Neoliberals deliberately subjugate EU prosperity to maintain grip on power. - Page 2 - Politics Forum.org | PoFo

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#14981077
noemon wrote:
It seems that you are correct on the reverse qualified majority argument, but that was agreed by eurozone(not EU members who may opt-in if they so wish) countries on January 2013, so it is utterly moot, especially in relation to Brexit(as it does not apply to Britain at all) as well as the crises. Moreover, a fine has never been applied in the entire history of the EU despite of the Pact being broken by several countries for several decades, and that makes it comprehensively moot.

Tell us honestly Rugoz, do you believe that the EU (Commission) is to blame for the austerity programs?

Suppose the fine was 10% of the nation's GDP and the ECB could just deduct it from the nation's account with the ECB. Then the fine is better understood. It would hurt a lot. OTOH, if it was 1K euros then, so what? Without a number we don't know how much it would hurt, right?

I don't like agreements like this that can't be backed out of. The people of the nations didn't give informed consent so their slavery is abuse. I have no idea how well the leadership of all parties in the nation's parliament understood what the treaty said. But I'm positive the people didn't understand

Just because a fine has never been applied doesn't mean that it wasn't threatened, perhaps behind closed doors. The EU loves to make threats out of the public eye. Italy and Portugal both recently caved-in without the Gov. changing so it wasn't a free choice, IMHO.
#14981082
Steve_American wrote:Suppose the fine was 10% of the nation's GDP and the ECB could just deduct it from the nation's account with the ECB. Then the fine is better understood. It would hurt a lot. OTOH, if it was 1K euros then, so what? Without a number we don't know how much it would hurt, right?


The fine can be up to 0.5% of GDP, it can seen in the links Rugoz provided:

Europa wrote:KEY POINTS

Initiating the procedure

Under the SGP, the EDP is triggered by deficit and debt criteria:

Deficit criterion: the general government deficit is considered excessive if it is over the reference value of 3 % of Gross Domestic Product (GDP) at market prices; or
Debt criterion: debt is above 60 % of GDP and the target of reducing debt by 1/20th per year was not reached during the previous 3 years.
Stages of the procedure

for the EU country whose deficit or debt exceeds the defined limits, the European Commission prepares a report evaluating whether or not to launch an Excessive Deficit Procedure;
the Commission then sends a notice to the country in question and informs the Council if it considers that the deficit is excessive;
on the Commission’s proposal, the Council decides by qualified majority whether, in light of the observations of the country concerned, the deficit is excessive;
if the Council decides that a deficit is excessive, it makes recommendations to the country and prescribes a maximum time limit for it to take effective action (3 or 6 months);
if a country persists in not implementing the recommendations, the Council may decide to give it formal notice to take measures to reduce the deficit within a specified period;
if the country does not comply with the Council’s decisions, the Council may decide to impose sanctions.
Sanctions

Sanctions are imposed if the deficit is not reduced. For countries in the euro area, these sanctions are imposed on a gradual basis beginning with:

the obligation to lodge with the Commission an interest-bearing deposit of 0.2 % of GDP in the preventive phase;
the obligation to lodge a non-interest-bearing deposit of 0.2 % of GDP in the corrective phase. This deposit is converted into a fine of up to 0.5 % of GDP if the recommendations to correct the excessive deficit are not met.


I don't like agreements like this that can't be backed out of. The people of the nations didn't give informed consent so their slavery is abuse. I have no idea how well the leadership of all parties in the nation's parliament understood what the treaty said. But I'm positive the people didn't understand

These agreements can be changed however you like as long as people vote for non neo-liberal governments. You keep ignoring the fact that Europe's nations have been ruled by neo-liberals for decades and it is these governments that have imagined and agreed on all these issues with the democratic mandates received by their national electorates.

Just because a fine has never been applied doesn't mean that it wasn't threatened, perhaps behind closed doors. The EU loves to make threats out of the public eye. Italy and Portugal both recently caved-in without the Gov. changing so it wasn't a free choice, IMHO.


These threats are being made public, as is the current case with Italy who is not budging and a stand-off has been on the horizon for a while. I stand with Italy(as I have already expressed in here several months ago) and consider the stand-off as a ridiculous political attempt by neoliberal governments in the EU, primarily the German and Dutch governments to ascertain their political and ideological grip, as Council President Tusk admitted in public "it is not so much about the economic hazard but about the political hazard". Italy's budget with 2.4% deficit is well under the 3% budget deficit which makes the whole show totally pathetic and surreal making one truly wonder and that is why I guess Italy eventually won the argument and this penal procedure was stopped in its tracks without Italy making any changes to its budget aside from postponing a social security program for 3 months from January 2019 to April 2019. :lol: I guess even that was just a face-saving measure for the Commission.
#14981103
Steve_American wrote:@noemon,
The US GDP is over $19.39T times 0.5 == $940B. I assume it is every year, or is it every month?
And you call that a meaningless fine.


