsight is always 20:20.

      What I think will be interesting is whether Turkey draws any conclusions about the EU and the Euro from this debacle.

    • Travis Gilbert says:

      11:15am | 30/06/11

      Australia does have a debt problem… Household debt. How many people posting here only owe 6% of what they earn? If you owe more than 6% then your debt is much greater than Australia’s so how about you look at your own economic management? The neo-liberal view that debt is a penultimate evil when it is incurred by Government is laughable given that your preferred laissez-faire economy relies on massive private debt in the form of “credit” to contunue “growing” in order to sustain itself.

    • Brendan says:

      11:42am | 30/06/11

      6% of what? My yearly income?
      FWIW, i have no credit card debt, no personal loans and no car loans. I have a mortgage but i am assuming you aren’t including that.
      Several years ago this was very unusual in Australia but I think you will find the latest stats see a shift back to saving and paying off debt.

    • Markus says:

      11:52am | 30/06/11

      Quit pointing out the elephant in the room.
      You are right though. The debt in this country has not been reduced in any way, just palmed off by the government onto the public.

      From the ABS website:
      “Based on information from the Reserve Bank of Australia, over the last 18 years the total amount of debt owed by Australian households rose almost six-fold. At September 1990 the level of household debt was almost $190 billion, increasing to around $1.1 trillion by September 2008 in real terms (i.e. adjusted to remove the effect of inflation).”

    • Markus says:

      12:00pm | 30/06/11

      “I have a mortgage but i am assuming you aren’t including that.”
      Is it a debt? That belongs to you personally? Not sure why you think it wouldn’t be included.

    • Richard says:

      12:15pm | 30/06/11

      No, my preferred laissez-faire economy does NOT rely on massive private debt to continue growing. You need to bone up on Austrian economics Travis Gilbert. May I suggest this children’s book as an appropriate starting place for your current level of understanding: http://www.youtube.com/watch?v=bFxvy9XyUtg

    • Ben81 says:

      01:42pm | 30/06/11

      I don’t even owe 1 cent to anyone, thanks for making me feel like a good ‘economic manager’ :D

    • Brendan the replier says:

      01:58pm | 30/06/11

      Markus, I was thinking Travis meant personal debt such as credit cards, store finance and personal loans. To include mortgages would basically mean no Australian would fall under 6% because even through u may rent you would still be in a contract with someone to pay them money. Whether you rent or have a mortgage there wouldn’t be many ppl that spend 6% or less on shelter. Therefore the argument becomes a little absurd.

    • St. Michael says:

      12:00am | 02/07/11

      “Australia does have a debt problem… Household debt. How many people posting here only owe 6% of what they earn? If you owe more than 6% then your debt is much greater than Australia’s so how about you look at your own economic management?”

      Ah, the classic debt-to-GDP ratio.

      Here’s the problem with that: GDP does not measure how much Australia actually earns.  Australia, as a country, earns the amount of money it collects in Federal tax per year.  This is roughly 246-265 billion per year, on ABS statistics.

      Our debt is closing on 200 billion and projected to increase to close on 250 billion or so once the carbon tax and NBN are through.  That debt is payable back to bondholders, and in theory can be called in immediately if the bond market had a sudden run on it—which it can.  It’s as volatile as the share market.

      Debt to GDP statisticians are classic straw men on this one.  It’s because when people talk about debt, they’re usually thinking about the debt which has to be paid off in 30 years and generally can’t be called in in full unless you do something colossally stupid and don’t pay it for a few months.  That is relatively low risk to you.

      The bond market debt, by comparison, is a debt parts of which have to be paid off at different points, and which in theory is callable in any time there’s a run on the dollar.

      Put it this way: how scared would you be if the only reason you stay in your house is because nobody’s called in your line of credit, which is so large that in order to pay it when called you would have to dispose of every other expense you had?

      In short, Australia’s line of credit at the moment is closing on the total amount that Australia earns in tax every year.  You should be scared we have a low debt-to-GDP ratio.  It means there’s roughly 80% of the country the government can take in tax to pay for profligate spending.

    • Sylvie says:

      08:25pm | 02/07/11

      @St. Michael
      This is good.
      Just one thing -  that “colossally”  -  it doesn’t make an impressive adverb.  Too clunky. 
      Other than that -  really good!

    • lesley laurel says:

      11:29am | 30/06/11

      australia was hungary so it ate a bit of turkey dipped in greece.

    • James In Footscray says:

      11:34am | 30/06/11

      I demand more puns in punch headlines like ‘greeced’.

    • Brendan says:

      11:35am | 30/06/11

      Several years ago my wife and I expanded and relocated our business. Soon after embarking on this challenge we had a massive down turn in trade due to some unlucky circumstances. There didn’t look like there was any way out. We had massively underestimated how much the process would cost.
      I ended up falling on my sword in front of our new landlord begging that they roll the building renovation costs (a big chunk of our expenses) in to the rent.
      He came back with a polite “no”. I was amazed that after everything I said regarding our being on the verge of bankruptcy, he didn’t seem to care.

      Looking back, I now understand the wisdom in our landlord’s decision. He knew he would lose out if we went bankrupt but he also understood the unknown possibilities of our ability to pay the increased rent and possibly asking for more favors in the future - and maybe still going bankrupt. 

      The EU should show this kind of leadership. There’s just too many “unknowns” to allow Greece to keep borrowing money and it’s not the job of the EU or IMF to micro-manage Greece.

      The fear of flow-on effects should not drive the decision making process. The flow-on effects will only be worse by lending more money. Certainly lend them all the help possible when it comes to brainpower but it should stop there.
      Several years on, we managed to scrape through - but i doubt Greece can.

    • Aussie Wazza says:

      11:54am | 30/06/11

      Somewhere, way at the top there was a mention of Greece.

      Seems like a Chinese whisper.

      Old WW1 example:-

      Message sent ’ Send reinforcements, we are going to advance’.

      Message received ‘Send three and four pence, we are going to a dance’.

      Every day in every way, no matter what the subject, it gets turned around to Aust politics.

      Get on with the subject at hand for a change.

      My start: ‘I like baklava’.

      There. See how easy it is?

    • OMG says:

      12:20pm | 30/06/11

      Socialists always eventually run out of other people’s money to spend.

    • Chas says:

      12:52pm | 30/06/11

      This crisis is self inflicted due to the overpayment of Government workers, a massive pension system and the inability of the country and its people to work efficiently. There is very little hope that Greece will repay anything, it’s in their DNA.

    • Nick42 says:

      02:37pm | 30/06/11

      OMG yes just like the Americans almost did under Reagan and Bush jr those dodgy socialists over there. I think you will find it is any type of government, left or right or somewhere in between that wastes money. People tend not to care when isn’t theirs - like politicians of all stripes

    • Sylvie says:

      03:55pm | 30/06/11

      @Chas
      “...........little hope Greece will repay anything, it’s in their DNA”.  I keep hearing that.

    • Max Kidder says:

      12:51pm | 30/06/11

      Eric is right.

      To all the socialist, you want other people’s hard earned cash and you believe you somehow have a right to take it.

      Theft is not moral even if acted by the majority.

      Socialism is a disgusting, backward, sick ideology that takes from those that work the hardest and destroys productivity and responsibility.

      Individual rights are absolute.

      Every single right to your body, income, efforts and talents that are taken are a form of unethical slavery.

      Socialism is sick and perverse and Greece caught the illness and now look.

      Australia can not afford to enforce more policies that usurp from the hard worker and line the pockets of those who do no PRODUCE or everybody loses.

      Socialism = Cancer

    • Kevin says:

      01:12pm | 30/06/11

      Yes, it was the ruin of China.

    • St. Michael says:

      03:25pm | 30/06/11

      Go and ask China’s government what their real inflation rates are, what rates they force banks to pay on savings accounts, and why they’re embracing capitalism all round before deciding whether communism/socialism ruined the country or not.

