So just perpetual expansion for ever and ever? I don't know why having a balanced budget is such a bad thing. Increasing the money supply simply devalues all the existing money, essentially a property tax.

I wish she had used some real numbers, say it's 2030 and the debt is 26 trillion, and you are starting to get some huge deficits to pay for social security. Keep borrowing and by 2050 pay 50% of your budget in interest payments? Start printing money and by 2050 have an inflation rate of 8%? If the gov't needs to run continual deficits, why not just keep a balanced budget then drop cash out of helicopters on the 4th of July? Same money added to the system.

Really disappointed she didn't mention the Federal Reserve. Why is the US paying interest to a private entity that creates money out of thin air? Are they more credit worthy than a government that can also create money out of thin air?

@RedSky

First, if it were up to me, you could take over as Minister of Finance in this country tomorrow. Our differences seem miniscule compared to what horrendous policies our last three MoF have pushed. The one prior, ironically, was dubbed the most dangerous man in Europe by The Sun.

We're in agreement on almost everything you mentioned in your last comment, so I'll focus on what I perceive differently.

First, I'd differentiate between fiscal stimulus and fiscal spending, the former being a situational application of the latter. As you said, fiscal stimulus during an economic crisis tends to be inadequate with regards to our macroeconomic objectives. You can neither whip out plans for major investments at a whim nor can you mobilize the neccessary resources quickly enough to make a difference and still be reasonable efficient. Not to mention that it only affects certain parts of the economy (construction, mostly), leaving others completely in the wind. So I'm with you on that one, it's a terribly inefficient and ineffective approach.

Automatic stabilizers work magnificently in this regard, but they barely take any pressure from the lower wage groups, especially if unemployment benefits come with a metric ton of strings attached, as is the case in Germany. A basic income guarantee might work, but that's an entirely different discussion.

The problem I see with merely relying on reasonable automatic stabilizers in the form of payments is that they do put a floor into demand, but do very little to tackle the problem of persistent unemployment due to a lack of jobs. As useful as training and education are, the mere number of highly educated people forced to work mundane jobs tells me that, at best, it doesn't work, and at worst pushes a systemic problem onto the individual, leading to immense pressure. Not to mention the psychological effects of being unemployed when employment is tauted as a defining attribute of a proper person -- aka the demonization of the unemployed.

It's still somewhat decent in Australia, but in Europe... it's quite a horrible experience.

Anyway, my point is that I'd rather see a lot more fiscal spending (permanent!) in the shape of public sector jobs. A lot of work cannot be valued properly by the market; should be done without the expectation of a return of investment (hospitals, anyone?); occurs in sectors of natural monopolies -- all of that should be publicly run. A job guarantee, like your fellow countryman Bill Mitchell advocates quite clearly, might be an approach worth trying out. Economy in the shit? More people on the public payroll, at rather low (but living wage!) wages. Do it at the county/city level and you can create almost any kind of job. If the private sector wants those people instead, they'd have to offer better working conditions. No more blackmail through the fear of unemployment -- you can always take a public job, even if it is at a meagre pay.

I should probably have mentioned that I don't buy into the notion of a stable market. From where I am standing, it's inherently unstable, be it through monopolies/oligopolies, dodging of laws and regulations (Uber), impossibility to price-in externalities (environmental damage most of all) or plain, old cost-cutting leading to a system-wide depression of demand. I'm fine with interfering in the market wherever it fails to deliver on our macroeconomic objectives -- which at this point in time is almost everywhere, basically.

Healthcare is all the rage these days, thanks to the primaries. I'd take the publicly-run NHS over the privately-run abomination in the US any day of the week. And that's after all the cuts and privatizations of the last two decades that did a horrible number on the NHS. Fuck ATOS, while we're at it.

Same for the railroad: the pre-privatization Bundesbahn in Germany was something to be proud of and an immeasurable boost of both the economy and the general standard of living.

In the mid/long run, the effects of automation and climate change-induced migration will put an end to the idea of full employment, but for the time being, there's still plenty of work to be done, plenty of idle resources to be employed, and just nobody to finance it. So why not finance it through the printing press until capacity is reached?

As for the Venezuela comparison: I don't think it fits in this case. Neither does Weimar Germany, which is paraded around quite regularly. Both Venezuela and Weimar Germany had massive supply-side problems. They didn't have the production capacity nor the resources to meet the demand they created by spending money into circulation. If an economy runs at or above its capacity, any additional spending, wherever it comes from, will cause inflation. But both Europe and the US are operating faaar below capacity in any measurable metric. You mentioned LRAS yourself. I think most estimates of it, as well as most estimates of NAIRU, are off quite significantly so as to not take the pressure off the wage slaves in the lowest income sector. You need mass unemployment to keep them in line.