I did not call it a meaningless fine anywhere and you should not be putting words in my mouth. I said that such a fine has never been imposed despite of countries breaking the rules for decades, which makes your entire argument completely moot. And this assumption of yours about the year or months as well as your previous one that the fine is 10% is also wrong. It is the total fine and it is max 0.5% not 10%. You are also ignoring the obvious fact that this rule has been agreed democratically by every single EU government and that even if the fine is imposed in a country, it can still be waived with qualified majority in the Council(national governments).
#14981239
This is an effort to get anyone to reply to the original [i.e. top 2 posts] in this thread.
The point was that in the EU industrial production is down. And it is down more in the Eurozone.

1] It is down more in other nations? I don't know. I'm too old and sick to be or become an internet wiz.
2] But, it certainly isn't going to led to prosperity. And prosperity was the key promise to the European people when they voted to enter the EU and EZ.
3] Now, why is production down? It's simple. Austerity means the people have less income to spend.
4] What is the cause of austerity? This also is simple. After the GFC/2008 there was not enough Gov. spending to replace the loss of income that the crash caused.
5] Why was there not enough Gov. spending? Because the EU rules were not set aside until 2012 and then not nearly enough Gov. spending was allowed. In a recession the only Gov. pending that increases the incomes of the corps. and people is deficit spending. Raising taxes and spending that money takes away income from someone before it is spent to increase another's income. Note that the crash destroyed euros that people thought they had.
6] How did EU rules stop the Gov. f each nation from deficit spending? The rules limit deficit spending to 3% of GDP and the total debt to 60% of GDP. The 1st was not the main problem, the 2nd was and still is.
7] Why? After the crash the GDP of all nations fell, but the size of the debt didn't fall. So, when you divide the tot. debt / the tot. new GDP [which is now less] the answer you get is now a larger number. So. almost every EU nation was then over the limit of 60% of GDP. Also, tax revenues fell after the crash. This meant that now that the govs. could not deficit spend they also were required by the rules to balance their budget. That is, cut spending. This is austerity. Keynesian economics would have called for an increase in spending, not a cut.
8] So what does this mean? It means that each year since the crash [now for 10 years] the corps. and people have earned less than they should have to get the nations out of the recession. Remember that spending is always someone's income and before the 1st person can spend he must have income [or borrow, but banks were not lending]. Now, 10 years later the accumulated deficit in required income is a huge number.
9] So, the corps. in Europe are not making things because they see that it will be hard or impossible to sell the things because their customers have little income to spend. Because they are not making things, they their workers are working less hours and so are earning less. So, the workers have little to spend.

This may be good for AGW but it makes the people mad. What makes them madder is that their Gov. is adding taxes onto their backs. What makes them furious is their Gov. cutting taxes on the rich at the same time.
In a thread in Economics and Capitalism I explain that when the GDP is not growing and the 1% are taking a bigger slice of the economic pie then the poor feel the pain immediately.

So, what I think was the key promise when the EU was being sold to the people is impossible to deliver after the crash because of those EU and EZ rules. And, this was predicted by at least some economists way back then, and certainly when the EZ was being formed in the late 90s.
#14981244
noemon wrote:It seems that you are correct on the reverse qualified majority argument, but that was agreed by eurozone(not EU members who may opt-in if they so wish) countries on January 2013, so it is utterly moot, especially in relation to Brexit(as it does not apply to Britain at all) as well as the crises. Moreover, a fine has never been applied in the entire history of the EU despite of the Pact being broken by several countries for several decades, and that makes it comprehensively moot.

Tell us honestly Rugoz, do you believe that the EU (Commission) is to blame for the austerity programs?


EDPs have been started against most EU countries at some point, the fact that no country was fined so far doesn't mean the pact has no effect on member states' budgets. Clearly the 2013 revision empowered the Commission, since it can overrule a 55% majority in the Council. The 2013 fiscal pact was approved by 25 members, true, but that's what Germany demanded for approving the ESM (European Stability Mechanism).

You always fall back to "but at some point in the past member states made those rules". That is always true of course, but unlike you I don't trust national governments when it comes to decisions at the EU level and I don't think those decisions should bind future national governments for all enternity.
#14981276
Steve_American wrote:6] How did EU rules stop the Gov. f each nation from deficit spending? The rules limit deficit spending to 3% of GDP and the total debt to 60% of GDP. The 1st was not the main problem, the 2nd was and still is.


Rugoz wrote:EDPs have been started against most EU countries at some point, the fact that no country was fined so far doesn't mean the pact has no effect on member states' budgets.


Suppose there was no EU to tell you that you cannot spend more than 3% in a deficit when you have more than 60% debt on your shoulders, would you be able to spend this money if the EU did not breath down your neck?