    • James says:

      04:44pm | 30/06/11

      Cancer: a cluster of cells with genetic programming for infinite growth in a confined system (Living body).  Actually that is an almost perfect definition of capitalism.

    • Erick says:

      05:00pm | 30/06/11

      @James - Actually that’s a definition of “life”.

    • St. Michael says:

      05:22pm | 30/06/11

      @ James: not quite, because not even the most fervent free market economists ever believed in continual grwoth.  You need to stop singing from the Malthus songbook, it’s been a good hundred years or so now.

    • James says:

      08:08pm | 30/06/11

      Erick how many people do you know who have grown infinitely?  St Michael try telling that to the stock market.

    • St. Michael says:

      10:26pm | 30/06/11

      Capitalism =/= the stock market, any more than the TAB does.  This is where most people fail at economics.

    • James says:

      09:56am | 01/07/11

      Whether you like it or not modern capitalism and the stock market are fused, how exactly do you “efficiently invest surplus capital” without a stock market?

      How well do you think a private enterprise would go if it didn’t grow?  What would it’s stock price be like compared to one showing “record growth”?

    • James says:

      10:25am | 01/07/11

      Btw what killed China was authoritarian dictatorship, not the same thing as socialism, Sweden is a better example of a socialist country than China ever was.

    • St. Michael says:

      11:17am | 01/07/11

      @ James: Your error is that all private enterprises are listed on the stock market.  And whether you like it or not, capitalism is not the same as the stock market, no matter how loud you shout it.  Capital does not have to go to the stock market.  Warren Buffet himself is a value investor who usually buys enough shares to control a company, and thereby become the owner of a business.  He is not a stupid stock speculator like 99% of the people throwing their money at various entries on the ASX.  He has also said repeatedly that Berkshire Hathaway’s shares are tremendously overvalued.

      Record growth in a company is usually the product of lies on its balance sheet to attract people with more money than brains, not solid fundamentals.

      Grow up.

    • jf says:

      01:27pm | 01/07/11

      James says:

      10:25am | 01/07/11

      “Btw what killed China was authoritarian dictatorship, not the same thing as socialism, Sweden is a better example of a socialist country than China ever was.”

      Sweden is in fact a constitutional monarchy with a parliamentary democracy. It also has a stock exchange which automatically, by your own definition, makes it a capitalist society. However, as your definition is moronic, I will extrapolate.

      Whilst capitalism is not a stock market, a stock market is an important feature of a capitalist economy. A stock market facilitates the efficient exchange of capital from those that wish to invest to those that require capital. The capital exchanged on any stock market is typically to fund development, research and other costs of productivity, innovation and output.

      As you yourself said “how exactly do you “efficiently invest surplus capital” without a stock market?” Now leaving aside that the stock market is not the only way to transfer capital, I agree that it is an efficient way of doing so.

      However, I am confused by you: do you think that the stock market and/or capitalism is a bad thing. You seem to be making some favourable (albeit unformed) comments about the stock market and capitalism : “efficiently invest surplus capital”; “ow well do you think a private enterprise would go if it didn’t grow?”.  On the other hand
      Whether you measure growth by the growth of public companies (the stock market) or unlisted, capitalist economies have grown strongly and consistently through the centuries. That you choose to measure the success of capitalism based on a time-frame constructed by you says more about your lack of logical and factual criticism of capitalism than it does about capitalism.

      However, speaking of own goals; Sweden’s prosperity is only a recent phenomenon and has happened following policy reform in which they reduced welfare spending and privatised public services.

      What killed China was an authoritarian dictatorship. However, as an authoritarian dictatorship is a necessary requirement of socialism, it is not unreasonable to say that socialism is what killed China: as it did Cuba, Russia, Germany, North Korea, Vietnam, Cambodia, most of Eastern Europe, large swathes of Africa.

      Happily, many of these countries are now embracing democracy and capitalism and reveling in increased prosperity, personal freedom and the quality of life that both bring.

    • James says:

      02:20pm | 01/07/11

      St M & jf you both have a very simplistic view of the world which leads you to some pretty odd conclusions for example.  If a stock market is an “important feature” of capitalism how is it separate, it is like saying kidneys are an important part of a human, but you don’t really need them.

      Current capitalism requires infinite growth to service the debt that it has created to grow, you can’t say that what we have is deviant capitalism it is like the people who say “in theory communism works” in practice it doesn’t and nor does capitalism becasue of the requirement for infinite growth on a finite planet is mathematically impossible.

      Private corporation have only the profit motive driving them and can be thought of as having a psychopathic personality, that is, they will do whatever it takes to make profit regardless of the consequences therefore they will ignore or externalise things like environmental or social damage even to the point that the damage is uneconomic.

      As we have seen with the carbon tax they will fight tooth and nail to keep their damage “off balance sheet” to the point they are actually more concerned with short term profit than the viability of the planet that supports them, hence their MO is again that of a fatal cancer.

    • jf says:

      04:54pm | 01/07/11

      James says: 02:20pm | 01/07/11

      “St M & jf you both have a very simplistic view of the world which leads you to some pretty odd conclusions for example.  If a stock market is an “important feature” of capitalism how is it separate”

      Where did I say that the stock market was separate from capitalism? I guess in the absence of being able to point out flaws in my post you must construct some in order to substantiate your argument.

      “requirement for infinite growth on a finite planet is mathematically impossible.”

      Is it? As you say that it is mathematically possible, I assume that you will be able to direct me towards your proof. Alternatively, I would point out that economic and growth has grown year in year out for millenium. Perhaps your mathematical formula will point out at what point in the future human development and growth will cease.

      “Private corporation have only the profit motive driving them and can be thought of as having a psychopathic personality”

      I disagree.

      “that is, they will do whatever it takes to make profit regardless of the consequences therefore they will ignore or externalise things like environmental or social damage even to the point that the damage is uneconomic.”

      I disagree.

      “As we have seen with the carbon tax they will fight tooth and nail to keep their damage “off balance sheet” to the point they are actually more concerned with short term profit than the viability of the planet that supports them, hence their MO is again that of a fatal cancer.”

      Does it not occur to you that those who believe a carbon tax is necessary may be wrong and that those that don’t believe it is necessary will save a lot of people (predominantly poor) untold deprivation and misery? Maybe it is those companies that hold the high moral ground and those in the environmental industy who stand to benefit that are the moral cowards and leaches.

      Alternatively, what about all those companies that support a carbon tax? All those companies that supported the tax in both the previous forms proposed and that would have been now in force had it not been for the destructive behaviour of the Greens.

    • James says:

      07:16pm | 01/07/11

      Companies support a carbon tax as long as it is their competitors paying not them.

      Saying “I disagree” isn’t really a counter arguement.

      Economic growth will stop when it collides with a physical limit like peak fresh water, peak oil, peak bio-production.  People will learn in short order that physical limits trumph ideology every time.

      One example of how infinite growth in the current model is impossible.  GDP growth is 95% correlated with oil consumption, therefore economic growth is only possible with increased oil consumption, oil production is at or near maximum capacity so not only will economic growth be impossible, contraction will be impossible to stop.

    • St. Michael says:

      11:51pm | 01/07/11

      “Current capitalism requires infinite growth to service the debt that it has created to grow, you can’t say that what we have is deviant capitalism it is like the people who say “in theory communism works” in practice it doesn’t and nor does capitalism becasue of the requirement for infinite growth on a finite planet is mathematically impossible.”

      Um, nooooo.  Capitalism rests on profit, not debt.  That’s socialism’s thing.  Capitalism requires the investment of capital, i.e. money, *one* of the sources of which is debt.  But capital does not come only from debt.  You thinking that all capital comes from the debt is the classic hidebound thinking of a socialist, because it then allows you to justify massive government debt by saying “Ya gotta spend to make money!”

