Greek Tragedy


Khan Academy

Is there a Greek Tragedy currently happening?

Is Greece in the middle of a Depression?

In 1933, the U.S. had an unemployment rate of 25 percent, according to sjsu.edu.

What is it like in Greece?

Tradingeconomics.com states:

“Unemployment Rate in Greece decreased to 24.99 percent in May from 25.58 percent in April of 2015. Unemployment Rate in Greece averaged 14.70 percent from 1998 until 2015, reaching an all time high of 27.91 percent in September of 2013 and a record low of 7.29 percent in May of 2008. Unemployment Rate in Greece is reported by the National Statistical Service of Greece.”

What about the debt?  The video above shows that Greece has had debt of 100% of the value of its GDP.

What is the debt-to-GDP ratio in the U.S. during the Great Depression?

A new debt-to-GDP record of 44% in 1934.  The debt-to-GDP ratio hit its all-time record of 113% by the end of World War II, according to The Atlantic.  The debt-to-GDP ratio was 34.7% in 2000 and 40.5% in 2008.

Tradingeconomics.com writes that “(t)he United States recorded a Government Debt to GDP of 101.53 percent of the country’s Gross Domestic Product in 2013. Government Debt to GDP in the United States averaged 60.81 percent from 1940 until 2013, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974. Government Debt to GDP in the United States is reported by the U.S. Bureau of Public Debt.”

FDR was the president during much of the Great Depression.  The Huffington Post writes that Greece could learn from FDR.

FDR mastered the art of diplomacy and recognized its importance to effective international problem-solving. Despite ideological differences, he engaged constructively with foreign leaders. Unlike Greek Prime Minister Alexis Tsipras in his relations with European counterparts, FDR saw no purpose in grandstanding and posturing. It simply produced no results.

Greek Prime Minister Alexis Tsipras reacts during a voting session at the Parliament in Athens, Greece, July 11, 2015.The Greek parliament voted overwhelmingly on Saturday in favour of authorizing the left-wing government of Tsipras to negotiate with international creditors on the basis of a reform programme unveiled this week. REUTERS/Christian Hartmann   TPX IMAGES OF THE DAY      - RTX1JY9V

According to The Huffington Post, “FDR mastered the craft of statesmanship. Unlike most common politicians, FDR tried to remain above the political fray, pursue the high-road of politics and avoid crass populism. Above all, he placed national interest before personal and party interest.”

“Tsipras’ six-month tenure as prime minister has been marked by populist policies and polarizing rhetoric. He has acted more like Europe’s Hugo Chavez, but without oil and its accompanying largesse and influence.”

However, Tsipras has shown to capability to bend.  Corporate tax and VAT tax (similar to sales tax) will rise, privatizations of companies will be pursued, public sector pay lowered and early retirement phased out.

These things were previously considered “off the table.”

In a speech to Parliament last month, the Greek Prime Minister compared negotiations to a war, in which battles are fought and lost.

“It is our national duty to keep our people alive and in the eurozone”, he said, according to the BBC.

In July, the Greek Prime Minister (Alexis Tsipras) realized the catastrophic toll a Greek exit from the Eurozone would take on his country, according to The Daily Beast.

(Updated post)

http://www.usgovernmentspending.com/debt_deficit_history
http://www.sjsu.edu/faculty/watkins/dep1929.htm
http://www.tradingeconomics.com/greece/unemployment-rate

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