As you said, the participation rate is woefully low, so there's ample space. And I'd rather overshoot and cause a short spike in inflation than remain below potential and leave millions to unneccessary misery.

Given the high level of private debt, there will be no increase in spending on that front. Corporations don't feel the need to invest, since demand is down and their own vaults are filled to the brim with cash. So if the private sector intends to net save, you either have to run a current account surplus (aka leech demand from other countries) or a fiscal deficit. Doesn't work any other way, sectoral balances always sum up to zero, by definition. If we want to reduce the dangerous levels of private debt, the government needs to run a deficit. If we don't want to further increase the federal debt, the central bank has to hand the cash over directly, without the issuance of debt through the treasury.

As for the independant central bank: you can only be independant from either the government or the private sector, not both. Actually, you can't even be truly independant from either, given that people are still involved, and people have ideologies and financial ties.

Still, if an "independant" central bank is what you prefer, Adair Turner's new book "Between Debt and the Devil" might be worth a read. He's a proponent of 100% reserve banking, and argues for the occasional use of the printing press -- though controlled by an inflation-targeting central bank. According to him, QE is pointless and in order to bring nominal demand up to the level we want, we should have a fiscal stimulus financed by central bank money. The central bank controls the amount, the government decides on what to spend it on.

Not how I would do it, but given his expertise as head of the Financial Services Authority, it's quite refreshing to hear these things from someone like him.

I would argue that automation still isn't the job killer #1. Plain old political decisions, such as sound finance, deficit hawkery, and austerity lead by a mile in this category. Neither is being addressed properly, but I find it hard to focus on the employment effects of automation when the Eurozone, for instance, runs at >10% unemployment strictly due to policies enacted by (non-)elected officials. We don't need technology to cause mass unemployment, humans can do that all on their own.

Additionally, even the amount of work available is a matter of perspective. Within the current system, the number of jobs with a decent salary is already dwarfed by the number of people looking for one. The amount of work to be done, on the other hand, is not.

Case in point: our (read: German) national railroad company is short-staffed by about 80.000-100.000 people, last I checked; our healthcare system is short-staffed by at least 200.000 people, probably a lot more; law enforcement is short by about 50.000; education is short by at least 20.000. Let's not even talk about infrastructure or ecological maintenance/regeneration. These are not open positions though, because nobody is willing/able to pay the bill.

So while I agree that we should be discussing how to deal with technological change, a more pressing matter is either to alter the system or to at least take back control over the vast sums of dead currency floating around in the financial nirvana or on Stephen Schwarzman's bank accounts. First stop: full employment. Then, gradually, guaranteed basic income when automation does, in fact, cause mass unemployment.

Finally, I don't think automation will do as quick as sweep as some presume. The quality of software in commercial machines is quite absymal in many cases, since it was written in the normal fashion: do it now, do it quickly, here's five bucks. Efficiency improvements generally come at the price of QA, and it shows. Europe's most modern railway control center is nearby, and it never went online -- Bombardier cut corners and never had the proper railway expertise to begin with. Meanwhile, the center build in '53 is working just fine, and so are the switches put in place when Wilhelm II was running the show.

Edit: That said, I'm thrilled to see mind-numbing labour being replaced by machines. Can't happen quickly enough.

Apologies, I got carried away... wall of text incoming.

@RedSky

I agree, monetary policy at low rates has very little to offer in terms of economic stimulus. Then again, the focus almost solely on monetary policy is part of the problem. Fiscal policy can have a massive impact, both directly (government purchases of goods and services) and indirectly (increase in automatic stabilizers). But for that you either need to be in control of your central bank, so that you can engage in Overt Monetary Financing ("printing" money). Or you need the blessing of the private banks, which is particularly true for a Vollgeld system.

The budget is the core of a parliamentary democracy, and to be at the whim of the folks at Deutsche Bank, HSBC or Credit Suisse -- no, thank you very much. We saw how that played out in Greece.

Anyway, the central bank can do miraculous things: if it provides funds to the democratically elected body in charge of the budget, aka parliament/the government. Trying to "motivate" the private banks to stock up on cheap reserves to stimulate lending is just a sign of ideology.