      It doesn’t work like that.  Capitalism functions on incentivisation of money.  Money functions solely, and only, on trust.  When people do not trust a unit of currency, they try to ditch it in favour of something thought to have some intrinsic value—thus, idiots buying up gold like there’s no tomorrow.

      Capitalism also functions, to a large extent, on trust—trust that when a contract or an agreement is made, both parties will fulfil their ends of the bargain or can be held to it by the rule of law.

      Infinite debt cannot be paid back.  It is therefore destructive of trust, and therefore destructive of capitalism.

      “Economic growth will stop when it collides with a physical limit like peak fresh water, peak oil, peak bio-production.  People will learn in short order that physical limits trumph ideology every time.”

      Right out of Reverend Malthus’s songbook.  Has the last hundred years of growth not taught you something about that theory?

      “One example of how infinite growth in the current model is impossible.  GDP growth is 95% correlated with oil consumption, therefore economic growth is only possible with increased oil consumption, oil production is at or near maximum capacity so not only will economic growth be impossible, contraction will be impossible to stop.”

      This is another straw man.

      Economic growth does not rise or fall on peak oil (apologies, Harqebus, if you’re reading this).  In the present day, it rises or falls on the stupidity of America to have spent up its debt so high it cannot repay it.  Money rests solely on confidence in the government that is backing the dollar; surely you’d realise since Bretton Woods and later no currency on the planet is still backed by gold.  You also failed your own logic: you said economic growth is not entirely controlled by oil production, but then say that economic growth is impossible without oil production.

      As for sneering at “simplistic” ideas of how the world works: supply and demand are simple theories.  So’s William of Ockham’s razor.

    • St. Michael says:

      12:01am | 02/07/11

      Also:

      “Private corporation have only the profit motive driving them and can be thought of as having a psychopathic personality, that is, they will do whatever it takes to make profit regardless of the consequences therefore they will ignore or externalise things like environmental or social damage even to the point that the damage is uneconomic.”

      Y’know, if you want to criticise the concept of the corportaion and what it stands for, you should really stop quoting verbatim from “documentaries” like The Corporation.

    • James says:

      03:41pm | 02/07/11

      St Michael, your arguements are very weak as actual events have demonstrated the opposite to what you claim.

      Unless you are talking about middle ages style farming capitalism, real capitalism, market capitalism requires debt to function.  If it didn’t why was lack of bank lending a problem during the GFC?  The sort of slow growth capitalism you seem to think exists is all very well in theory but please point me to a part of the world where it exists.

      Malthus could never have known about oil, but if he did and factored oil into his calculation he would have been horrified because it will only make the crash bigger.

      Explain to me how oil will not run out or peak in production?

      Also explain to me how corporations are not pathalogical?

      There probably is a mix of capitalism crossed with all the other isms out there that will work brilliantly but you have to admit that ain’t what we got now and it has set us up for a very big fall.

    • St. Michael says:

      10:07pm | 02/07/11

      “St Michael, your arguements are very weak as actual events have demonstrated the opposite to what you claim.”

      You’ve yet to supply an actual event that demonstrates the opposite when you think it through to its root causes.  Please do so.

      “Explain to me how oil will not run out or peak in production?”

      Simple.  First, peak oil isn’t demonstrated on the facts, most notably that it’s been predicted as having passed in each of the past twenty or so years—following which an additional massive reserve is found.

      Second, oil is subject to supply and demand like all commodities.  In commodities, cheapest price wins until an even cheaper alternative comes along.  It’s only branded products where you’re buying anything other than the price.  The point being, though, that when the free market’s tolerance for oil prices is exceeded, that same free market will find an alternative—particularly now when the free market thanks to the Internet covers the entire planet (well, at least until the G8—which is a *government* organisation—figures out how to retard it.)

      That alternative will then dominate to such a point that oil production will, of course, peak, and then decline—but not because there’s less oil, but rather because the efficiency of the alternative will outweight the cost of getting more oil.  It might not be terribly efficient to start with—but you find me a socialist, communist, or totalitarian regime that’s any more efficient without having to apply thumbscrews or financial repression against its own people to achieve a comparable result anywhere.

      “Also explain to me how corporations are not pathological?”

      Because a corporation is not a sentient being.  It is a legal construct which allows the limitation of liability to those investing money in it.  That’s all.  Corporations can’t act on their own.  They require people to operate them.  People break the law, falsify documents, lie to their shareholders—not corporations.  I warned you already about quoting verbatim from The Corporation.

      Although, again, you are straw manning since, as with the stock market, corporations =/= capitalism.  On the other hand, again, show me a financial system which led to any widespread prosperity without corporations to back it monetarily.  (To answer “communism” will not earn you any bonus points, as I’m sure you know.)

      “Unless you are talking about middle ages style farming capitalism, real capitalism, market capitalism requires debt to function.”

      Which of those three nebulous terms are you actually relying on for your proposition?

      “There probably is a mix of capitalism crossed with all the other isms out there that will work brilliantly but you have to admit that ain’t what we got now and it has set us up for a very big fall.”

      If there’s a degree of socialism which can be mixed with capitalism, it’s probably in a government that can only build or spend out of what it can tax—no loans.  Beyond that, socialism can exist only as a parasite on capitalism—it has no other source of funding.

      However: saying it’s rampant capitalism to blame for the world’s liquidity problem is shielding those really responsible.  To a large extent, the main reason the planet’s financial systems are in jeopardy is because of *sovereign* debt.  As in, *government* debt.  As in, *governments* spending way above their capacity to tax their own people—not the private sector.

      In a capitalist model, not one bank imperilled by the GFC should have been bailed out—not one.  It is only socialist sensibilities, and cowardly politicians, that cause entire countries to pay (via tax) for the malfeasances of a few in the private sector, and all it ultimately does is make the descent longer, and not any softer.

      Governments, in short, need to follow the capitalist model if they don’t want to get into sovereign debt problems.  To follow the capitalist model, they need as far as possible to get out of the way of business, and in particular small business.  Please do not now go to the tired “oooh, you’re against regulation” argument.  I’m against *over*regulation, which is as much responsible for the present state of affairs as *under*regulation.

    • James says:

      10:12am | 03/07/11

      st Michael.

      The discovery of oil reserves peaked in 1965, American production was predicted to peak in 1970 and it did.  Name the last big reserve that was found and the size of the reserve in relation to the Ghwar field (i work in the energy industry so I find your claims quite odd).

      Here is a good summary of the oil situation.
      http://www.theage.com.au/tv/show/crude/crude-20100814-124bj.html

      You have a very simplistic view of the world re capitalism and socialism both isms on their own do not constitute a valid system.

      You could argue that capitalism with its large concentration of wealth encourages parasites i.e. board members who take a salary without really working, children who inherit great wealth and do not work.  Equally you could say the lazy public sector works who recieve money for no reason are parasites.  The comon theme there is actually corruption no intrinsic parasitism.  Are you seriously suggesting that soldiers, social workers, nurses, doctors in the public sector are parasites?

      You talk of the incentives of capitalism leading to more motivated workers, how do you explain volunteers then?

      The modern corporation was set up as a legal person so that it can utilise citizens rights however this citizen has been diagnosed by psychologists as a sociopath, are you a psychologies too now?

    • St. Michael says:

      01:18pm | 03/07/11

      Repeating the same accusations does not make your argument any bigger.

      Neither does straw manning.

      As for “work in the energy industry”, well, unless you can come up with some verifiable information other than one website, I’ll presume by “working in the energy industry” you’re tending fuel bowsers.

      “You could argue that capitalism with its large concentration of wealth encourages parasites i.e. board members who take a salary without really working, children who inherit great wealth and do not work.”

