Bankruptcy

[poliphilo]

What would it look like for a country to go bankrupt? Greece already has civil unrest, with cabinet ministers being chased down side streets,  policemen being set on fire and the prospect of years of economic hardship to come. Would bankruptcy look any worse than that? Politicians talk about saving the country as if it was in danger of being bulldozed off the map, but what I think they're talking about is saving themselves.  They might indeed have to retreat abroad to spend more time with their Swiss bank accounts (so sad)- but the country of Greece- proud Hellas- with its mountains, islands, people and ancient monuments would still be there.

So Greece- or a country like Greece (it could be Britain the way things are going)- says "OK, I'm bankrupt, now sue me." What happens next?

Comments

[heleninwales.livejournal.com]

G and I have discussed this very question and came to no sensible conclusion. If a company goes bankrupt, it can be sold as a going concern to new management, sold to another company who will asset strip the profitable bits and dump the rest, or closed down completely and the assets sold to pay creditors. How is this going to work with a country?

[poliphilo.livejournal.com]

Exactly. I think Greece is being threatened with the bogeyman- but no-one knows whether the bogeyman is real or not.

[steepholm.livejournal.com]

I don't know about bankruptcy, but the obvious answer would seem to be for Greece to leave the Euro, then devalue its currency. That's what it would have done long ago if it still had the drachma.

[poliphilo.livejournal.com]

And now they're locked into this international system which is actually, I'm inclined to think, not much more than smoke and mirrors. Maybe it would be a good thing if they refused to play pretty- and broke the illusion.

[del-c.livejournal.com]

This is what annoys me when middle class people tremble about how "the rich would leeeave us!" if, as I want, we raised taxes on the rich. Let them. What makes the wealthy wealthy? Their ownership of actual non-movable stuff: land, factories, etc.

If they keep owning that stuff they can keep being taxed on it. If they sell the stuff for a good price, that's because everyone knows the country has a good future. If everyone thinks the country is dooomed by the flight of the rich, then they'll get a lousy price for their former wealth. The only thing they can actually move is the ready cash they got as rent for their wealth, and the solution to that loss surely can't be to let the rent continue, because that's what's known as the sunk costs fallacy.

(and in practice, the rich never do leave, that's a Tory bogeyman)

[poliphilo.livejournal.com]

And if the rich did leave us (alas, woe, Michael Caine no longer graces these shores!) their places would soon be taken by other rich people- who'd spotted the gap in the market. The rich are always with us.

[methodius.livejournal.com]

They don't even have to raise the taxes on the rich, just collect the unpaid taxes that the rich have been evading for years. But the EU and the IMF want to lend them money (the media call it a bail out, but it seems to me that that is increasing the debt, and therefore more likely to sink the boat than make it float) and demand that it be paid back by collecting it from the working class and thepoor, and not from the fat cat tax defaulters.

[veronica-milvus.livejournal.com]

You make no sense I'm afraid. The rich are leaving and it is because of tax. My company is moving 70 of its most senior jobs to Switzerland this year and I will lose my job because I won't go. So I reckon because of that move the chancellor is losing about £2.8 million in income tax and Christ knows how much in corporation tax. Rumours of £300 million have been heard around the office. That's why we need the rich. Because their taxes support people. If they move away, the chancellor has less to spend on you and me.

[aellia.livejournal.com]

I know that violence in protest is not good, but when I see it on the televison,I realise how meek and suppressed the people of our country are.
x

[poliphilo.livejournal.com]

Sometimes street violence is the lesser of two evils.

G.K. Chesteron has a poem about "The people of England, who have not spoken yet". Well, one day maybe they will- and give those who boss them around a jolly good kicking.

[petercampbell.livejournal.com]

Well, there was plenty of unrest during the Thatcher years, and what's coming up is likely to be much more severe for us economically. It'll be interesting to see whether it engenders a type of wartime spirit, or we get the countrywide equivalent of the Brixton riots.

[poliphilo.livejournal.com]

Thatcher chose confrontation. There were other options. This time there aren't. The hardship is going to be severe whichever party winds up running things. Thatcher made me angry, but don't think I will be as angry with a government I know to be acting under compulsion.

[internet-sampo.livejournal.com]

U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

http://www.theonion.com/articles/us-economy-grinds-to-halt-as-nation-realizes-money,2912/

[poliphilo.livejournal.com]

That's beautiful.

Well, so are right triangles, straight lines, longitude and latitude, etc.

[jorrocks-j.livejournal.com]

Just because it's a Symbolic etc. doesn't mean it's not useful, or necessary.

Actually countries ask for forgiveness on their debts all the time, and a lot of times they get it. As I understand it's a process of the creditors writing off some of their debts as bad in hopes of salvagng something from the wreckage, and positioning themselves to re-invest when the debtor nation's economy improves.

Why Greece can't do that here I don't know: I'm assuming it has to do with the legal arrangements which bind it to the EU and the Euro.

Re: Well, so are right triangles, straight lines, longitude and latitude, etc.

[poliphilo.livejournal.com]

I don't really understand this stuff, but I gather Greece's failure threatens the whole Eurozone. The Germans in particular are very cross at having to pay for the rescue.