The answer is no! Because the spreads on your bonds are so large that there is nowhere to draw the money from. You are both ignoring the fact that this became an issue only after Greece, Italy, Spain, could not get funded from the markets(aka as the few banking conglomerates in N.Y., London, etcetera) and they had to turn to the EU to find money. The EU provided the money through the ESM and she did so with much less conditions attached than traditional IMF, World Bank or the regular banks in the open market. And to top that up the EU is also providing free structural funds from the EU budget which do not pile on the debt of EU countries. Plainly speaking, without the EU, these countries would not be able to run deficits at all, they would however be able to print money till kingdom come with their currencies becoming toilet paper in a matter of weeks or days as it had happened numerous times in the past for them. If that is your alternative, then you must surely both understand why you are wrong.

Clearly the 2013 revision empowered the Commission, since it can overrule a 55% majority in the Council. The 2013 fiscal pact was approved by 25 members, true, but that's what Germany demanded for approving the ESM (European Stability Mechanism).


It sure did, and I disagree with it but that is how things work in the real world and have always worked, you give something up in exchange for something else.

You always fall back to "but at some point in the past member states made those rules". That is always true of course, but unlike you I don't trust national governments when it comes to decisions at the EU level and I don't think those decisions should bind future national governments for all eternity.


It is not a fall-back, it's the truth and this truth is especially important among people who have totally given up on holding governments to account and who clearly believe that the EU in itself is the issue rather than their own national governments.

Why are you refusing to answer my question Rugoz?

noemon wrote:Tell us honestly Rugoz, do you believe that the EU (Commission) is to blame for the austerity programs?
#14981290
noemon wrote:Suppose there was no EU to tell you that you cannot spend more than 3% in a deficit when you have more than 60% debt on your shoulders, would you be able to spend this money if the EU did not breath down your neck?


The 3%/60% limit is simply retarded. The deficit in a single year doesn't matter nor does the debt-to-gdp ratio. Certain countries are bankrupt are at less and others are perfectly fine at more. Those rules were conceived by imbeciles.

The structural deficit rules are sound in principle, but ultimately still useless, since the structural deficit can only be determined reliably ex post.

Instead monetary and fiscal policy should act in concert.

noemon wrote:It is not a fall-back, it's the truth and this truth is especially important among people who have totally given up on holding governments to account and who clearly believe that the EU in itself is the issue rather than their own national governments.

Why are you refusing to answer my question Rugoz?


Even if EU institutions were originally created by national governments, they have their own agenda and inertia. They're not only appendages of national governments, you cannot simply deny that.

Besides, sometimes national governments can only be held accountable if you take away their toys.
#14981291
@noemon,
TLDR past the 1st couple of sentences.
They contain an error right off that makes me and all MMters ignore the rest.
Japan has a debt to GDP ratio of way over 110% and Japan sells bonds with negatie interest rates, I'm told by MMTer professors of economics.
Why can Japan do this? Because Japan issues its own fiat currency and Greece and the rest of the eurozone don't.
You claimed that no nation can sell bonds if it has a debt load of over 60% of GDP, and that is just false.
In the US the states use the dollar and the Federal Gov. issues it.
This means that there is zero risk of default on Federal bonds, but a finite risk on Texas or Kansas bonds.
It makes no sense at all to compare Japan or the US to any nation in the eurozone when it comes to bond sales.
#14981298
Steve_American wrote:@noemon,
TLDR past the 1st couple of sentences.
They contain an error right off that makes me and all MMters ignore the rest.
Japan has a debt to GDP ratio of way over 110% and Japan sells bonds with negatie interest rates, I'm told by MMTer professors of economics.
Why can Japan do this? Because Japan issues its own fiat currency and Greece and the rest of the eurozone don't.
You claimed that no nation can sell bonds if it has a debt load of over 60% of GDP, and that is just false.
In the US the states use the dollar and the Federal Gov. issues it.
This means that there is zero risk of default on Federal bonds, but a finite risk on Texas or Kansas bonds.
It makes no sense at all to compare Japan or the US to any nation in the eurozone when it comes to bond sales.


The reason you ignored a 4 sentence paragraph as TLDR is because it addresses your argument before you even make it:

noemon wrote:Because the spreads on your bonds are so large that there is nowhere to draw the money from. You are both ignoring the fact that this became an issue only after Greece, Italy, Spain, could not get funded from the markets(aka as the few banking conglomerates in N.Y., London, etcetera) and they had to turn to the EU to find money. The EU provided the money through the ESM and she did so with much less conditions attached than traditional IMF, World Bank or the regular banks in the open market. And to top that up the EU is also providing free structural funds from the EU budget which do not pile on the debt of EU countries. Plainly speaking, without the EU, these countries would not be able to run deficits at all, they would however be able to print money till kingdom come with their currencies becoming toilet paper in a matter of weeks or days as it had happened numerous times in the past for them. If that is your alternative, then you must surely both understand why you are wrong.