The great Michal Kalecki, in his essay The Political Aspects of Full Employment, summarized the general issue of government spending quite clearly. The industrial leaders stand in opposition to government spending aimed at full employment for three distinct reasons: a) dislike of government interference in the problem of employment as such; b) dislike of the direction of government spending (public investment and subsidizing consumption); c) dislike of the social and political changes resulting from the maintenance of full employment.

I'd say control over your currency is too great a tool to leave it in the hands of unelected managers. Clement Attlee knew very well why he had to nationalize the Bank of England in '46.

Back to the issue of inflation, I'd like to make two points. First, how big a role should inflation really play when talking policy. Second, what's the influence of a central bank on inflation.

Where does it come from, this focus on inflation. People usually talk about government spending when discussing inflation. Private spending is rarely brought up, even though it can be just as inflationary. So let's ignore private spending for a moment and talk purely government spending: should a deficit/surplus not be judged primarily by how well it helps us achieve our macroeconomic goals? Or more clearly, why should we sacrifice full employment or our general welfare on the altar of inflation? Yes, that's over the top. But so is the angst of inflation.

I'd say let's stick with Abba Lerner's concept of functional finance and judge deficits/surpluses purely by how well they help us achieve our macroeconomic goals. Besides, the US has run massive deficits during the GFC, so much in fact, that a great number of monetarists saw hyperinflation just around the corner. Still waiting for it. Same for Japan. Massive deficits... and deflation.

As long as spending, both private and government, doesn't push the economy beyond its limits (full employment, real resources, production capacity), out-of-control inflation just doesn't materialize. Plus, suppressing inflation is actually one thing central banks can do quite well. Unlike causing inflation, which both Japan and the EU are showcases off. Draghi can dance naked on the table, monetary policy (QE, mainly) won't push inflation upwards.

Which brings me to the second point: what's inflation, what's the cause of inflation, how can central banks manipulate it.

CPI is often used as a measure of inflation, but I prefer the GDP deflator. CPI doesn't account for externalities that you cannot influence, whatever you do. Prime case: the price of oil. Monetary policy of the Bank of Sweden has no influence on the price of oil. The GDP inflator, however, accounts for every economic activity within your currency zone -- much more useful.

General theory says, this measure of inflation goes up when demand surpasses supply. And vice versa. The primary factor of demand is domestic purchasing power, therefore wages. If you suppress wages, you suppress inflation. If you push wages, you push inflation. More specifically, you can see a direct correlation between unit labour costs and the GDP deflator in every country at any time. Here's a general graph for multiple countries, and the St. Louis FED provides a beauty for the US.

That's why it's easy for central banks to combat inflation, but almost impossible to fight deflation.

As always, my views are just a layman's perspective with no claims to expertise.

@RedSky

You correctly point out the intent of the reform, to stop fractional banking which they diagnosed as a primary driver of volatility within the financial sector. They want to revert back to a system where the banks were intermediaries the way you described it: deposit leads to loan, in this case at a maximum ratio of 1:1, no leveraging.

Unlike the current system where bank deposits are mostly created by banks themselves -- the act of lending creates deposits. In fact, deposits are liabilities of the banks, not assets. Reserves are assets, but they are only traded between entities with accounts at the central bank. And, in normal times, are provided quite freely by the central bank in exchange for other assets.

Anyway, "Vollgeld" places the ability to create money exclusively in the hands of the central bank. Controlling the amount of money in circulation was a concept most central banks were eager to drop during the '90s, since it never worked. Demand for credit is volatile, central control is inflexible, even if they could somehow quanfity the need for it ex ante -- which they can't. Hell, they can't even do it ex post. You can't quantify the need for additional money beyond what's already in circulation if the central bank's action set the conditions for a dynamic development in the first place. You can't know in advance what increases in production need to be financed, you can't know how demand for liquidity evolves over time. The quantity theory of money was buried for a reason, it ignores reality.

Anyway, I applaud the proponents of Vollgeld for pointing out the dysfunctionalities of our fractional reserve system as well as how questionable it is, ethically, to hand over so much power to a small cabal of financial elites. In fact, I'm quite ecstatic to hear them point out that a nation with a sovereign, free-floating currency does not need to finance deficits through banks -- how very MMT of them. Go OMF!

But their proposed solutions are a fallback to "the market will stabilise itself if left alone, a completely independant central bank will keep the quantity of money in circulation at just the right amount". This hands-off approach resulted in absolute devastation whenever it was applied. They want to turn the state into a regular economic subject that has to adapt to the amount of money currently in circulation. It's (the illusion of) control by technocrats, where you get to disguise policies against the masses as "economic neccessities". Basically the German Eurozone on steroids.