      No, in fact, you can’t.
      (a) You are forgetting the reflection of risk involved in the profit take of the owner of a business.
      (b) Inheritance is a product of medieval times, not an application of capitalism.
      (c) Capitalism does not cause overblown salaries.  Stupid shareholders who allow a board member to be paid on anything bar performance above the average of the market do that.  All large organisations are de facto dishonest, whether in the public or private sector, but that fact does not mean capitalism is any less valid nor communism or socialsim any better a system.

      “Equally you could say the lazy public sector works who recieve money for no reason are parasites.  The comon theme there is actually corruption no intrinsic parasitism.  Are you seriously suggesting that soldiers, social workers, nurses, doctors in the public sector are parasites?”

      Like I said, you are straw manning and getting well away from capitalism as a concept.  In particular you are trying to draw me into criticising so-called “public purpose” professions so you can look better.

      I say anyone who’s not being paid measured on their performance is to some extent morally a parasite on their employer, because they are not being paid for what they actually do.  That it is common does not make it right or moral.  I would say most public sector workers fall under that umbrella because of the way the award system is set up and the fact private sector, not public, uses piece rates for the most part.

      Oh, and as for the “volunteers” remark? Straw man.  Volunteers are incentivised by their own sense of self-esteem, not the profit motive.  That a few old people wanting to get some brownie points with Jesus before going to meet him face to face does not impugn capitalism as a system.  Show me someone who does it full time or who’s qualified professionally—let’s say a doctor, since you went there first—and then does their entire job for no pay.  If you want to find out who is mercenary and who is not, ask people whether they’d do their job, day after day, for no pay at all.  I think you’d find fewer “noble employees” than you think.

      “The modern corporation was set up as a legal person so that it can utilise citizens rights however this citizen has been diagnosed by psychologists as a sociopath, are you a psychologies too now?”

      No.  But seeing as you “work in the energy industry”, I doubt you are a psychologist either and therefore unqualified to draw that (hyperbolic) conclusion.  For the third time: stop quoting verbatim from The Corporation if you want your argument to look bigger.

    • James says:

      04:56pm | 03/07/11

      @St michael.

      You have not answered my question about oil reserve finds, can I take it that you don’t know.

      Your mythical idea of capitalism is as quaint and non existant as the theoretical utopia of communism.  The side effects of real capitalism as it has evolved i.e. in-equality, grossly inflated wages for those at the top, corruption, environmental devestation, radical financial policy are there for all to see.  Capitalists always seem to want to claim the benefits of the scientific revolution as their own i.e. Higher life expectancy, modern technology when really this has much more to do with the publicly funded education system and democracy than capitalism.

      People who are motivated by a desire to help their community are of much more value to society than those purely motivated by personal gain.

      I am anti ideology as both are a refuge of the mediocre.

      As to the diagnosis, I am merely repeating what I have heard from those better qualified than me in the area of psychology as opposed to you who seem to be refuting it without any qualifications.

    • Sylvie says:

      05:10pm | 03/07/11

      St. Michael,  “....your arguments are very weak…”.  The accusation jumped out from the screen.  Poor misguided challenger.

      Your restraint!
      Better and better

    • St. Michael says:

      11:50pm | 03/07/11

      Part One: Just in passing, James, I do appreciate that you’re sticking around past the first page to argue the point.  It’s more than Persephone ever seems to do.

      “You have not answered my question about oil reserve finds, can I take it that you don’t know.”

      It’s not the point.  But in answer, the behaviour of oil prices across the boards says oil isn’t in any risk of running out any time soon.  If it starts to increase rapidly for a lengthy period, there might be a problem with supply.  But as I said: I have no doubt oil production will decline—as alternate sources of fuel and alternate ways of extracting oil from presently unviable methods (shale, for example) are found.  Show me more than one documentary as your evidence that says otherwise.

      “Your mythical idea of capitalism is as quaint and non existant as the theoretical utopia of communism.  The side effects of real capitalism as it has evolved i.e. in-equality, grossly inflated wages for those at the top, corruption, environmental devestation, radical financial policy are there for all to see.”

      I don’t accept you have correctly categorised most of those as the side effect of capitalism.  Most, if not all of them, are equally present in socialist or communist societies.  The only difference is that whilst capitalism does allow people *a* chance, socialism or communism does not since it makes illegal anyone but whoever’s in charge of the “Workers’ Party” as having a chance.  The result is poverty across the board in those communities—because the free market determines where investment and money goes, and it always flows to places which support incentivised profits.  And you also have failed to highlight capitalism’s benefits—the car, the electric globe, the airplane, the railroads, the opening up of the American West, and so forth.  These things would not have been possible under the socialist or communist model, because government is fundamentally incompetent at innovation or running things with a view to making a profit—and in either the socialist or communist model, government is really who calls the shots, not the free market.

      “Capitalists always seem to want to claim the benefits of the scientific revolution as their own i.e. Higher life expectancy, modern technology when really this has much more to do with the publicly funded education system and democracy than capitalism.”

      Capitalists rightly claim those benefits as their own.  The discoveries alone are not enough—there must be capital and investment behind those discoveries to make them viable and, more importantly, available to the public on a wide scale.  For example, someone has to take the risk and the investment of producing vaccines on a wide scale: government can’t, or would do it appallingly bad.  By and large, it is drug companies that do that.

      This is as old as the argument between theoretical physics and applied physics.  Specifically, the former is of interest but no use without the latter, and the latter comes about principally through capitalism.

      Let’s not start about democracy, since there’s a number of different types.  The present one in vogue, representative democracy, can be argued as a serious failure in many Western societies at present, including Australia.  Direct democracy may wind up having to replace it.

      “People who are motivated by a desire to help their community are of much more value to society than those purely motivated by personal gain.”

      You don’t have any mathematical or objective way of assessing this proposition, so that’s a pointless statement.  It is a purely moral proposition, and therefore meaningless.

      But I can disprove it mathematically.  Take the mass-production automobile, for example.  Henry Ford was undoubtedly motivated by profit, but without the profit motive the Model T would not have been built.  More good was done in lives saved just by the existence of the automobile than the combined efforts of every compassionate man who took a horse-driven ambulance that ever took to the roads, for example.

      “I am anti ideology as both are a refuge of the mediocre.”

      All due respect, but at some point you’ll have to face the facts that capitalism might not be a perfect system, but it remains better than any of the others that humanity’s tried over the centuries.  That’s the conclusion that most mature adults have come to on the planet.  Being “anti-ideology”, to me, simply suggests you as being someone who distrusts both the rational and the irrational argument, and seems fearful of taking a position in any direction.  Perfectionists are no more help to the world than rabid zealots, you know.

    • St. Michael says:

      11:52pm | 03/07/11

      Part Two:

      “As to the diagnosis, I am merely repeating what I have heard from those better qualified than me in the area of psychology as opposed to you who seem to be refuting it without any qualifications.”

      Whom you haven’t named, other than presumably those asked to come up with the diagnosis for the purposes of The Corporation.  As it is, I suggest you find some slightly better psychologists.  Most rational professional psychologists confine their expertise to human beings.  They don’t try to diagnose a legal concept with a human ailment.  That is a logical fallacy called anthropomorphification, which means “trying to ascribe human qualities to something that is not human.”  You might as well try and suggest a scorpion has an aggressive personality disorder, or suggest archery can be taught to a rock.  It has nothing to do with it.

      A corporation as a legal concept is not psychotic, because it’s not human.  A corporation can’t love.  But neither can it hate.  Nor can it give birth to children, or ever grow old, or die (although it can, metaphorically, be “killed”.)  It can be bought or sold in a way we would not tolerate were it a human being.  It can’t make a mistake.  It can’t pray, or curse god, or do anything.  Getting the point? Saying a corporation is psychotic is hyperbole, and it’s not intellectually honest to argue it in support of your argument, any more than equating a system of financial order with a biological condition.