You see Greece and Italy are neither Japan nor the US, and their own history proves that they cannot print money like the US or Japan because their currency has collapsed several times in the past, unlike Japan's and the US's for reasons that are obvious to anyone with half a sense. They are both exporting their currencies at an extremely high-rate thus deflating the money supply in their own internal markets, they both have this ability and perhaps a couple more countries have this privilege but for everyone else that is simply impossible, because if you double the amount of money within a certain realm, then your own money is immediately worth half. But if you double it and export the extra money out of the country(like the US and Japan), then it's not a problem, as people's money internally are still worth the same.

You are still both refusing to answer my simple question. Even for the debt crisis, national governments played the most crucial and central role, it was not commissioners or bureaucrats running the show, it was Merkel, Schauble, Sarkozy, Dijsselbloem, Papandreou, nationally elected politicians controlling the entire debate, outcomes and all the decisions. You must have lived in another dimension to deny this obvious reality or to try and hide it under the rug by simply screaming EU at every turn, aside from blaming the wrong entity you are also indirectly excusing all these politicians as well as the people who voted for them, which is bad...mmmkay!
Last edited by noemon on 19 Jan 2019 20:25, edited 1 time in total.
#14981509
@noemon,
Again, TLDR;
1] I said I wanted anyone to reply to the reported fact that industrial production is down across the whole EU and down somewhat more in the eurozone.
The eurozone was supposed to provide PROSPERITY and it isn't doing that.
And again, you ignored that to talk about something else. Someone might say all of your replies have been off topic.
2] In your reply 2 posts ago, you implied right off that I'm crazy to think that any nation could borrow at a low interest rate if it had a debt to GDP ratio above 60%.
If you wanted me to keep reading that post you should have not implied you meant any nation. You should have said "a nation back in gold standard days, or a nation now in the EU or EZ, or a small poor nation with little ability to earn foreign currency. But you didn't say that, IIRC you said, "a nation that ...".

3] You keep harping about how the fines for nations that have too much debt have never been imposed. My reply is that when a law only applies to 28 powerful people it is unlikely to actually result in prison time for any one of them even if they all break it. For example ---
. . a] How many sons of people how make over $500M a year have gone to prison for rape? How many have committed rape?
. . b] How many people who earn over $500M have gone to prison for tax evasion? How many do it?
. . . . . Also, the rules in the EU are not applied evenly. Germany has had a trade surplus of more than is allowed [which is too much BTW] for years (and not even a warning has been sent to them, IIRC). Portugal gets slammed for doing what France got away with. Etc.

@noemon, In case you or anyone else is interested, I'll suggest some fixes that don't require the breaking up of the EU.
They all involve changing the rules, so, just assume that phrase is in every point.
1] The debt to GDP ratio should not be calculated on the current GDP in a recession. But, rather on the highest it has been recently. On the assumption that the recession is temporary and the GDP in the good times is the normal GDP.
2] The tax revenue [used to calculate the current deficit] in a recession is also not reduced, but rather kept at what it was before the recession started.
3] In a recession the ECB should give [not loan] euros to every nation in the EZ, based on the population of that nation or some other stand in for "size".
4] Every year the ECB should give some euros to every adult in the EZ and some amount less for each child to its parents. This is intended to cause a small amount of new income to keep the economy moving. This should keep the industrial production from falling at times like now, i.e. 10 years after the last recession.
5] The ECB should guarantee the bank deposits of every bank in the EZ and maybe EU. If this requires one agency to regulate all the banks then do that. This is to give depositors confidence that their money in banks is safe, unlike now when the bankrupt(?) nations are the ones who are doing(?) it but can't (because they are in a crisis and look bankrupt).
Last edited by Steve_American on 20 Jan 2019 08:20, edited 1 time in total.
#14981519
Steve_American wrote:And again, you ignored that to talk about something else. Someone might say all of your replies have been off topic.
2] In your reply 2 posts ago, you implied right off that I'm crazy to think that any nation could borrow at a low interest rate if it had a debt to GDP ratio above 60%.
If you wanted me to keep reading that post you should have not implied you meant any nation. You should have said "a nation back in gold standard days, or a nation now in the EU or EZ, or a small poor nation with little ability to earn foreign currency. But you didn't say that, IIRC you said, "a nation that ...".


First of all it goes without say that we are in fact talking about the crisis states of the eurozone. You are blaming the EU for bailing them out and the terms and conditions attached, totally ignoring the fact that this happened because there was no other better funding option available. Second, the only nations that can print money without hyperinflation are the ones that can export the extra money as fast as they can print them.