As for the absolute independence of the central bank: you are right, that is not strictly part of the Swiss Vollgeld initiative. But it's what almost every proponent of Vollgeld within the German-speaking circles argues for, including major drivers behind the initiative. Can't let politicians have control over our central bank or else they'll abuse it for populist policies.

They are true believers in technocrat solutions, completely seperate from democratic control.

PS: I cut down my ranting to a minimum of MMT arguments, given that many people see it as just a different sort of voodoo economics.

Edit: Elizabeth Warren's 21st Century Glass Steagal Act strikes me as a rather promising way to solve a great number of problems with the financial industry without going back into the realm of monetarism.

Italy:
Renzi is creating the conditons for a new bubble? Through deficit spending on... what? Unless they start building highways in the middle of nowhere like they did in Spain, I don't see any form of bubble coming out of deficit spending in Italy. The country's been in a major recession for quite some time now, with no light at the end of the tunnel and a massive shortfall in private spending. But meaningful deficit spending requires Renzi to tell Germany and the Eurogroup to pound sand -- not sure his balls have descended far enough for that just yet.

Referendum in Switzerland:
"Vollgeld". That's the German term for what the initiators of this referendum are aiming for: 100% reserve banking. It's monetarism in disguise, and they are adament to not be called monetarists. But that's what it is. Pure old-fashioned monetarism. Even if you don't give a jar of cold piss about all these fancy economic terms and theories, let me ask you this: the currency you use is quite an important part of all your daily life, isn't it? So why would anyone in his or her right mind remove it entirely from democratic control (even constitutionally)?
If you want to get into the economic nightmares of it, here are a few bullet points:
- no Overt Monetary Financing (printing money for deficit spending) means no lender of last resort and complete dependence on the market, S&P can tell you to fuck off and die as they did with PIIGS
- notion that the "right amount of money in circulation" will enable the market to keep itself in balance -- as if that ever worked
- notion that a bunch of technocrats can empirically determine this very amount in regular intervalls
- central bank is supposed to maintain price stability, nothing else -- single mandate, works beautifully for the ECB, at least if you like 25% unemployment
- concept is founded in the notion that the financial economy is the source of (almost) all problems of the "real" economy, thereby completely ignoring the fact that decades of wage suppression have simply killed widescale purchasing power of the masses, aka demand

Visegrad nations:
From a German perspective, they are walking on thin ice as it is. The conflict with Russia never had much support of the public to begin with, but even the establishment is becoming more divided on this issue. Given the authoritarian policies put in place in Poland recently and the utter refusal to take in their share of refugees, support might fade even more. If the Visegrad governments then decide to push for further conflict with Russia, Brussels and Berlin might tell them, very discreetly, to pipe the fuck down.

Turkey:
Wildcard. He mentioned how they will mess with Syria, the Kurds and Russia, but forgot to mention the conflict between Turkey and the EU. As of now, it seems as if Brussels is ready to pay Ankara in hard cash if they keep refugees away from Greece. Very similar to the deal with Morocco vis-a-vis the Spanish enclave. As long as they die out of sight, all is good for Brussels.

I would add France as a point of interest:
They recently announced that the state of emergency will be extended until ISIS is beaten. In other words, it'll be permanent, just like the Patriot Act in the US. A lof of attention has been given to the authoritarian shift of politics in Poland, all the while ignoring the equally disturbing shift in France. Those emergency measures basically suspend the rule of law in favour of a covert police state. Add the economic situation (abysmal), the Socialist President who avoids socialist policies, and the still ongoing rise of Front National... well, you get the picture.

Regarding the EU, I'll say this: between the refugee crisis (border controls, domestic problems, etc) and the economic crisis, they finally managed to convince me that this whole thing might come apart at the seams after all. Not this year, though, even if the Brits decide to distance themselves from this rotten creation.

ive never been to the middle east, but for various reasons had friends from several different countries in and around the area. i think the answer is simple: muslims, like christians, jews, mormons are not all alike (ok not sure about the mormons!), and even if you have a st augustine or a ghazali saying thats how it should be there will always be those who disagree, vocally or quiet like. Hes right that the culture changed, and he's right that its tragic that arab scientists are basically the butt of a joke, but i think its difficult to ommit that the peak of arab science also coincided with a peak in their power and resources. How many african nobel prizes are there in that period? or from indigenous peoples? Im not saying they are stupid, just that its difficult to get an award for cutting edge top notch science when you are at a serious deficit in resources.