    • James says:

      10:26am | 04/07/11

      St Michael, you cannot seriously be suggesting that oil production won’t peak, it is a finite resource being extracted in the real world by humans it is not a magic genie granting us petrol.  I really do urge that you have a closer look at the history of oil field depletion and the concept of energy returned on energy invested.

      I do think that a certain amout of pure capitalism is necessary to any society but to suggest that what we have now (what I would call kleptocapitalism) isn’t responsible for destruction of forests, weakening of environmental regulations, pollution and over consumption is just denying reality.

      You are right to suggest the USSR had the same problems, however I don’t think it was socialism that was the main problem, it was lack of democracy that meant that political hacks were dictating policy in what should have been a scientific matters i.e. environmental regulation.

      You simply cannot claim that capitalism is responsible for the benefits of the scientific revolution because, for all the vileness of the USSR, it did produce a staggering number of inventions . i.e. the satellite, the military robot, unterwater welding, carbon nano tubes, the fusion reactor, mobile phone, hall effect thruster etc

      As to your statement that most rational psychologists ... you can’t say that unless you can demonstrate that you have at least asked a representitive sample of them.  So i’m not sure your other statements can be supported.

      Btw do you think you could keep your posts a bit more concise.

    • St. Michael says:

      11:11am | 04/07/11

      “Btw do you think you could keep your posts a bit more concise.”

      Regrettably, no.  I wouldn’t want to be accused of being simplistic.

      “St Michael, you cannot seriously be suggesting that oil production won’t peak, it is a finite resource being extracted in the real world by humans it is not a magic genie granting us petrol.  I really do urge that you have a closer look at the history of oil field depletion and the concept of energy returned on energy invested.”

      For the third time: I did not say oil production would not peak.  As I said, it would peak when a viable and cheaper alternative is found.  I don’t see any evidence that the physical capacity of the planet’s oil has been reached—particularly given, as I said, and which I found interesting you didn’t comment on it since you’re in the energy industry, shale oil.

      “As to your statement that most rational psychologists ... you can’t say that unless you can demonstrate that you have at least asked a representitive sample of them.  So i’m not sure your other statements can be supported.”

      Neither have you from what I can see.  But the field of psychology is one that covers the *human* psyche, or even the psyche of a *living* creature.  A corporation is neither.  Thus, attempting to “diagnose” a corporation is just hyperbole, and can be dismissed as such.

    • James says:

      12:43pm | 04/07/11

      @St Michael,

      You might, on the other hand, be accused of being overly wordy also not good.

      You seem to be a bit ill informed about the oil situation and the difficulties in extracting oil from tar sands etc.  The energy returned on energy invested is under 10 to 1 for Tar sands as opposed to 100 to 1 for oil at the start of the age of oil.  This has major implications for the world economy, the very fact tar sands are being considered indicates the state of desperation in the oil industry.

      Don’t forget, the IEA predicted oil only rising to $39 per bbl in 2030, this should give you and idea of the scale of the miscalculation that has been made.

      A psychologist can analyse the behaviour of a body of people and draw parallels to individual psychology in fact there is a whole area of psychology that studies this, organisational psychology.  The word corporation should give you a hint as to what the concept of a corporation is meant to achieve.  A corporation can be said to have a pathological personality, this is not really difficult to see if you are capable of understanding psychology.

    • St. Michael says:

      02:17pm | 04/07/11

      *shrug* So the IEA projected wrong.  People thought we’d be in flying cars and living on the moon by now.  Malthus thought we’d have run out of critical resources by now, too.  That doesn’t advance your argument or create causality where there’s only weak correlation at best.

      “A psychologist can analyse the behaviour of a body of people and draw parallels to individual psychology in fact there is a whole area of psychology that studies this, organisational psychology.  The word corporation should give you a hint as to what the concept of a corporation is meant to achieve.  A corporation can be said to have a pathological personality, this is not really difficult to see if you are capable of understanding psychology.”

      The error in your reasoning, again, is that a corporation *is not a living being* to which a psychology can be attributed.  The comparison is therefore at best metaphorical and at worst hyperbolic, not accurate or logical.  Organisational psychology is still studying the behaviour of numbers of sentient (if not sapient) organisms—not the behaviour of legal constructs.  You will probably next go to the tired old aphorism “If it walks like a duck, quacks like a duck”.  That comparison is not apparent.  Subjecting “the corporation” to organisational psychology is like saying “If my sock puppet looks like a duck, and I make noises approximating a duck, it must be a biological duck that will fly, eat, and shit as all ducks do.”  It is like saying a gun is homicidal because its design, purpose, and function is to kill people.

      The name “corporation” does not assist your argument either by intent or fact.  It’s merely a name.  What’s in a name? But let’s advance the silliness one step further: the term “corporation” is derived from corpus—a body.  A dead body, as opposed to the mens—or mind, or spirit—which inhabits it.  Not a living being.  Dr. Manhattan rebuilding himself after intrinsic field extraction has more in common with sentient beings than a corporation ever could.

      “You might, on the other hand, be accused of being overly wordy also not good.”

      “Overly wordy” is usually how the ignorant or the fraudulent like to describe “thorough” or “trying to make their audience understand an unfamiliar concept.”

    • Harquebus says:

      02:36pm | 04/07/11

      @St. Michael. Profit needed to service debt. True. The U.S. reached its peak oil production in the early 70’s. Profit, or economic growth, there has since been fueled by debt. Energy makes money, not the other way around. The U.S. can print all it likes, it is not going to produce manna from heaven.

    • James says:

      03:47pm | 04/07/11

      @St Michael, I find it interesting that you don’t find a 60+ dollar per bbl error significant given how closely linked oil consumption and GDP growth are.  Remember the sub $39 per bbl assumption is in every stock market price and every government infrastructure plan in the world, I think you underestimate this as a problem.

      Incorporated means united into one body, the corporation is a gestalt entity that acts according to a pathological desire to maximise profits much as a drug addict persues a high regardless of the cost or a sociopath persues personal gain regardless of the cost.  If this were not true you would not have Goldman sachs taking out bets against products they advised their clients to buy.

    • John says:

      12:54pm | 30/06/11

      Come on! It’s just not socialist hands outs, it’s international bankers wanting to make their instant noodle credit, it’s corrupt Greece politicians pocketing the wealth while leaving the bill to Greek populations. Thats what this is all about. Why is that bankers can keep their instant noodle credit? the greek politicians can keep their mansions and boats, while the Greeks foot the bill! Then again thats what capitalism is all about, exploit, loot and run. The international bankers do it nations, rather then individuals! There is more profit looting nations then there is individuals.

    • hot tub political machine says:

      01:37pm | 30/06/11

      I think I’ve said it before, if the rich get much more rich than the poor - crime increases. Anywhere in the world you have great wealth disparity you have high crime.

      When you have enforced austerity while the wealthy get even wealthier - its French revolution time. How many decades do you think we are away from politicians literally losing their heads?

    • Ian1 says:

      01:46pm | 30/06/11

      I have no idea who is pulling the strings, and have not researched this topic sufficiently to have an informed view.  What I can say though, is that if the financial problems of the EU are anything to go by, we should hesitate to globalise or sign further world-binding agreements.  I think it would be far better to remain independant and have our sovereignty assured.  Australia should only look to unification with NZ and PNG….  and maybe Nairu?

    • St. Michael says:

      05:34pm | 30/06/11

      Globalisation is not the problem.  Turning yourself into a common currency collective—which is a communist, er, socialist concept—is.  As the EU is finding out.

