Meaningless Austerity

People on the streets of Greece protest about cuts as an injustice. To outsiders it seems logical and simple, loans are supposed to be repaid right? We could even go as far as to think that "austerity" as a catch phrase is really a spurious term. Your not really being that austere when you insist that people don't spend money they don't have, you're just keeping the deal straight. Austere in as defined in English is

1Severe or strict in manner or attitude: he was an austere man, with a rigidly puritanical outlook

1.1(Of living conditions or a way of life) having no comforts or luxuries: conditions in the prison could hardly be more austere

1.2Having a plain and unadorned appearance: the cathedral is impressive in its austere simplicity

So on first site the vibe of the term actually seems to be screwed in favor of the underdog here. Since when did the mass media start wanting to help out the little guy? On close inspection we can see that the term is planted by the state and an expression of pro money printing.

In Greece there is an overwhelming under tone that austerity is pointless and unfair. When you look at the facts you can start to see how it could be.

• Other countries have higher debt levels
• Other countries have higher debt to GDP ratios
• Other countries benefit from the economic stimulus provided by bailing out Greece. (Germany experiences a manufacturing advantage kind of like china used to from pegging its currency down)
• Greece's s debt is created by high interest rates that are imposed from outside financial industry.
• Greece doesn't have a large financial industry. One that would rely on low interest rates to survive.

All of these points stack. Austerity is meaningless from this perspective. Central to the subject is the ECI "Economic Complexity Index" This is a ranking system set up at MIT that has become popular for macro economic analysis. It measure the sectors and complexity of imports exports on a country. This rating affords Japan its high debt levels with its number one ECI status.

But what does Complexity have to do with credit worthiness? One major issue with this analysis of economies is that it does not include the financial industry! Its understandable that they left it out due to the nature of the industry, it doesn't really produce much, however in developed western countries this industry represents a large part of the economy. So when assessing peoples credit worthiness and deciding their interest rates economists are often excluding the industries which really on low interest rates to operate. But these countries need the low rates the most, in UK this finance makes up to 30% of the economy they could never operate with interest rates like those in Greece.

It all adds up to a big knot. Austerity is simply be a buzz word, there is no such thing. World economics are screwed in favor of those in power, It's a contorted mess from the outside, but from the inside it just sucks. Greece is an example of this money trap, but its at work all over the world. Lets stop playing paper machete countries and send them some bits! Talk to Andreas Antonopoulos