Should American tax payers help bailout EU?

Should American tax payers help bailout EU?

Yes
no
Hell no
I do not know/maybe/other


I say no, **** the EU.


Perhaps this is one of the reasons the media made a big deal out Arizona's anti-illegal immigration law other than their opposition to any anti-illegal immigration law. To distract us while the clowns in office want to give EU 50 billion.


Rep. Pence: US Taxpayers Should Not Have to Bail Out Greece or European Union Nations


Rep. Mike Pence tells Newsmax it’s not the “proper role” for American taxpayers to help bail out a European country any more than it’s proper to expect Europe to bail out a fiscally strapped U.S. state.

The Indiana Republican warns that taxpayers could be stuck with a $50 billion tab for a broad European bailout. And he says that voters can begin the process of repealing Obamacare by voting in a Republican majority in Congress this year.


US Exposure to EU Bailout: $50 Billion and Counting - Yahoo! Finance

US taxpayers could be on the hook for $50 billion or more as part of the European debt bailout, which is likely to be a close cousin to the strategy used to rescue the American financial system.

We can definitely help by actively increasing our export purchases where we can. We should NOT hand them money without a commodity in return.

What effect will a bankrupt EU have on the US economy and can we make a profit off it?

megaprogman said:

What effect will a bankrupt EU have on the US economy and can we make a profit off it?

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A bankrupt EU can't spend on national defense and would leave us in a position to finally shut France up for good.

jallman said:

A bankrupt EU can't spend on national defense and would leave us in a position to finally shut France up for good.

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I was more concerned about potentially losses in some of our exports hurting our industries. But even if France was bankrupt, I am willing to bet that they will somehow pony up the cash for cultural projects such as their national institute which controls the language (forgot the name of it) and hiring fashion designers to design uniforms for their police.

I was against American taxpayers bailing out America. You can imagine how I feel about us bailing out Europe.

They're making my stocks go down. I don't like them, so **** bailing them out. :2razz:

Plus, I didn't think we should bail out our own country's businesses. Why in the HELL would I be okay bailing out another country's?

I guess the big question is...did they help us with our bail out? If they did, then maybe we owe them one. If they didn't, though, **** 'em.

I'm no fan of bailing anyone out, but I can clearly see the imprint of Dirk Gently's philosophy on all of this.

In today's global economy, the fundamental interconnectedness of all things exists. Don't know what we can do about it at this point in the game, but I do believe there's a potentially disastrous systemic risk to consider.

It does not look like it will be the American tax payer?

The US exposure to the European debt bailout could be at least $50 billion, but the chance of taxpayers actually being on the hook for that appears remote. - US Exposure to EU Bailout Is Big But Risk Is Limited

jamesrage said:

Perhaps this is one of the reasons the media made a big deal out Arizona's anti-illegal immigration law other than their opposition to any anti-illegal immigration law. To distract us while the clowns in office want to give EU 50 billion.

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Yeah, because everyone forgets what's happening in the rest of the world when the media spends much of its time talking about Arizona...

jamesrage said:

Rep. Mike Pence tells Newsmax it’s not the “proper role” for American taxpayers to help bail out a European country any more than it’s proper to expect Europe to bail out a fiscally strapped U.S. state.

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We loan countries money all the time. Just because these politicians strap the word "bailout" to the name doesn't make it any different than a loan. And lets not forget that by loaning money to countries we can make money off of the interest.

I said "maybe", depending on how badly they need our help. The world came to our aid when we needed a "bailout".

jamesrage said:

The Indiana Republican warns that taxpayers could be stuck with a $50 billion tab for a broad European bailout. And he says that voters can begin the process of repealing Obamacare by voting in a Republican majority in Congress this year.

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What does this have to do about the EU bailout?