Also, the rules in the EU are not applied evenly. Germany has had a trade surplus of more than is allowed [which is too much BTW] for years (and not even a warning has been sent to them, IIRC).

There is no rule against having a surplus.

Portugal gets slammed for doing what France got away with. Etc.


It would be nice if anyone knew what you are talking about.

3] In a recession the ECB should give [not loan] euros to every nation in the EZ, based on the population of that nation or some other stand in for "size".

If you are talking about QE, its' already doing that.

5] The ECB should guarantee the bank deposits of every bank in the EZ and maybe EU. If this requires one agency to regulate all the banks then do that. This is to give depositors confidence that their money in banks is safe, unlike now when the bankrupt(?) nations are the ones who are doing(?) it but can't (because they are in a crisis and look bankrupt).


There are already EU wide guarantees for bank deposits up to 100k.
#14981526
@noemon,
You wrote:
"Steve wrote: Also, the rules in the EU are not applied evenly. Germany has had a trade surplus of more than is allowed [which is too much BTW] for years (and not even a warning has been sent to them, IIRC)."

You replied:
"There is no rule against having a surplus."

Professor Bill Mitchell is a professor of economics in Australia.
Germany’s serial breaches of Eurozone rules
Posted on Monday, May 11, 2015 by bill
Last week (May 5, 2015), the European Commission’s Directorate-General for Economic an Financial Affairs (ECFIN) published the – Spring 2015 European Economic Forecast – which provide a picture of what they think will happen over the next two years across 180 variables. To the extent that the forecasts reflect past trends (given the inertia in economic time series outside major cyclical events), they provide a clear picture of what is wrong with the Eurozone. The salient feature of the Forecasts is that the European Commission expects Germany to increase its already astronomical Current Account surpluses to peak at 7.9 per cent of GDP in 2015 and falling only to 7.7 per cent in 2017. The Commission has in place a set of rules that require nations to restrict external surpluses to not exceed 6 per cent of GDP. Germany repeatedly fails to abide by those rules, yet lectures the rest of its Eurozone partners about their failures to meet the targets, crazy as they are. The unwillingness of the European Commission to enforce their own rules in relation to Germany is one of the telling failures of the whole Eurozone experiment.


the link --- http://bilbo.economicoutlook.net/blog/?p=30887

This is my evidence, do you have any to refute it?
#14981532
Steve_American wrote: "Steve wrote: Also, the rules in the EU are not applied evenly. Germany has had a trade surplus of more than is allowed [which is too much BTW] for years (and not even a warning has been sent to them, IIRC)."

Professor Bill Mitchell is a professor of economics in Australia.
the link --- http://bilbo.economicoutlook.net/blog/?p=30887
This is my evidence, do you have any to refute it?


This comes as a surprise to me and the reasons are quite evident, first of all you are talking about the MIP(Macroeconomic Imbalance Procedure) which was adopted quite recently at the end of 2011. Second the MIP has absolutely nothing to do with the SGP(Stability and Growth Pact). Third, the MIP is not just about the deficit or current account surplus but about a rather large set of economic indicators. Lastly, your propaganda as well as Bill Mitchel's propaganda is rather obvious. Germany has indeed been subject to such a monitoring and review as have all EU countries ever since 2011 that this was adopted.

European Parliament wrote:In 2013, based on the value of the Macroeconomic Imbalances Procedure Scoreboard indicator for the current account, i.e. its 3 year average, exceeding the threshold value of 6%, and taking into consideration an exhaustive set of macroeconomic indicators and the information available at the time, the Commission decided to conduct the first in-depth review for Germany published in 2014. The assessment of the current account surplus was deepened in subsequent in-depth reviews for Germany, as part of the 2015 and 2016 country reports.

As an outcome of these in-depth reviews, rather than as an outright reading of the scoreboard, the Commission concluded that Germany is experiencing macroeconomic imbalances. The Commission's analysis of Germany's current account surplus emphasises that it has both an external dimension, related to flows from/to the rest of the world, and more importantly, a domestic dimension revealing weakness of domestic demand and excess savings. Further action is needed to increase public investment and facilitate conditions for private investment, including by reforming the services sector and improving the efficiency of the tax system.

The Commission has put forward, for adoption by the Council, recommendations to Germany in accordance with Article 6 of Regulation EU 1176/2011. Implementing these recommendations should help Germany to reduce the existing imbalances.

#14981538
@noemon,
You wrote: "The Commission has put forward, for adoption by the Council, recommendations to Germany in accordance with Article 6 of Regulation EU 1176/2011. Implementing these recommendations should help Germany to reduce the existing imbalances."

