Aging Benefits

When you combine better health care with generous pensions you get (choose one): happy retirees happy politicians insufficiently funded national pension programs the eurozone the United States other   To select an answer let’s begin with 1935. Just passed, the…

Default Deja Vu

Between its independence in 1829 and 2006, Greece has had 5 defaults or debt reschedulings that occupied a total of 50.6 years.  Described by Rogoff and Reinhart in their 2008 paper and book, This Time It’s Different, few nations break…

Greece and Argentina

Nobody wants Greece to become Argentina. It all began with what scholars Rogoff and Reinhart called the lending boom of the 1990s. Enjoying the influx of dollars, Argentina borrowed and grew and prospered…for awhile.  But when recession hit at the…

Debt Compromises

This story is about a country that had massive debt. A recent war had been expensive and the economy had big problems. Still though, powerful political leaders opposed the solution that the Secretary of the Treasury proposed. Yes, the country…

Mixed Euro Zone Metaphors

In this Economist podcast, journalists describe the euro zone debt crisis with a wonderful array of metaphors. (Directly and indirectly, I quote what they said.) Minnows: The smaller peripheral nations in the euro zone, Greece, Ireland and Portugal are minnows.…

Greek Haircuts

When people talk about haircuts and Greece, they are no longer referring to the female beauticians that retired at 50 with a generous state pension because their work was “arduous.” Instead, they are discussing the losses, known on Wall Street…

Celebrating Economic Independence

Alexander Hamilton must have been worried. In 1790, as Secretary of the Treasury, a troubled economy had become his responsibility. He had a huge federal debt to fund, a banking sector that was distressed, and manufacturing to stimulate. Sound familiar?…

A New Drachma?

According to a 2002 BBC report, Greece was the least prepared to make the switch to the euro in 2002. During the transition only 1/6 of all businesses in Greece had received their euros. Now, Greece remains a dysfunctional euro…

Euro-Zone Rates

Please match each of the following countries with its unemployment rate and borrowing rate: Countries: Germany, Greece, Ireland; and the U.S. and the U.K. Unemployment rates: 9.1%, 7.7%, 7%, 15.9%, 14.8% 2-year bond rates: .5%, 4.5%, 1.75%, 29.69%, 12.95% The…

Debt Deja Vu

Again, Greek debt was in the news. This time, though, the focus was other defaults. For as long as nations have existed, they have borrowed money and then been unable to repay it. The first report of Greece defaulting on…