We shouldn't bail out the EU. They chose to spend and bankrupt themselves. Aren't they the ones screaming that America needs to get out of other nations? Maybe they should apply it to themselves and their financial status. The EU is very critical of US foreign policy and says we butt in nations too much, so by their rhetoric we need to distance ourselves from their financial woes and let them deal with it. We have no business bailing out the EU.

Jucon said:

We loan countries money all the time. Just because these politicians strap the word "bailout" to the name doesn't make it any different than a loan. And lets not forget that by loaning money to countries we can make money off of the interest.

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Loaning them money at below market rates is definitely a bailout, to add to that if the interest rate stays below the rate of inflation we would be losing money on it.

YES! Print more money and give it to them! What could go wrong!? Hey look that funny red number just got bigger! *Rips bong*

Even considering giving money to foreign notions should be enough for grounds to drug test everyone in DC

jamesrage said:

Should American tax payers help bailout EU?

Yes
no
Hell no
I do not know/maybe/other


I say no, **** the EU.

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Well, this is what the United States gets for wanting to be a world leader, involving itself in the affairs of others and tying itself up with commitments to the UN and the IMF:

Other countries get a say in a decision that affects US taxpayers. Oh, snap.

You realize, of course, that US politicians love situations like this. They get to nay-say, which is popular with the folks at home, while reaping with the rest of us the benefits of good outcomes, and being politically insulated from the fall-out of bad outcomes.

Gibberish said:

We can definitely help by actively increasing our export purchases where we can. We should NOT hand them money without a commodity in return.

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We should continue making purchases with only one end in mind, getting the best value for dollar spent.

Period.

The other thing we should focus on is forcing the drastic reductions in the US governments, at all levels, to avoid becoming the next Greece-spot on the fabric of history.

Scarecrow Akhbar said:

We should continue making purchases with only one end in mind, getting the best value for dollar spent.

Period.

The other thing we should focus on is forcing the drastic reductions in the US governments, at all levels, to avoid becoming the next Greece-spot on the fabric of history.

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And for some reason our nation's leaders dont understand this...

Scarecrow Akhbar said:

We should continue making purchases with only one end in mind, getting the best value for dollar spent.

Period.

The other thing we should focus on is forcing the drastic reductions in the US governments, at all levels, to avoid becoming the next Greece-spot on the fabric of history.

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And yet people from all sides refuse to make cuts to Medicare, Medicaid, Social Security and Military spending... which combined takes up the majority of our federal spending. :doh

Seems to me like most people only want things cut that they don't directly benefit from. That's why it's so hard to make cuts in government. There's always people who refuse to give an inch.

No. It's throwing good money after bad.

I voted yes.

There's this funny thing going on called 'globalisation' that reaches into everyone's lives. It lets you buy cheap ****ty products from China that you don't need, it lets you talk to your long distance partner on Skype, it enables you to peddle your wares on a global scale and in doing all those things it brings people together. But unfortunately, sometimes an element of that system, whether a good or a bad element, backfires. When that happens, it's not on for people to suddenly return to an isolationist mindset and say, 'well, they can just help themselves out,' because unfortunately the world does not operate that way any more.

An element of all this is that (obviously) capital is highly mobile. Whether people like it or not, the financial interdependence of the world nowadays is such that a crisis in one place equals a crisis everywhere. Let me go on the record and say that the Greek government (whoever was running them over the last decade or so, both right and left parties) was stupendously stupid for running up a huge deficit and debt and I don't condone that in any way. However, they have created a malignant cancer. If it's not cut out, it's going to spread. It is simply not enough for people to say "well, I don't like that there's a cancer, so I'll just let it remain," in the hope that things will magically get better.

The argument against the US bailouts was premised partly on the idea that if a corporation stuffs up, it should be made to collapse. No moral hazard, no bailouts. However, what we are dealing with here is a government, NOT a corporation. And last time I checked, the business of governing in itself was not an element of a free-market system. But one thing is clear: financial markets have taken a look at Greece's problems, and they are not liking it.