      See, the main reason Germany is so pissed off is because whilst Germany was a responsible economic manager and did nothing economically wrong, it is now going to have to help bailing out a fellow EU country with a tiny economy with a disproportionate impact on the EU’s bank balances—because it was spending like a drunken sailor.  You don’t need a big economy to smash the hell out of the world’s financial system; all you need is to run up enough government debt without anybody noticing, and the whole planet takes the hit with you.  That does not depend on globalisation.

      Still want us to unify with New Zealand or Papua New Guinea?

    • John says:

      12:52pm | 06/01/12

      The way i looked at it.

      1. EU zone only benefit the Germany and France as they out compete the smaller EU nations, this results in smaller EU nations that can’t compete to be out of jobs.

      2. The smaller nations who have no job’s, then borrow from the international banking cartel in order to keep on purchasing french and German goods.

      St. Michael

      Globalization and International Bankers are the problem. These guys only care about self interests at expense of nations.
      The so called prosperity you talk about is all an illusion. It’s seems like globalization works, but if you look at the debt figures, of nations producing 1 dollar and borrowing 5 dollars a year. You can clearly see that effect of that 4 dollars.

      The last 30 years of western prosperity has simply been turning blind eye to debt. So is going to take loss’s and i don’t think it’s going be the guilty parties, it’s going to be the common man.
      Watch the international banking cartel say, Germany, Italy, UK, Portugal you owe me 100 trillion, yeah the money i just printed via my color laser printer. This is insanity.

      Why do country’s allow international banks to print money? When they can do it themselves without incurring debt? Nations can forgive debt, but the International Banking Cartel won’t. I say cut ties with international Banking cartel. Start printing our own money.

      This is literally national rape, I say Greeks just topple you government get out of the EU and bring in a nationalist government to deal with international leeches.

    • Travis says:

      02:37pm | 30/06/11

      All the intellectually challenged punters that think the US is going to default on loans some time in the next ten years are dumber than they look. Greek debt is around 160 times GDP. American debt is roughly 1 years GDP. The situations are so different between the two that they don’t bare comparrison. in addition the US debt held by China etc is in US dollars so they don’t need to default, they can instead trash their currency by issuing more bonds and pay back the loads with a devalued dollar.

      To all the hard core capitalists out there like Max Kidder, i wonder how you’d feel if the Australian Government hadn’t garuenteed your bank deposits during the GFC…? Or how you’d feel if we took away your Medicare? Or how you’d feel about no HECS for tertiary education for you and your kids…?

      Greece is in trouble because of corruption and poor economic management, not socialism. If the problem were left leaning european governments then why do Sweden, Norway and Switzerland have such good standards of living, low crime rates and unemployment? I suggest you get an education in economics 101 before embarresing yourselves by exposing a clear lack of understanding and knowledge.

    • St. Michael says:

      03:15pm | 30/06/11

      “in addition the US debt held by China etc is in US dollars so they don’t need to default, they can instead trash their currency by issuing more bonds and pay back the loads with a devalued dollar.”

      You understand what the word “hyperinflation” means, don’t you?

      No?

      Do some reading about Weimar Germany, or Zimbabwe just for the shiggles, and see what happens when a country trashes its own economy by buying back its own bonds and printing money as it does so.  Now apply that to the entire planet’s financial system as the US dollar is the world’s reserve currency.

      The US doesn’t have to default on its debt to fuck over the planet.  If it pays it off by devaluing, or debasing, the currency, it’s equally devastating, although perhaps slightly less devastating, than a worldwide Depression.

      Debt to GDP ratio is bulltwang.  On the EU’s own rules, in purely economic terms, if the US was a European nation with the same debt levels and economy as it has now, it would be refused entry into the EU at all on the basis it was financially incompetent.  The US’s current Federal debt level is 14 trillion.  Everyone from Obama down has said their spending is “unsustainable”.  Its total annual tax take is 2 trillion per year.  The remainder of that debt is funded via bonds.  When the interest on that debt exceeds the 2 trillion mark, the bond market will pull out altogether, because it will be mathematically impossible for the US to pay off its debt.  PIMCO is already dropped all its US bonds and is shorting them.

      Economics 101 says that when a government prints money on a massive scale—directly or indirectly—inflation goes up.  Sometimes, hyperinflation kicks off.  No lack of understanding here, mate.

    • Steve says:

      05:56pm | 30/06/11

      oopsie Travis. Greek debt is about 1.6 time GDP or 160% of GDP. It is certainly not 160 time GDP.

      You are right that USD debt is 1 times GDP or 100%. However given that the debt ceiling is to be lifted from 14 trillion to 20 trillion the debt as a percentage of GDP will no doubt worsen.

      To put it in perspective the only other time in the history of the US that public debt exceeded 100% of GDP was the final years of WW2.

      You are right that they won’t formally default. They will do what they have been doing which is effectively printing money if the form of quantatative easing. (QE1 and QE2 ) But as you know from economics 101 that will devalue the currency. This is a quasi gentleman’s way to default on your loans. If you are a US treasury holder you are wearing losses via devaluation of the holding. Apart from the dramatic headlines who cares if it is a formal default or informal default via the printing press?

      Greece is in trouble because they have spent more than they have earnt over a long period of time. There is a graeter propensity for that to happen while a left wing/socialist government is in power. You only need to read the posts from the ALP supporters on punch who claim that the conservatives hoard money too much and pay back debt too much. their beloved ALP goes into debt, wastes too much and they think it is good and defend it.

      What is the bet that the Greek demonstrators were welded on socialists who loved the gravy train of Government largesse and as such voted socialist. What’s the bet those socialists would erupt with anger on web sites like this if a “filthy born to rule” conservative had the audacity to suggest Greece should live within its means?

    • fairsfair says:

      02:51pm | 30/06/11

      Hey Nossy!

      You notice them Greek cops are a wearin manbags too? See, when will men learn? You can’t stomp down on a protestor with a wallet, iPone, gum and keys in your hands…

    • ausspud says:

      02:54pm | 30/06/11

      In greece their retirement age is 50 and recieve 95% of their income till they drop dead.
      Public transport is free to almost everyone.And dont even get me started on their tax system.People are only complaining because the free lunch is over and will actually have to start working for their pay.
      Bloody lazy socialists.

    • Edward James says:

      03:26pm | 30/06/11

      Well I expect all that is about to stop ausspud. Here is hoping their problems don’t extend to Australia nossy may have to get a job!  Edward James

    • nossy says:

      03:42pm | 30/06/11

      @Edward James - I am retired Ed !  hahahahaah

    • Edward James says:

      10:49pm | 30/06/11

      @ nossy you told us your retired earlier.

    • Pete #205 says:

      11:29pm | 30/06/11

      Public transport is free huh?  Tell that to my still unpaid fine…

    • Nicholas says:

      02:56pm | 30/06/11

      Back to Greece… Erick is correct that socialist greed is a huge factor in all of this. The excesses of capitalism haven’t helped.

    • Gran Depine says:

      04:41pm | 30/06/11

      We are all being manipulated world wide. There is a great currency fight going right now and China is going to win. They were once the world super power and today they are on their way of achieving their 50 year plan.

      Greece is just a pawn. Dr. Tobras, along with his colleague George Noulas (Greek politician), are the originators of a monumental lawsuit filed on April 09, 2010, approximately one year ago. The lawsuit alleges that foreign speculators, specifically primary syndicators of Greek loans, working alongside domestic enablers within the Greek government and within the Central Bank of Greece, facilitated the manipulation of the Greek bond market for their personal financial gain. This manipulation also had the demonstrable effect of pushing the nation of Greece into the arms of the IMF and EFSF on extremely draconian terms.

      The GFC was all manipulated and the domino effect will continue with the rest of the PIIGS including the UK and the USA. We are on the abyss of the new monetary order. It will happen when the banks will no longer trust each other. Out of the chaos, the phoenix will rise from the ashes and Australia will also play a role in the order.

