Hacker News Reader

Comment by Joeri | Hacker News Reader

I find it striking that there was a recovery in 2010, after which the austerity measures were implemented, which were then followed by a downward slide. I have never understood why any sane economist is in favor of austerity measures while it has been shown that every time they plunge the economy into recession making it harder to pay back debts.

View on HN

>I have never understood why any sane economist is in favor of austerity measures

That can be attributed to the influence of wealthy business lobbies. Austerity puts downward pressure on wages, which in turn creates upward pressure on profits.

Economists, like everybody else, respond to incentives.

That makes no sense. All businesses suffer along with the rest of the economy when flow of money dries up. It's not just lower wages, it's lower sales, profits and for those business kept afloat by financial leverage, such crisis often mean complete death.

>All businesses suffer along with the rest of the economy

A) The relative position of the owners still improves.

http://isites.harvard.edu/fs/docs/icb.topic620591.files/Indi...

B) Businesses in the rest of the Eurozone can reap the benefits of suppressed Greek wages (in the form of a more cut-throat labor market), without facing the consequences of lower demand themselves.

Perhaps they should get less tanks and use the better their money? Greek has more tanks than Germany and France together. A huge army for a little country.

The Nato is not a friend of this thought and warned Greece not to save on defense. http://panteres.com/2015/06/30/nato-jens-stoltenberg-warns-g...

France and Germany don't have hostile neighbors. I bet Greece also spends a lot on its Navy and Air Force.

It's prudent considering their neighbors...

What would you have done? They have tons of problems. I mean, who will give them money now given that they're telling their creditors, "And I shall wear the creditors’ loathing with pride"? There was that kickstarter to donate to them but...

Reply on news.ycombinator.com