Iruzkinak (1)

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  joseba says:

  2015/07/15 at 22:25

  Beyond metaphor … comes total nonsense, German style
  http://bilbo.economicoutlook.net/blog/?p=31368#more-31368

  “The reason the Greek economy is in Depression is not the stock of outstanding public debt (which is mostly now at very low interest rates and at rather long maturities), but the catastrophic collapse of spending (aggregate demand) since 2008, much of which has been driven by the ridiculous austerity that the Troika (aided and abetted by Germany dominance in European economic policy making circles) has imposed on the nation.
  (…)
  That is why Greece fell into a massive Depression. The growth in its public debt was just a reflection of the rise in public deficit as its tax revenue fell and the welfare payments rose – that is, the automatic stabiliser component of the fiscal balance.
  (…)
  The solution is always for the government to either directly increase spending to lift sales in the private sector and stimulate further income and/or to cut taxes, which might lead to higher private spending.
  (…)
  A currency-issuing government is never at “the whim of banks, pension funds, and hedge funds”. The private banks etc are always beggars at the table of corporate welfare provision if the government asserts its full range of capacities.
  (…)
  Anyone with any understanding knows that the comparison between Eurozone nations with use a foreign currency (the euro) and the US, UK, China, and Japan, which are fully sovereign in their own currency (they issue it under monopoly conditions) is invalid when discussing public liabilities and their implications.
  (…)
  All currency-issuing governments can control the yields that they have to pay on their debt anytime that they desire to do so. The fact that in this neo-liberal era yields are mostly determined by auction processes whereby the last acceptable tender bid from one of the private primary bond buyers sets the rate for that tender doesn’t alter the power of the government as the issuer to set whatever yield it likes including zero!
  (…)
  We also know that the central bank could simply purchase all of the bonds if it was instructed to do so by the government. If there are laws that prohibit that now, the legislature can change them. If there are regulations that prohibit that, the government can alter procedures.
  The central bank can always announce it will buy whatever bonds are available for sale in the primary market (as above) or in the secondary markets (after the bond is issues) and use its infinite currency issuing capacity to drive the yields to near zero (in secondary market debt) if it wanted to by pushing up the face value of the bond in the markets.
  (…) a currency issuing government, should it desire, can spend beyond its tax revenue without issuing any debt at all. It could simply instruct its central bank to credit whatever private sector bank accounts it desired to transfer purchasing power into – whether it be to purchase private labour, goods and services, or make income transfers.
  (…)
  No Eurozone government has these capacities which makes any comparison with nations such as Japan and the US irrelevant.
  (…)
  Apparently, when the Greek prime minister was negotiating at the time about fiscal austerity, the French were pressuring them to go ahead with billions of euros of military ships and helicopters. They agreed!
  Germany has continued to flog submarines to the Greeks and has put those expenditures outside the austerity net in its demands through the Troika.”