    • Robert S McCormick says:

      04:58pm | 30/06/11

      Does the current Greek Tragedy remind you of anything?
      Just like the Greek Government both the Federal & SA Governments, & probaly the others as well, have been employing more & more & more Public Servants - in SA this despite the fact that they have hundreds of State Public Servants who have no jobs, no prospects of getting one & who turn up every day to sit in a cosy little office hidden away in the State Government’s building & do precisely Nothing.
      They are FULL Pay, Full Super & all the other perks the unbelievably lazy SA Public Servants get.
      Yet the Public Service Union behave as if there is a shortage of workers - there probably is given that none of their members actually do any work to start with. The obscene wages & conditions claims go on & on & on.
      We are told that since the ALP came to office they have increased the Federal Public Service numbers by over 20,000 most of whom are working not for Australia but for ALP MPs & Senators!! What exactly do all those parasites actually do?
      The Greek Government says it needs, note that Needs not wants, to sack 150,000 surplus Public Servants. The vast majority of whom, we are told, actually do no work whatsoever.
      It has been reliably reported that the vast majority of the protestors, tearing up roads, destroyng private & public property etc. are, in fact, Greek Public Servants.
      That they have no work to do is proven by the very fact that they are not going in to work. Untold 1000s though on the public payroll simply don’t even bother to go into work on a daily basis - BUT they still collect their inflated & totally unjustified pay packets.
      A bit like right here in Australia.
      Australia is heading in the same direction. If you can bear to check out South Australia! The moribund, only good news reporting Premier, who incidently is so on the nose he has had to resort to writing letters to the Adelaide Advertiser to get anyone to pay attention to anything he says!
      This paragon of Fiscal Responsibility has, so far as we know, for Rann & his hoods operate in under a cloud of secrecy, almost 100 Media Advisors! What the hell the Premier of the most backward State in Australia needs all these Media Advisors for is beyond comprehension - unless, of course, they are all Union hacks or family who need an income. He did donate millions to a little area in Italy which no-one, other than those who have family connections there, had ever heard of. He appointed a Special State Envoy to this little area & shall, by the time the contract ends in 2014,  have squandered over $1,000,000 of Tax-payer’s money in pay’n'perks for this person. He then, once again using Tax-payer’s money, used $17,000 to pay for the publication of this man’s little book of amateur pictures.
      When the next GFC comes around where will we be then? Just like Greece, when the sales of Resources stop because China, India etc. no longer need them we will be in deep, deep trouble & all thanks to the ALP under Kevin Rudd, Julia Gillard & Wayne Swan who squandered all the money Howard & Costello had managed to put away for a Real Rainy Day not that farce Rudd,Gillard & Swan created.
      Abbott’s crack-downs will bring on the riots just like they are in Greece.

    • Rick O'Shea says:

      05:27pm | 30/06/11

      Greeks don’t like work, they were born with bad backs and tax evasion is the Greek National Sport. They are Europe’s bluggers and will never match the dynamic Northern Europeans in terms of productivity or initiative.I feel sorry for the odd Greek that does not fit this mould.

    • Gran Depine says:

      06:49pm | 30/06/11

      @ Rick O’Shea Ignorant child.

      Quote “Greeks are lazy. This underlies much of what is said and written about the crisis, the implication presumably being that our lax Mediterranean work-ethic is at the heart of our self-inflicted downfall. And yet, OECD data among its members show that in 2008, Greeks worked on average 2120 hours a year. That is 690 hours more than the average German, 467 more than the average Brit and 356 more than the OECD average. Only Koreans work longer hours. Further, the paid leave entitlement in Greece is on average 23 days, lower than most EU countries including the UK’s minimum 28 and Germany’s whopping 30.

      Greeks retire early. The figure of 53 years old as an average retirement age is being bandied about. So much, in fact, that it is being seen as fact. The figure actually originates from a lazy comment on the NY Times website. It was then repeated by Fox News and printed on other publications. Greek civil servants have the option to retire after 17.5 years of service, but this is on half benefits. The figure of 53 is a misinformed conflation of the number of people who choose to do this (in most cases to go on to different careers) and those who stay in public service until their full entitlement becomes available. Looking at Eurostat’s data from 2005 the average age of exit from the labour force in Greece (indicated in the graph below as EL for Ellas) was 61.7; higher than Germany, France or Italy and higher than the EU27 average. Since then Greece have had to raise the minimum age of retirement twice under bail-out conditions and so this figure is likely to rise further.

      Greece is a weak economy that should never have been a part of the EU. One of the assertions frequently levelled at Greece is that its membership to the European Union was granted on emotional “cradle of democracy” grounds. This could not be further from the truth. Greece became the first associate member of the EEC outside the bloc of six founding members (Germany, France, Italy and the Benelux countries) in 1962, much before the UK. It has been a member of the EU for 30 years. It is classified by the World Bank as a “high income economy” and in 2005 boasted the 22nd highest human development and quality of life index in the world – higher than the UK, Germany or France. As late as 2009 it had the 24th highest per capita GDP according to the World Bank. Moreover, according to the University of Pennsylvania’s Centre for International Comparisons, Greece’s productivity in terms of real GDP per person per hour worked, is higher than that of France, Germany or the US and more than 20% higher than the UK’s” End quote

      Get your facts right. Educate yourself.

    • St. Michael says:

      01:08am | 03/07/11

      “Greek civil servants have the option to retire after 17.5 years of service, but this is on half benefits.”

      Out of interest, does “on half benefits” mean they retire with a pension that amounts to half their highest wage earned while in the public service, for the rest of their life?

      If so, that’s a very significant debt for a government to bear all on its own.  If I scramble my way to $90,000 per year with a government department, hang onto that, and then, 17.5 years later, “retire” to a continuing income of $45,000 or so for the rest of my life, well, let’s just say that’s probably a lot more generous than the Australian age pension.

      Also, 17.5 years is an interesting number.  Say you join the public service at 20.  At 37.5, then, you can retire on half your government income and not have to work another day in your life.  And that presumably doesn’t stop you getting other work.

      Where have I got this wrong?

    • edward III says:

      06:09pm | 30/06/11

      The EU is a socialist joke.  There are only a handful of countries worthy of membership the rest are basket cases and corrupt socialist sh*t holes.

      Greece has got what it deserved.  They demanded entry, fudged their way in and lived the champagne lifestyle while on a retsina budget.

      No one pays their taxes there, its corrupt, crime ridden, massive bloated public service, very lazy work ethic, and a retirement age of 53!!!!

      Why should the Germans have to raise their retirement age and taxes to bail out these bludgers?  Make them pay it all back then disband the EU.  The Swiss and the Norwegians had the best idea - f*ck the EU.

    • loxy says:

      06:18pm | 30/06/11

      Your friend Danai says that it is the poor and middle class that will cop the extra tax but you don’t explain how it is that the rich are avoiding paying their taxes. Can anyone explain?

    • Steve says:

      06:22pm | 30/06/11

      Gran putting all other thoughts aside had Greece lived within their means they would not be in trouble today. Whether you are an individual or a country no one can spend more than they earn year after year without the chickens coming home to roost at some time. That time is now for Greece.

      The people have to take their fair share of the blame. Would it have killed the greeks to have elected a conservative Govt every now and then and paid back some debt? the people only elected socialists because the socialists promised to keep the party going. Did the people of Greece think that the national credit card would simply never Max out?

      I am sorry Gran the people turned a blind eye to the country’s deteriorating position yet kept electing more of the same.