That conveniently leaves out the fact that income tax rates have plummeted since the 1940s. That's been the big consistent change, not the government increasing spending as a percentage of GDP, which wildly fluctuates.

The reason why there's a fight to get this funded is because there's a portion of this country that thinks you must pay for every new expenditure by cutting spending elsewhere because the national debt will kill us if it doesn't come down, and taxes can never ever ever ever ever be raised ever ever ever ever. They will absolutely never consider that raising taxes is worth funding anything, and are completely okay with cutting funding for things that are even needed and are worth the money (see cutting funding for PBS).

I say "principled" because they sure don't ask for reduced spending to pay for when they need help. See Katrina and other disasters, Mitch McConnell's fund to help nuclear power workers, etc.

But the fundamental problem here is the flat refusal to accept the reality that:
1. The national debt and annual deficits can, will, and should fluctuate depending upon circumstances. The "sky is falling" reaction to added debt is beyond ridiculous. This country has flourished economically under almost non-stop deficit spending. This isn't to say raising the national debt and running annual deficits is always good, but it sure as hell isn't always bad.
2. The same reaction to tax raises is also ridiculous. Tax rates can be increased or decreased, depending on circumstances, and raising or lowering them isn't inherently good or bad.

A sane reaction to this whole thing isn't - "well, they spend money on things that don't matter, so that's why this can't be funded."

It's "I don't care if it costs every single one of us an extra dollar in taxes in a year, or we need to cut funding on (insert wasteful program here), we need to get this done."

Face=>Palm

So, you quote the same hyper partisan types of 'media' Fox uses and claim to not know about Fox at all...oh really. That's an impressive blindness to a political giant not only here, but in your country as well.

Yes, red herring. I'm not bothering with your over abundance of partisan right wing sites, but the one I did randomly check said almost exactly what I said, that they had found NOTHING illegal and probably could never prosecute even if they did because they could not prove she knew it was illegal, but more likely what she did wasn't illegal or improper at the time she emailed from/to her private server. I'm sure the rest told you what you say they did read in the right light...but you don't understand it's all BS. How do I know? No charges. If/when they ever found anything substantive, there will be charges pending the next day and republicans on every channel dancing a jig. Since there aren't, I know there's nothing there.

Your smattering of anti-socialist sites mean nothing. No one said socialism was perfect, just that it's part of society and railing against any instance you can identify is just plain silly. Too much socialism without incentive for production is never a good idea...but none at all is Mad Max, where your precious degree won't be helping save you from the gas boys.

Again, more crazed right wing articles making claims against the ACA mean...what? Nothing. It's survived every challenge so far, and hundreds of attempts to repeal it. It's alive and well, contrary to what you've apparently read. It could certainly be better, but obstructionists would have nothing of 'single payer' and many states have done all they can to sabotage it.

Now for Trump...not a single one of those ideas is anything more than laughable.
1. Good luck with just 'not letting any more in'. You'll need to put the entire army on the borders, and the navy off shore to even come close. Won't happen in any way. The borders and shores are too large to patrol or wall off, much less both.
2. What free Federal resources do you think exist that can round up 11 million people and move them across a border? They don't exist, and would cost the entire GDP to try if it went smoothly...and it wouldn't. And it ignores the millions of legal children left behind which would cost billions-trillions more to take care of poorly. It's just laughable.
3. Smile because you just ate a tasty turd Trump told you was the best, most luxurious chocolate mousse.
Uncontrolled immigration is an issue, but not one easily solved, certainly not with his outrageously expensive plans.

Mexico building a wall because we illegally stop trading with them? (we have a binding trade agreement that precludes any such thing by law) You've got to be kidding. First, can't and won't ever happen, it would cost us trillions to replace/lose the products and trade that come from Mexico, if we could. Second, as I mentioned, illegal. Third, what happens when other nations side with Mexico, who's being illegally and outrageously bullied and blackmailed by the US, and stop trade with us too...like China? The plan is incredibly short sighted and given no thought at all, he just assumes that if we push, they'll all lie down and cry uncle. That's not how the world works.