Look at the level of fear worldwide when Greece had its credit rating downgraded. People know that Greece is not the only problem country: all the PIGS countries are at risk. The cancer could easily spread. The only response if we allowed to Greece to default on its debt would be more fear, more economic strife. If such a thing were to occur, the problems for the other PIGS countries would multiply and the situation would only get worse.

So there are two choices: don't authorise a bailout, and open the door to the possibility of yet another financial collapse. More unemployment. More wealth lost. And I bet that would leave the people who stood there, middle finger raised, telling the Greeks to **** off, looking pretty silly. OR: bail them out (even if this in itself is not exactly an ideal solution) and stem the risk; cut out the cancer. It makes sense to me.

If the IMF as a whole decides that it wants to bailout the EU I think we have an obligation to go along. However, I don't know if this is under consideration or even warrented at the moment. If it looks like a default could cause a catagion it might be wise and in the end cheaper to do so.

rivrrat said:

They're making my stocks go down. I don't like them, so **** bailing them out. :2razz:

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There's the possibility that bailing them out will make your stocks go up.

Yossarian said:

I voted yes.

It is simply not enough for people to say "well, I don't like that there's a cancer, so I'll just let it remain," in the hope that things will magically get better.

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Throwing money at a country who is suffering due to years spent under a corrupt government isn't going to magically make it better, either.

So there are two choices: don't authorise a bailout, and open the door to the possibility of yet another financial collapse. More unemployment. More wealth lost. And I bet that would leave the people who stood there, middle finger raised, telling the Greeks to **** off, looking pretty silly. OR: bail them out (even if this in itself is not exactly an ideal solution) and stem the risk; cut out the cancer. It makes sense to me.

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Oh, there are more than two choices out there. Actually I don't buy either of your two choices. I wouldn't hold up my finger to them or bail them out. The first is just rude and the 2nd won't help in the long run because the problem is their corrupt government. Giving a corrupt government money doesn't do anything but make a corrupt government that much richer.
We're not part of the EU, which was formed in part to compete with us, don't forget. They knew the risks going in when they formed the EU. Healthier countries (in the EU) might get pulled down by weaker countries (in the EU). *WE* didn't sign up for that! The choice I favor is staying the h*ll out of it because it's not up to us to change the government of Greece. Maybe the EU can have some effect on that?? I don't know. We're not in the EU.

Yossarian said:

I voted yes.

There's this funny thing going on called 'globalisation' that reaches into everyone's lives. It lets you buy cheap ****ty products from China that you don't need, it lets you talk to your long distance partner on Skype, it enables you to peddle your wares on a global scale and in doing all those things it brings people together. But unfortunately, sometimes an element of that system, whether a good or a bad element, backfires. When that happens, it's not on for people to suddenly return to an isolationist mindset and say, 'well, they can just help themselves out,' because unfortunately the world does not operate that way any more.

An element of all this is that (obviously) capital is highly mobile. Whether people like it or not, the financial interdependence of the world nowadays is such that a crisis in one place equals a crisis everywhere. Let me go on the record and say that the Greek government (whoever was running them over the last decade or so, both right and left parties) was stupendously stupid for running up a huge deficit and debt and I don't condone that in any way. However, they have created a malignant cancer. If it's not cut out, it's going to spread. It is simply not enough for people to say "well, I don't like that there's a cancer, so I'll just let it remain," in the hope that things will magically get better.

The argument against the US bailouts was premised partly on the idea that if a corporation stuffs up, it should be made to collapse. No moral hazard, no bailouts. However, what we are dealing with here is a government, NOT a corporation. And last time I checked, the business of governing in itself was not an element of a free-market system. But one thing is clear: financial markets have taken a look at Greece's problems, and they are not liking it.

