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Scott GrantSmith
Lives in Mira Mesa, CA, USA
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Scott GrantSmith

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Why can't +NPR explain it like this? (Assuming it's close to correct.)
 
Irresponsible or unavoidable borrowing?

Growing up in Europe, I didn't pay much attention to the construction of the Euro, and whatever little I remember has nothing to do with the economics of it. Now, older, having lived in the US for a while, with a Greek wife, I'm looking at the way the Euro is unraveling and I've been using the opportunity to try to figure out how it works (or, rather, why it doesn't).

The core mechanism that allows multiple states to share the same currency is pretty simple: since the weaker states can't devalue their currency to compensate for their trade deficit with the stronger ones, money has to flow from the stronger economies to the weaker ones in order to maintain the balance.

We see that in the US: as measured in GDP per capita, there's about a 2:1 ratio between the strongest states and the weakest ones. To compensate for that, a lot of money flows between states, through the federal government. Most taxes in the US are federal taxes, i.e. about 75%, and the federal government doesn't necessarily spend the money it collects in the exact states where it collects them. As an example, every year about 130 billion dollars paid by California in federal taxes don't make it back into California. Texas and New York are the two other states that have a negative balance of more than 100 billion each. For those 3 states, that outflow on money represents 5.7%, 7.2% and 7.4% of their respective GDPs. California is literally sending money to other states so that those states can buy California stuff. The same is true for Texas, New York, and about 20 of the 50 states that are sending money to the other 30.

Looking back in history, the Marshall Plan followed a somewhat similar logic: the US sent aid to Europe, to allow Europeans to buy US goods, which was both a stabilizing mechanism for European currencies that otherwise were in a devaluation spiral, and an outlet for the huge US industrial production. For reference, the Marshall Plan amounted to 120 billion dollars (in today's dollars) over 4 years, which is tiny compared to the amount of money that the federal government now redistributes across state lines.

We can compare that to the situation in the Eurozone/EU, where the GDP per capita varies by a factor of about 2.3:1. Germany's balance in the EU budget is negative by less than 9 billion Euros. France's and Italy's follow at approximately 6.5 billion and 6 billion. Germany's 9 billion Euros is tiny compared to California's 130 billion dollars, especially since Germany's GDP is 60% larger than that of California. Since the US and EU economies have approximately the same size, that's a reasonably apples-to-apples comparison. The biggest negative balance that a Eurozone country has with the EU is about 0.41% of its GDP. The biggest positive balance is 1.3%. Within the US, only 4 states out of 50 fall within that range.

That's the problem right there: Germany is not flowing enough money out to other Eurozone countries to compensate for its own very strong economy. That's true of other rich European countries as well, e.g. Netherlands, Austria, France.

From the Greek point of view, the only way to get that money to flow in order to maintain balance had been for the government to borrow. That wasn't irresponsible borrowing. That was mechanical, predictable. Greece's poor historical discipline around government finances only accelerated an unavoidable process, but it's not a root cause.

In fact, predictably, pushing Greece into austerity made things worse, much worse: with the root cause being Greece's relatively weak economy compared to the rest of the Eurozone, an austerity approach can only put Greece in a position where it needs even more money to flow in in order to maintain balance.

Even if we assume that all of Greece's debts get somehow forgiven with no further constraints and that Greece manages to run a balanced government budget, it would still be in an unsustainable position in the current Eurozone as its weaker economy would force additional money to flow in. Unless the Eurozone very significantly increases the amount of money that it redistributes across borders, Greece should get out of the Euro at the first opportunity, i.e. literally Monday morning, July 6.

Worse, with Greece out, it's only a matter of time for another weak country to find itself in the same position: that might be Portugal, Spain, Italy, or if Bulgaria, Romania or even Hungary join quickly enough that might go through that same death spiral quickly enough to see the Eurozone as a revolving door, with barely enough time to come in before being back out.

Once that first batch of weak countries is out, there'll always be more that'll be at the bottom of the scale and will find themselves in the same position. France is comfortably in the middle of the pack within Europe today, but attrition will eventually push it toward the bottom, and France having to leave the Euro is a true nightmare scenario for everyone.

In order for the Eurozone to survive, its rich members will need to send a lot more money to the poorer ones: the rich ones literally can't continue reaping benefits from a currency based on the European average without sharing those benefits with the poorer ones that bring that European average down. Otherwise, the Euro will consume country after country until it hits a country that is literally too big to fail.
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Fun!
 
Hey peeps, we hope you guys enjoy this one! If you do, please help us share it with the world.
Oh and your comments are amazing, we love reading them.
WOTE
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John Oliver breaks it down cleverly and clearly. (Not mentioned: the trans immigrant protester removed from Obama's LBGT meeting at the White House.) 
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Shhh! Do you hear it? That quiet, scribbly, tappy sound? That's the sound of a gazillion sermons being rewritten for this Sunday. Some, I'd love to hear. Others, ... not so much.
 
The pride flag has flown for 37 years. Today, we can all understand what it really means. #LoveWins https://goo.gl/QQZFfn
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This goes with the article I posted this morning. 