OK, but the evidence you supplied said Germany was being watched and that the recommendations had only been "put forward" and it doesn't say they were adopted.
Until they are adopted and given formally to Germany that you can't say that Germany has been "warned".
Also Dr. Mitchell and wikipedia say that Germany's trade surplus is over 8% now.
Not really evidence that Germany was ever told to get it under 6% or be fined, now is it. And show me evidence that Germany was ever fined. Every year since 2011 they have had a trade surplus over the allowed 6% and they have not been fined yet. Why? Is this your evidence that the EU rules are applied to all nations in the same way?

You know, you make a lot of statements of fact.
This is the 2nd time you have been shown to be wrong.
Just why should the lurkers take your word as fact at this point?
And you accuse me of propaganda. Wow!
#14981576
Steve_American wrote:@noemon,
You wrote: "The Commission has put forward, for adoption by the Council, recommendations to Germany in accordance with Article 6 of Regulation EU 1176/2011. Implementing these recommendations should help Germany to reduce the existing imbalances."
OK, but the evidence you supplied said Germany was being watched and that the recommendations had only been "put forward" and it doesn't say they were adopted.
Until they are adopted and given formally to Germany that you can't say that Germany has been "warned".


You can play with semantics all you like, but the fact is that you and Mr Mitchell were posting propaganda about Germany not being monitored, reported and asked by the Commission to change its budget to reduce its surplus. Germany has been subject to such a procedure just like everyone else.

Also Dr. Mitchell and wikipedia say that Germany's trade surplus is over 8% now.
Not really evidence that Germany was ever told to get it under 6% or be fined, now is it. And show me evidence that Germany was ever fined. Every year since 2011 they have had a trade surplus over the allowed 6% and they have not been fined yet. Why? Is this your evidence that the EU rules are applied to all nations in the same way?


Noone has been fined ever! Not only Germany, but noone! I have said this 3 or 4 times already and yet here we have you making ridiculous straw-men.

Steven_American wrote:Is this your evidence that the EU rules are applied to all nations in the same way?


Aside from the above fact that no-one has been fined, one should be able to understand that you are using 2 different sets of rules for 2 or more countries as well. Your goal-post is anywhere and you are equating bankrupt countries with non-bankrupt countries. It's all just a salad to muddy the waters and score a silly propaganda sound-bite. If you believe that EU countries with healthy economies should be subject to the same treatment that Greece is being subjected to, then sure be my guest in trying to convince Europeans or anyone actually of such obvious clap-trap.

You know, you make a lot of statements of fact.
This is the 2nd time you have been shown to be wrong.
Just why should the lurkers take your word as fact at this point?
And you accuse me of propaganda. Wow!


My mistakes have been acknowledged by myself unlike you, they are honest mistakes with proof to that effect -notice the wording in all the articles "for adoption by the Council", "national governments giving the go-ahead to the Commission" and not vice-versa as you claimed- second my mistakes do not change the point of the argument and third you and mr Mitchell have made a lot more than 2 mistakes. But the most important thing is that the core of your arguments are all wrong and have been proven beyond any doubt to be wrong.

Simply put, you and Mr Mitchell claimed that the crisis happened because eurozone states were not allowed by the commission to spend money and have high-deficits, when that is just flat-out wrong. The crisis-states had very high deficits and debts and the commission could not do anything about it for years, having high-deficits and debts did not help them one bit but quite the contrary. The austerity that was imposed on these countries, it was imposed because they went bankrupt(entered a programme) and it was much milder than it would have been without the EU as we have witnessed with other countries receiving IMF and World Bank loans, in the EU, the indebted countries even receive back the profits made on their own ECB debt. Both you and Mr Mitchell used fake arguments about the Commission having powers over their national budgets, when these powers were granted to her after the crisis(in effect from 2014 onwards for the new SGP rules) and not before and despite of gaining these extra powers, the process followed in all cases has sought Council(national government) approval both before and after, making your arguments moot as responsibility has time and time again been firmly on the hands of our elected governments and not on the commission.

Lastly your idea that we can print national currencies out of the crisis, just like the US and Japan, just goes to show your ignorance on other people's economic history as well as basic economics. I see you have totally abandoned this argument now, which will hopefully dissuade you from reading shitty blogs in the future. The eurozone however has the capacity to export its euros abroad thus being able to deflate its internal money supply, which means that it should be preserved in order to achieve & maintain your own stated goal.
#14981697
@noemon,
To be honest, don't refer to DR. Mitchell as Mr. Mitchell. It is rude, and more to the point it reduces his authority. But, maybe that is why you do it.
Do you have a Phd. in economics? Are you a full time tenured professor of economics at a University?
Do you agree that Professors of economics have more authority behind their statements than any run of the mill poster on an internet site?
Not saying that I have not been wrong in this thread, but please point to 3 places where I was wrong. You make the claim that I was wrong more than the 2 places that you were wrong. Note that, just because I let a claim that I was wrong stand and don't try to prove I was right is not me agreeing that I was wrong. I just means I'm too lazy or not a good enough internet wiz to go looking for proof that I was right.
And BTW, you were more wrong than just being wrong in a statement of fact; you denied that another poster was right in his claim without proof and then it turned out he was right. So, you didn't look his claim up before you went and accused him of being wrong.