      Australia would look like Greece in 10 years if the Greens were running the show or about 15 years under Labor. That is why conservatives like me keep banging away on this web site about how bad the ALP is. How stupid would we be if we can’t learn from the mistakes of the PIGS, UK (13 years of Labor)

    • Pete #205 says:

      11:24pm | 30/06/11

      1990 - 1993 ND
      1993 - 2004 PASOK
      2004 - 2007 ND
      2009 -        PASOK

      Look, I don’t lean either way anymore, but for people to blame the Greek socialist government alone is a bit rich.  New Democracy (conservative) have had their time in power, particularly in the last decade when it really hit the fan.  I will agree that there is a definite socialist tinge to their politics if you look at the alternative parties (a bit crazy actually)

      Yes, the people have to take the blame, but not for the government they elect.  It’s for allowing systemic nepotism and corruption to be accepted on a daily basis.  It’s accepted that to get anything done at any level of government, you hand over the envelope.

    • Loxy says:

      06:22pm | 30/06/11

      “But it is the Greek government that has done this, not the Greek people. We are angry at our government for this, but why should we be punished?” I get that the Greeks are angry and rightly so. However, it’s not the EU or Britian that should be punished either by having to financially bail them out. The reality is if the Greek people are not prepared to make some sacrifices i.e. job losses and higher taxes then their country will go bankrupt and that will have major impacts for them and the world. The Greek government stuffed up royally but the time for blame is long gone, the time is now for action. So stop the protests and do your bit for your country. Save your protest at the governmentf for the next election.

    • Ipomen Scarlet says:

      07:01pm | 30/06/11

      “People power” is such a seductive trope.

      The Greek experience, however, demonstrates the importance of genuine leadership.

      Whenever the mob is in charge, self interest is amalgamate­d into a beast that overturns actions that benefit society as a whole.

      A good example of this is the dire economic straits of California­. Direct democracy there resulted in reduced taxes, increased spending, and books that couldn’t be balanced.

      While it’s racist and lazy to call Greeks lazy, we cannot gloss over their spending demands, rejection of increased taxes, and generally unrealisti­c expectatio­ns - eg maintainin­g the current (extremely low) retirement age.

      The simple truth is that Greece (with other countries, including the US) has been living beyond its means and this goes beyond corrupt elites.

      I’ve therefore been shocked by the reaction of diaspora Greeks and certain elements of the intelligentsia on this issue.

      A good example of this fuzzy logic can be found in abundance at The Huffington Post

    • stephen says:

      09:48pm | 30/06/11

      The UE was established because Hitler had carved it up but it is the insipidness of european culture and indeed the people themselves, to think that they could bring it together with a common currency.
      It was a bad mistake.
      And now we, the dunderheads in the West with no cathedrals with gargoyles, no beheadings with quarterings, un-cobbled roads, and dry tomatoes, should dip our heads.
      But we know that Culture is relationships. It attenuates to feeling and socialness. This is the West. (it’s our psychology.)
      But the Europeans wanted a staid currency expecting that their heritage and Mozarts would not print on their notes, but enforce a superiority by foil and contrast, and it’s only worked in Vienna where the thin suited ladies and gents in Opera can’t get worked up moneyless, let alone Culture.
      Europe is gone, and all Aussies who want to get laid on the 21st Arrondissement with a scalloped frenchman and come home to Camberwell should rest, rest, and go back in a thousand years… and then ask about the gargoyles.
      Only then, will they conceive.

    • St. Michael says:

      10:25pm | 30/06/11

      Nice, but I preferred your “Dead dog in alleyway, tire tread on burst stomach” book, Rorschach.

    • NigelC says:

      10:27pm | 30/06/11

      Drunk maybe?
      It’s the only logical explanation for such an error riddled, disjointed stream of consciousness.

    • stephen says:

      10:43pm | 30/06/11

      It’s now in colour.
      (Babies are not best in blue.)

    • stephen says:

      10:58pm | 30/06/11

      I’d never call my kid Nigel…unless i was drunk.

    • John says:

      03:14am | 01/07/11

      The australia is most likely heading in the direct of greece. What does australia create? It imports most of it’s goods and services, it has borrowed half the mortgages from overseas. We are running an economy on instant credit. The captial gain of company’s, investors and individuals is made from debt of another individual who promises to pay it years done the track. This is what got america into trouble, greece, portugal and i’m sure the rest of world is in trouble. This idea of lending, creating credit from debt needs to stop. credit needs to be created form assets, not promises to pay it back years down the road.
      Why is that value can be created, from a future that has not occurred? This is the entire problem, passing the buck, and toxic assets. The side of effect from credit from debt, is uncertain assets, that nobody wants to hold once the system falls apart.

    • stephen says:

      12:26am | 02/07/11

      Minerals.
      Then technology, if we are smart.
      We are in competition with South Africa to build and use a vast array of astronomical telescopes in our desert.
      This is more important to us than a coal mine in Gunnedah, a new cattle slaughter house and sucking up to the Indonesians, or more handouts to the Cairns tourist industry.
      But our PM wants to be photographed giggling in a moving chair.
      ‘What the hell are you laughing at madam ? This is serious ‘.

    • Peter says:

      10:19am | 01/07/11

      And people are so stupid in Australia they vote for the same Socialist/Marxist Progressive lunatic left wing political parties like the evil Labor party and watermelon REDS aka Greens. When are the slow learning sheeple going to wake up to this sweet sounding but disastrous Ideology. Have we become a Nation of fools and cowards although many are starting to wake up lets hope its not too late but the damage already is massive

    • lenig says:

      12:50pm | 01/07/11

      GREECE DESERVES ALL IT GETS they are all corrupt and cry poor even though they are all drawing pensions, benefits and paying no taxes as they work too!! you can’t get anywhere in greece without a ‘fakelaki’ which means envelope stuffed with cash… the governments a joke the public service an even bigger joke! my parents were both migrants from greece and my mother recently went back to sort out some issues with inheritance but no joy, the lawyers were paid off by others, the public service office was hopeless, you turn up and they were all busy drinking coffee and smoking with their feet up on their desks! the answer is always ... we can’t help come back tomorrow… well guess what Greece its tomorrow and now we can’t help! they should all be left to rot in their own financial political stupidity!! most of my relatives included!!!

    • dave says:

      02:21pm | 01/07/11

      These types of things always occur when left wing economic theory runs smack into this thing called reality.  Believe me REALITY is a bitch!!

    • Sony b goode says:

      02:59pm | 01/07/11

      I like how the socialist parasites try to pretend socialism isn’t to blame for it’s own failure. It’s always some external factor that leads to socialisms inevitable downfall. I mean how could anyone fault a policy of feasting on the corpse of prosperity?

    • Mark says:

      04:37pm | 02/07/11

      I thought this article was about Greece , but reading the comments one would thing it was about Australia, silly me !

    • Jay says:

      07:48am | 04/07/11

      It is like asking someone on the dole to repay a debt of $1 million dollars. It will not happen, and the Greeks have themselves to blame because they demanded a socialist economy, sit around all day talking politics and blaming the Americans, refused to collect or pay taxes and now risk having their country taken from them. If they pull out of the Euro then they will become the European version of Somalia. Who knows they may need the Turks to come in and run their economy for them.
      I wonder if they come over in boats whether they will be accepted or sent home?

    • John says:

      12:32pm | 06/01/12

      I don’t blame the Greek people, blame their western financial system that runs printing press’s at five times the rate the country produces. Look around every country is debt to international banking cartel. It’s time every western country cut ties with IMF, World Bank and FED. US dollar’s should be rejected by every western country.

      Another thing since the EU, Portugal, Spain, Ireland and Greece has been weakened by free trade agreements in the EU zone. France and Germany have been the only benefactors of the EU free trade zone, as they loot the wealth from the other smaller EU country’s.

      All i can say is nationalism, nationalism and nationalism. International Capitalism does not work. Free Trade, just decimates country’s and creates massive unemployed and massive DEBT they have to borrow money to buy Chinese products from international banking cartel who print it out of thin air, which further inflates the economy, leading to a second death.

 

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