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Actually, it's nothing like what would happen here when the proverbial hits the fan, but ok...
When the inevitably hits the fan here...
ATHENS, Greece (AP) — Greeks earning more than €42,000 ($55,000) per year will now be taxed at a new top rate of 42 percent, under a major new tax reform bill submitted to the country's parliament late Thursday.
Under the new guidelines, the 42 percent top tax rate and earnings threshold replaces the previous level of 45 percent for incomes above €100,000 ($130,770). The new rate is part of a simplification of the country's tax rules. There are currently eight tax bands ranging from 18 percent to 45 percent. These will be replaced by three tax rates: 22 percent, 32 percent and 42 percent.
Greeks earning less than €25,000 ($32,700) a year are set to benefit from the new system in spite of the raise in the basic tax band as the government is proposing to raise the threshold on which income is taxed.
The new tax rates, part of the austerity measures demanded by the country's international rescue lenders, were submitted to parliament hours after the finance ministers from the 17 European Union countries that use the euro agreed in Brussels to restart rescue loan payments. Greece is in line to get €49.1 billion ($64 billion) between now and March, with €34.3 billion of that amount due in the coming days.
Greek finance minister, Yannis Stournaras, presented his colleagues form the other 16 European Union details of his country's long-awaited tax overhaul before the bill was submitted.
In return for the rescue loans, Greece's international lenders have insisted on a series of reforms, tax raises and spending cuts.
But the successive hikes in taxes, required to meet deficit-cutting targets, have hammered the economy, pushing unemployment up to 26 percent, and with more than 20 percent of the population now officially living in poverty — earning less than €7,200 ($9,420) per year.
Conservative Prime Minister Antonis Samaras promised the speedy settlement of state debts and the recapitalization of the country's troubled banks with the money from the new loan installments, while spending €11.3 billion ($14.78 billion) on a debt buyback scheme.
"Today ends a long and difficult period of anxiety for Greece," Samaras told Greek reporters in Brussels.
"It ends the rumors, blackmail and pressures on our country to exit the euro. Today, Greece gained a great opportunity to stand on its feet and get out of the crisis — standing, not kneeling."
Samaras' center-right New Democracy party lost ground to its main rival, the left-wing Syriza Party, according to an opinion poll released late Thursday.
The Public Issue survey for private Skai television gave Syriza a 4.5-point lead, on 30.5 percent, while the extreme right Golden Dawn was in third place with a projected support of 10.5 percent.
It found that more Greeks now have a negative view of the European Union: 50 percent compared to 46 percent with a positive view — a major shift from the respective positions of 37 and 61 percent six months ago.
The survey conducted Dec. 6-10 had a 3.2 percent margin of error. Several other recent polls had given Syriza a 2-point advantage.
Read more: http://www.myfoxny.com/story/2034204...#ixzz2F4Tkm99U
Actually, it's nothing like what would happen here when the proverbial hits the fan, but ok...
Or...
Few countries blew up more spectacularly than Iceland in the 2008 financial crisis. The local stock market plunged 90 percent; unemployment rose ninefold; inflation shot to more than 18 percent; the country’s biggest banks all failed.
This was no post-Lehman Brothers recession: It was a depression.
Since then, Iceland has turned in a pretty impressive performance. It has repaid International Monetary Fund rescue loans ahead of schedule. Growth this year will be about 2.5 percent, better than most developed economies. Unemployment has fallen by half. In February, Fitch Ratings restored the country’s investment-grade status, approvingly citing its “unorthodox crisis policy response.”
So what exactly did Iceland do?
First, they create an aid package for homeowners:
To homeowners with negative equity, the country offered write-offs that would wipe out debt above 110 percent of the property value. The government also provided means-tested subsidies to reduce mortgage-interest expenses: Those with lower earnings, less home equity and children were granted the most generous support.
Then, they redenominated foreign currency debt into devalued krone, effectively giving creditors a big haircut:
In June 2010, the nation’s Supreme Court] gave debtors another break: Bank loans that were indexed to foreign currencies were declared illegal. Because the Icelandic krona plunged 80 percent during the crisis, the cost of repaying foreign debt more than doubled. The ruling let consumers repay the banks as if the loans were in krona.
These policies helped consumers erase debt equal to 13 percent of Iceland’s $14 billion economy. Now, consumers have money to spend on other things. It is no accident that the IMF, which granted Iceland loans without imposing its usual austerity strictures, says the recovery is driven by domestic demand.
What this meant is that unsustainable junk was liquidated. While I am no fan of nationalised banks and believe that eventually they should be sold off, there were no quick and easy bailouts that allowed the financial sector to continue with the same unsustainable bubble-based folly they practiced before the crisis (as has happened throughout the rest of the Western world).
And best of all, Iceland prosecuted the people who caused the crisis, providing a real disincentive (as opposed to more bailouts and bonuses):
Iceland’s approach is very much akin to what I have been advocating — write down the unsustainable debt, liquidate the junk corporations and banks that failed, disincentivise the behaviour that caused the crisis, and provide help to the ordinary individuals in the real economy (as opposed to phoney “stimulus” cash to campaign donors and big finance).Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.
Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.
That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.
And Iceland has snapped out of its depression. The rest of the West, where banks continue to behave exactly as they did prior to the crisis, not so much.
No Dan... it's not that either... The US simply has full control of it's currency and it's debt is only in it's own currency... That's why comparisons with Greece never made sense.
I've posted that for years......so lets print 16 trillion dollars and pay off the debt...
and.......If we did that, would we now be debt free or would we now owe 32 trillion?
You can't do that without bringing massive inflation. That would be the effect of the proverbial hitting the fan for the US.
The US needs to make cuts because while the dollar devalues every year at a somewhat constant rate, our debt is outpacing it.
But overall, I was just pointing out the US and Greece are on very different boats.
I thought is was simply that they refused to bailout the banks.
Link please.
They really did imprison the CEO of a major nat'l bank and a sr. bank regulator board-member.
Explanation why a three-word Google search is harder to type than 1 and 1/2 sentences.
Did imprisoning them fix the economy? They could have simply seized their assets, or anything else that was a real deterrent. Seems to me, they didn't believe in "too big to fail."
They don't, but that doesn't mean they didn't crib notes from the Keynsian playbook by disbursing buckets of money to the polity. But to answer your first question, yes, their measures appear to be working pretty damn well.
A deficit that reached 13.5 percent of gross domestic product in 2009 fell to 2.3 percent last year. The IMF predicts Iceland will have a primary surplus (excluding interest on debt) of 1.5 percent this year.
It wasn't all punitive measures that got them there, of course, but I'm inclined to think the perception of a just rule of law goes a long way towards increasing consumer confidence.
Conservative/VRWC/Repug financial deregulation/non-enforcement, deep, repeated tax cutting, along with UCA push for globalization caused the Banksters Great Depression and the deficit. Reverse all that and the "problem" will be solved.
Don't forget that Iceland had plans to use their excess of geothermal energy. I haven't looked, but I'll bet that is paying off too.
Did a quick search, this looks interesting:
Iceland Attracts New Business with Clean Energy
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