You said there just above that the crisis nations were all running large deficits and had large total debts before the crisis. I do believe that Ireland for one didn't actually meet those criteria. But, then we may disagree on what is "large enough" to count in this context.

Also, you claimed that I claimed that the crisis [GFC/2008?] was caused by something in the EU or EZ. I do not think I did. Show me. I know the GFC/2008 was caused by the banks in America. So, I doubt that I ever claimed anything different from American banks were the cause.

When some moderator changed the title of this thread, he/she put words into my mouth. He/she claimed that because Neo-liberals had invented Neo-liberalism before the EU was created that, therefore, today it is not possible for technocrats in the EU system [I wanted to say gov., don't think it is a gov.] to deliberately subjugate prosperity to maintain its Neo-liberal ideology.
. . . He/she said it was a chicken-egg situation. Sorry, but I don't get how that follows.

The word 'propaganda' has 2 meanings I'm told. The meaning of my youth == the words that you use when you knowingly tell lies to further your goals. And a new meaning that I've been told about == the words that you use when you put out your (true, to you at least) message to further your goals. Which one are you accusing me and Dr. Mitchell of?

A reply to every reader.

Dr.Mitchell, other professional MMTrs and I are saying this.
The original treaties that created the EZ were deeply flawed.
They were based on the assumption that the social science of economics had reached a point were it had finally found TRUTH.
MMTers assert that the truth that Neo-liberals had found was and is false.
MMTers assert that it has a found a set of statements that are much closer to the truth than Neo-liberal economics.
MMTers assert that all sovereign nations must have a way to protect their economies from foreign interference. Examples are: tariffs, a floating exchange rate, devaluing their currency, capital controls, default on its debts, etc. The EU & EZ made all these impossible.
MMTers assert that the gold standard was a bad thing. Necessary at the time maybe but still had bad effects for small nations which could not export enough at a high enough price to pay for what they need to buy. And foreign investment just made it worse because the investors want a return on their investment and this reduced the amount the nation got for its exports. The small nations were trapped with not enough income to buy the tools (factories, etc.) to increase their income; a Catch-22. The Neo-liberal rules of the EU & EZ had the effect of almost putting every nation in the EU back onto the gold standard.

The FDC/2008 was not caused by the EU. Instead the GFC exposed the flaws in the EU rules. It was not possible within the EU rules to use Keynesian economics to do what had been done for the last 75 years in many nations in such a crisis.
. . . Economics professor Mark Blyth has a youtube video where he asserts that the loans to Greece just went to the German [mostly]banks which had bought the high interest bonds that Greece had sold before it joined the EZ. Those banks predicted that now that Greece was in the EZ it was impossible for them to be defaulted on. Those banks gambled, then they asserted pressure to make the ECB make the necessary loans to Greece so that their investment would not go up in smoke. The EU & EZ rules made it impossible for the ECB to just give the money to Greece or to the banks. In the US OTOH, the Fed. did just give dollars to the banks to keep them liquid. The EU & EZ rules meant that in the crisis the people of Greece were the ones who would be punished for the deeds of the German bankers and perhaps the leaders of Greece. Punished forever, because the loans can never be paid back. Greece has no increase in income to pay them. Maybe it should disband its military and navy. That would save a lot of money, maybe enough to over time pay back the 68B euro (IIRC) loan.
. . . The people should all just leave Greece, then they will not be punished any more. Make Greece an empty wasteland.
A link to Mark Blyth's youtube talk on what happened in Europe.


Well, it is claimed that small nations like Greece had problems in the past. This is true. However, the world had moved on from the gold standard in 1971 when Pres. Nixon ended it. What had happened before that no longer applied. So, erase that lesson from history. Forget it. So, did Greece have problems between 1971 and 1991 or 2001? I don't know, but it at least, had things it could do other than beg [yes, beg] for a loan. It could even if necessary default on it debts.

Once the EZ was formed it members lost all ability to act to protect its economy. I assert --- yes, all ability. Now, I'm open to people showing me where this assertion of mine is wrong. So, come on folks show me. Please.
#14981730
Steve_American wrote:@noemon,
To be honest, don't refer to DR. Mitchell as Mr. Mitchell. It is rude, and more to the point it reduces his authority. But, maybe that is why you do it.
Do you have a Phd. in economics? Are you a full time tenured professor of economics at a University?
Do you agree that Professors of economics have more authority behind their statements than any run of the mill poster on an internet site?


The argument of authority is a fallacy.