"I see this all happening and can tell that, as a group, white liberals have made a semi-conscious choice: we are not rocking the boat; we won’t upset or confront other white people; we refuse to take in any information about our own racism. When we do this, we may not feel as though we’re making a choice, but what we’re actually doing, little by little, is prioritizing our own social comfort over equality, justice and the lives of People of Color."
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Scott GrantSmith

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In my 20s I played table-top role playing games. When my kids were pre-teens and teens we played a little bit (though some of it took place while I was at work :-( and I missed out). We could do anything and respond to any input and go anywhere. Yes, there were occasional fights but they were rarely the focus of a session.

On the other hand,I have never enjoyed computer-based (so-called) "RPGs" because it was all about the killin' and all other options seem so peripheral and under-developed.
A few days ago, I reblogged a post that had been circulating Tumblr on the centrality of combat in video games. I’ll link it here, but the gist of the post is a single rhetorical question: isn’t it...
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You've got it right, +Scott GrantSmith 
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Heck, I'd have trouble letting go, too!
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Wait so this should or shouldn't be a life goal? Asking for a friend. >_>
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Our employment system is structured to ensure continued profits for owners and shareholders at the expense of low-wage workers. The costs of supporting people is shifted to the population as a whole through various programs like SNAP and WIC and others.

Every time there's a call change minimum wages or provide some minimal benefit to low wage workers I hear statements on the news from an employer or a trade group representing groups of employers. Every single time, the first thing trotted out is how it will make them have to lay off some of their employees. Be clear: their mandate is to maximize profits and all their crocodile tears and hand-wringing about jobs is pure distraction.

h/t +Cheryl Lindo Jones 
Don't look down on me — look down on the employers who don't pay a living wage.
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There are lots more in the same boat. Unemployment benefits are exceedingly low. In Alaska the maximum benefit is $370.00 per week. Coming from a job that paid me over $800.00 per week, that's nearly 1\3 of what my income was. You've got to take in that 20% for taxes. You want to know what's worse. Alaska didn't raise the benefit levels for unemployment for well over 14 years. Alaska, with the highest cost of living is having one of the lowest for unemployment benefits. http://www.savingtoinvest.com/2015-vs-2014-maximum-weekly-unemployment-benefits-by-state/
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The rainbow flag will never shield my black body from a reckless police officer's bullet.
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My little bit of activism for the day: Suggesting to Google that when anyone searches for "gay marriage" google should ask if they meant to search for just "marriage". Please "up vote" that suggestion if you have a google account. 

https://productforums.google.com/forum/#!topic/websearch/m-UbT2paqL4;context-place=forum/websearch
I love the little hand holding rainbow doodle-ett to the right of the search bar when you enter "Gay Marriage" as a search term on google. One thing I noted was missing: Shouldn't it suggest you search for just "marriage"? Especially in light of today's SCOTUS ruling, and the legalization of ...
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Currently
Mira Mesa, CA, USA
Previously
Leucadia, CA, USA - Spirit Lake, IA, USA
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Visionary Wannabe/Wannabe Visionary
Introduction
Enjoys life and family. Plays Aikido. Uses PCLinuxOS and Android. Shoots Canon. Is Unitarian Universalist. Supports Marriage Equality. Eats Meat. Explores Google Glass
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Level 10 Ingress Resistance Agent
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A convenient and relatively inexpensive place to stop. You may have to ask for the advertised special meals if they aren't in the menu.
Public - 5 months ago
reviewed 5 months ago
I had urgent retinal reattachment surgery here with Dr. Lipson. Considering the scary circumstances (!!!) I felt warmly and competently taken care of by everyone who shepherded me through induction, prep, surgery and post-op. While I do *not* recommend having a detached retina, I *do* recommend this team if you have need of them!
Public - 5 months ago
reviewed 5 months ago
Jacob came at the end of his workday to replace our water heater. He was efficient, professional and personable. I would call Payless again and recommend them to others.
Public - 8 months ago
reviewed 8 months ago
A good team works here. If you're looking for a dentist in the Kearney Mesa area check this out.
Public - 8 months ago
reviewed 8 months ago
16 reviews
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The rich frozen custard is delicious! I'm less of a fan of the Italian ices but that's a personal preference and they do have some interesting flavors, e.g. Gingerbread! The serving size cups *look* small (when you're used to humongous 7-11 slurpees and monstrous Coldstone serving sizes) but they are generous and sufficient.
Public - 7 months ago
reviewed 7 months ago
The "small" calzone is HUGE! It's definitely enough food for two people. The pizzas are great and the antipasto salad is wonderful. Great flavors, generous portions, attentive staff, good prices, nice atmosphere.
Public - 8 months ago
reviewed 8 months ago
My favorite Greek restaurant! An authentic, family-run place. With a wide variety of Greek dishes. They make their own delicious desserts, too! We come here for many family celebrations and we're always warmly welcomed.
Public - 9 months ago
reviewed 9 months ago