danivon wrote:Point is, Steve, that a BBA didn't stop California from building up problems.

Oh, and we weren't insolvent and we were in a far better position than Greece. And we also use the money printing trick of QE, which we can because we are not in the Euro.

By the way, Spain's debt is lower than Germany's.

Spain's major problem - like that of Ireland - is not that the government is directly in trouble fiscally, it's that banks are in deep hock thanks to a property bubble bursting (Spain has a ridiculous number of empty homes). Because bank deposits are guaranteed to a limit, and because failing banks are a really bad think for a nation's economy, the government is forced to either guarantee support or watch as the rug is pulled from the banks and then the treasury.

Ray Jay wrote:Re the economy, I would prefer Romney over Obama (I can see that I didn't make that clear), but I'm not confident that Mitt will do this right. He's talking about increasing military spending and lowering taxes which is hard for me to imagine. I think the right answer is a grand compromise that lowers spending and rationalizes our tax system. Can Romney deliver that? Perhaps. It comes down to the same issue which is Who is Mitt Romney? What's his core. I've met the guy and I don't know.

Doctor Fate wrote:And, you probably don't have their absurd retirement policies (I think it's 52 for many professions).

By the way, Spain's debt is lower than Germany's.

danivon wrote:

Doctor Fate wrote:And, you probably don't have their absurd retirement policies (I think it's 52 for many professions).

Average retirement age in Greece is higher than in Germany. Pensions are, of course, lower.

By the way, Spain's debt is lower than Germany's.

Debt as a percentage of GDP? I thought not.

You thought wrong

Germany 81.2% at end of 2011 linky
Spain 79.2% projected for 2012. linky

Not by much, but it happens to be so, for now.

danivon wrote:Not sure I have. An op-ed quoting another one showing state/offcial retirement ages is not proof of the comparitive actual retirement ages.

However, I found a link that does show the average retirement ages of many countries:Greece's is higher than Germany's. Because Germans tend to retire early while Greeks tend to retire late.

We should be careful not be take Economist editorial at face value, no?

Doctor Fate wrote:

Ray Jay wrote:Re the economy, I would prefer Romney over Obama (I can see that I didn't make that clear), but I'm not confident that Mitt will do this right. He's talking about increasing military spending and lowering taxes which is hard for me to imagine. I think the right answer is a grand compromise that lowers spending and rationalizes our tax system. Can Romney deliver that? Perhaps. It comes down to the same issue which is Who is Mitt Romney? What's his core. I've met the guy and I don't know.

Let me ask you this: who has actually worked with the other party--Romney or Obama?

Isn't it clear that we have a structural problem with our deficits that is due to two things: (1) increased military spending because of 9-11 and (2) the Bush tax cuts? So the answer to solve the budget crisis would be....get rid of the Bush tax cuts and rein in military spending!

Doctor Fate wrote:That chart is for the "effective" retirement in 2000. I don't know how that may have changed or what the measure of "effective" is.

One thing is clear: Greece has relied on Germany to bail her out.

bbauska wrote:If RJ is the POTUS, can I be Sec of Defense or Education? PLEASE???

danivon wrote:

Doctor Fate wrote:That chart is for the "effective" retirement in 2000. I don't know how that may have changed or what the measure of "effective" is.

Well, on that second part, it's defined in the report.

On the first, things may have changed over the last 10 years, but trends tend to be slow. Perhaps you can furnish us with a link to show what the changes are, rather than just relying on what you think should be the case?

One thing is clear: Greece has relied on Germany to bail her out.

Hmmm. More like German banks are relying on Germany to bail Greece out. And of course, Germany has been relying on lower exchange rates to support exports, which makes it a lot easier for them to be able to - especially when those exports are to markets they want to develop in places like... Greece.

It's not as simple as you'd like to think, Steve.

Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.

“I use a hundred different chemicals every day — dyes, ammonia, you name it,” she said. “You think there’s no risk in that?”

“People should be able to retire at a decent age,” Ms. Veremi added. “We are not made to live 150 years.”

Perhaps not, but it is still difficult to explain to outsiders why the Greek government has identified at least 580 job categories deemed to be hazardous enough to merit retiring early — at age 50 for women and 55 for men.

According to research by Jagadeesh Gokhale, an economist at the Cato Institute in Washington, bringing Greece’s pension obligations onto its balance sheet would show that the government’s debt is in reality equal to 875 percent of its gross domestic product, which is the broadest measure of a nation’s economic output. That would be the highest debt level among the 16 nations that use the euro, and far above Greece’s official debt level of 113 percent.

Other countries have obscured their total obligations as well. In France, where the official debt level is 76 percent of economic output, total debt rises to 549 percent once all of its current pension promises are taken into account. And in Germany, the current debt level of 71.9 percent would soar to 418 percent.

Mr. Gokhale, like many other economists, says he believes that this is a more appropriate way to assess a country’s debt level because it underscores the extent to which the cost of providing for rapidly aging populations, if left unchanged, will add to already troubling debt burdens.

“You have to look ahead and see how pension expenditures are rising in comparison to the revenues needed to finance them,” he said. “It’s not just Greece; all major European countries are facing pension shortfalls. It is a very difficult challenge because it involves selling pain to current voters.”

He estimates that to fully finance future pension obligations, the average European country would need to set aside 8 percent of its economic output each year, a practical impossibility given that raising already high taxes so much would impose a crushing economic burden. . . .

In its 2009 annual report on Greece, the International Monetary Fund warned that the government’s excessive pension and health payments to the elderly would result in a debt level of 800 percent of its output by 2050 if left unchecked, similar to the figures Mr. Gokhale calculated. That is a theoretical number, of course: international creditors, who are already balking at lending Greece more money, would require changes in government programs well before Athens borrowed that much.

“The pension crisis is the biggest single test of Greece’s willingness to tackle longstanding reform,” said Kevin Featherstone, an expert on the Greek political economy at the London School of Economics. “Any meaningful reform must lead to reduced benefits for workers — the government needs to show that it can overcome union pressure.”

danivon wrote:Every country would have massive debt if it had to suddenly pay up front all due pensions. But that would only happen if everyone suddenly became 65 and retired, and then lived for thirty years. These numbers are entirely theoretical.