Steven_American wrote:Not saying that I have not been wrong in this thread, but please point to 3 places where I was wrong. You make the claim that I was wrong more than the 2 places that you were wrong. Note that, just because I let a claim that I was wrong stand and don't try to prove I was right is not me agreeing that I was wrong. I just means I'm too lazy or not a good enough internet wiz to go looking for proof that I was right.


Steven_American wrote:Also, you claimed that I claimed that the crisis [GFC/2008?] was caused by something in the EU or EZ. I do not think I did. Show me. I know the GFC/2008 was caused by the banks in America. So, I doubt that I ever claimed anything different from American banks were the cause.


Here, take a look:

Steven_American wrote:Since 2008, Europe lost economic activity the equivalent of Spain’s entire GDP … Spain’s GDP is about $US1.3 trillion and the country employs about 19 million people, to give you an idea of just how much is “missing.” While it is not directly the case that there would be an extra 19 million jobs in Europe if governments here had been more fiscally supportive, that is nonetheless the scale of the issue we’re talking about.

The cause of these losses goes right to the architecture of the monetary union and the way the European Commission enforces it:


Of course yours or Mitchell's argument has been completely deconstructed and trashed. a)The Commission did not even have the extra powers back in 2008 or in its lead up, powers it received in 2013 to impose anything on anyone, even when she did receive these extra powers in 2013 she followed the procedure of the Council giving her the go-ahead instead of acting on its own. I stated with good reason that the Commission cannot act on its own without getting the mandate from the Council(national governments) and provided proof to that effect. Rugoz showed that due to the reverse qualified majority voting that was adopted in 2013, the Commission can move forward without necessarily requiring Council mandate, but in practise she never made use of that and sought Council approval. b) It was not the Commission's fault the crisis states went bankrupt and prostrated themselves before the banks.
c) It was not the Commission's business to figure out solutions, it was the Council's(national Prime Minister's) & the Euroroup's (national Finance Ministers) business as we all witnessed live before our eyes. It was the neoliberal national governments of the EU countries that agreed and then imposed the austerity, not the Commission.

You said there just above that the crisis nations were all running large deficits and had large total debts before the crisis. I do believe that Ireland for one didn't actually meet those criteria. But, then we may disagree on what is "large enough" to count in this context.


The Irish deficit was 7.1% in 2008. The main thing though were the spreads on her bonds making it prohibitive for her to draw any money from the markets.

When some moderator changed the title of this thread, he/she put words into my mouth. He/she claimed that because Neo-liberals had invented Neo-liberalism before the EU was created that, therefore, today it is not possible for technocrats in the EU system [I wanted to say gov., don't think it is a gov.] to deliberately subjugate prosperity to maintain its Neo-liberal ideology. . . . He/she said it was a chicken-egg situation. Sorry, but I don't get how that follows.


First of all, a note exists to show that the title has been changed, your own title is still present in your OP, so no words have been put in your mouth and you should not make such accusations. Second, you want to blame the EU instead of the neoliberal governments running it, both in the national governments as well as in the European elections. Your title removed all responsibility from neoliberal governments and put it on the abstract EU. It is the equivalent of saying "US deliberately subjugates prosperity to maintain Trump on power", when in fact it is Trump doing that not an abstract US entity, by switching their places, you are effectively excusing Trump or whoever is in government like in this case the neoliberal national governments, to blame the state itself. Accusing the state instead of its government is very bad politics because you are effectively excusing the government as well as arguing for the dismantling of the state. To achieve this goal you blamed the Commission both for the crisis as well as for the austerity that followed in the crisis states, when in both cases national governments were directly responsible.

Other errors you or mr Mitchell have made have been addressed above. Mitchell blames the Commission in 2015 for not reporting on Germany, after she had already reported on Germany in 2014 which proves beyond any doubt that he is either ignorant or a propagandist. You or he use 2 different sets of rules like the MIP and SGP as if they are equal in scope, when they are clearly not and nor should they be. Another wrong argument of yours is the one about national currencies being able to save us by printing our way out of the debt, when in fact the only currency in Europe capable to print itself out of a recession without hyperinflation is the euro-currency due to its high demand in the international markets. And you have made several minor errors and assumptions in the process as well, bank deposit guarantees, EU fines, etcetera.
#14981753
@noemon,
To the lurkers,
I am quiting this thread because I feel that I am being accused of every error that the atticle that I linked to as made or is accused of making. Since noemon has already made 2 errors and accepted that they are errors I feel that just becaus e he/she asserts that the ECB was guaranteeing all European bank deposits in 2008 [which is after all the critical year and so maybe like other things changes were made, but how did they get 28 member states to agree on all these things?].
And yes it is certainly true that the national govs. believe the Neo-liberal bullshit. And this doesn't change the fact that the EU technocrats also believe. It does somewhat mitigate the scorn the the EU should be held in because it or they are not alone.
So, bye, bye.

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