Look at the level of fear worldwide when Greece had its credit rating downgraded. People know that Greece is not the only problem country: all the PIGS countries are at risk. The cancer could easily spread. The only response if we allowed to Greece to default on its debt would be more fear, more economic strife. If such a thing were to occur, the problems for the other PIGS countries would multiply and the situation would only get worse.

So there are two choices: don't authorise a bailout, and open the door to the possibility of yet another financial collapse. More unemployment. More wealth lost. And I bet that would leave the people who stood there, middle finger raised, telling the Greeks to **** off, looking pretty silly. OR: bail them out (even if this in itself is not exactly an ideal solution) and stem the risk; cut out the cancer. It makes sense to me.

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Overall, I agree with your post, or at least concede that you might be correct. However, the part I bolded, about the 'moral hazard'. I disagree with you and judge that it applies whether it is a corporation or country. Governments are charged with responsibly seeing to the prosperity of their people. If they take large risks and then are bailed out when it blows up in their face, we are essentially taking 'Risk' and placing it in the commons.

What this does is allow all nations, just like corporations, to ignore risk when making financial decisions. They know they can externalize the consequences of risk taking. This has a high potential for an even larger catastrophe. If all nations know that they can externalize risk, some will fall to temptation and take on too much. At first, those that do so will be the most competitive. Others could be tempted to make the same calculation and follow suit, just in order to compete. This would be a downward spiral leading to utter catastrophe. In essence, a new take on the tragedy of the commons, one with very dire consequences.

There is one vital difference in bailouts to nations as opposed to corporations: You can practice tough love and force errant nations to agree to austerity measures, as the EU is rightly doing in the case of Greece. You can't do this with the people who profit from errant corporations, at least not effectively. With corporations, the people who profited have probably already sold their stock in the company, after all. The people that austerity measures hurt when applied to corporations are mostly the workers. They are the ones who lose their jobs during an economic downturn. Why should they be punished for decisions made by top management.

So, at least in the case of nations, we can push for the people of those nations to endure the consequences of not having elected good government. We pretty much avoid the moral hazard that way. And therefore, I would be for bailouts for nations (as long as austerity is part of the package) before I would be for bailouts for corporations.

As a postscript, I would add this food for thought: I have heard neurosis described as the avoidance of necessary pain. When a pathology of avoidance is set up, it is inevitable that far greater pain will be felt down the path. It seems to be that it is the human condition that it is necessary for us to feel pain, on occasion, and that when we avoid it, either personally or collectively, we end up worse off.

Dix said:

Throwing money at a country who is suffering due to years spent under a corrupt government isn't going to magically make it better, either.

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Well yeah...why is why the EU/IMF are specifically stipulating strict austerity measures to rein in government spending if Greece and other countries want to receive their bailout money.

Dix said:

Oh, there are more than two choices out there. Actually I don't buy either of your two choices. I wouldn't hold up my finger to them or bail them out. The first is just rude and the 2nd won't help in the long run because the problem is their corrupt government. Giving a corrupt government money doesn't do anything but make a corrupt government that much richer.
We're not part of the EU, which was formed in part to compete with us, don't forget. They knew the risks going in when they formed the EU. Healthier countries (in the EU) might get pulled down by weaker countries (in the EU). *WE* didn't sign up for that! The choice I favor is staying the h*ll out of it because it's not up to us to change the government of Greece. Maybe the EU can have some effect on that?? I don't know. We're not in the EU.

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The choices are to either bail them out or not. The only variables are how much money to give them and what conditions are placed on its provision.

But 'we' (that is the US and Oz as well) are both part of this world financial system which may very well collapse horribly all over again if we fail to act on it. In realist terms, we're not doing it to help out Greece or the EU. In a morally perfect world they should atone for their own sins. We're bailing them out to help ourselves.

Also I should probably add that the IMF is an international institution (even if the US has veto power insofar as voting is concerned) and as far as I know the bailout money is coming from several countries within the IMF (don't know for sure though). So the U.S. isn't bailing anyone out per se if that is the case.