You claim to have a degree and work for a bank, but you have at least twice tried to pin the entire debt on Obama. Perhaps you don't understand that the debt was about 12 trillion when he took office with the economy in the toilet thanks to the kinds of ideas you support? Our last president, a "conservative" far more than doubled the debt, and took a budget surplus and made it a HUGE deficit (source-https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm) and those numbers were while keeping two wars 'off the books' that are now being paid for. EDIT: and Obama has taken an enormous deficit and shrunk it precipitously while also turning the economy around...the right way (yeah, the last pres. turned it around too) Don't get it twisted...I'm pretty disappointed in Obama, I was from the first term, but because he didn't go much farther, not because of what he did get done.

Trump's the Republican second place runner...among republicans willing to answer presidential poll questions a year before the election. He's completely toast in a general election, even if he managed to get the other 76+% of republicans to vote for him (hint...he won't), he won't get any independents.

Vulgar language?!? I re-read my entire post, and not a single vulgar word IMO. One abbreviation of a vulgar word. You have GOT to be kidding me about that. If not, wow...get off the internet NOW and never come back, it's SO not for you. ;-)

@dannym3141
well said mate,and i agree that @radx is the man who can best explain this situation,though @RedSky is quite adept as well.

@bobknight33
don't let those fearmongers get to you man.
the deficit hawks use household analogies to make their point and this is not only a fear tactic but a disingenuous one at that,or just plain dishonest.

how you and i run our households is NOTHING like how a government runs finances.yet that is the comparative example they use over and over and over.so it is no surprise that many people may be a tad freaked out when they look at those massive numbers.

if we compare republican vs democrat over the past few decades,democrats have proven to be the better pick in regards to fiscal responsibility.

we live in bizzarro universe where rhetoric has the exact opposite outcome when applied to reality.

what i would really like to know,and not ONE candidate will even mention it:military spending.

the budget keeps going up.
by some estimates the military counts for 25% of all tax revenue but when you factor in ALL military/defense/intelligence it is closer to 50%.

YET....

soldiers benefits keep decreasing.
their health care harder and harder to obtain.(never mind the mental health care of our soldiers,which is criminal).
soldier suicide is at an all time high in over a century.
homelessness of our veterans is an embarrassment.

yet the military budget keeps getting higher and not one politician will even dare breath a word.even sanders record is not exactly stellar in this regard.

maybe if our political class stopped engaging in the practice of empire,we could re-invest in our own country.

Your video, robert reich debunks republican deficit hawks-austerity 101, has made it into the Top 15 New Videos listing. Congratulations on your achievement. For your contribution you have been awarded 1 Power Point.

@radx

It all comes down to the figures behind it. I'm no expert in this matter but most of the reporting I have read about advanced ageing economies like Germany suggests increasing health care and pension costs will substantially dwarf existing costs. Germany is of course much better placed than say China or Japan which have very restrictive immigration policies to begin with. This is purely looking at the cost rather the distribution of other funds and how that affects the deficit.

Germany's budget seems to be relatively well managed, but I think you will see many countries postpone the issue until the last minute or have some kind of crisis precipitate the problem (I'm comparing countries to the likes of Detroit's bankruptcy after house prices and thereby property taxes collected collapsed after 2008). When you look at immigration having very limited costs but huge potential humanitarian, cultural and economic benefits it seems to me that it's almost necessary to defend the argument to not raise it rather than vice versa (although I know you're not arguing against it).

There is evidence that having a diet with higher than average protein (and obviously you're aiming for lean meats) is more conducive to weight loss. As you wouldn't want to lose muscle mass, it's not so much the protein intake you're wanting to cut.

However, obviously whatever you're doing is working fine as it is, and perhaps the overall smaller portion is better for some.

I've got my own experience exercising and losing weight, 3 stones in 3 months. What i did was extreme and i'd eat only 1500 calories (over a thousand deficit), spend about half of the day sleeping, and swim hard enough to be exhausted after 30 mins every day. I definitely noticed that changes to my diet caused rapid and obvious benefits over, for example, increasing the exercise or mixing it up with HIIT.

It gave me a newfound respect for Bale and Gyllenhaal and their weight transformations. Absolutely incredible, i don't know how they managed it because i felt like death warmed up at times and compared to them mine was a life of excess.

FWIW, I think it is sincere. Varoufakis has two points. 1) Austerity is contractionary. Forcing Greece to raise taxes, cut pensions and run escalating fiscal surpluses makes it impossible for Greece ever to grow its economy sufficiently to pay off its debt. (The debt is likely unpayable in any case, but Greece is being subject to needless suffering and endless debt peonage because Schaeuble and the lenders refuse to cede any ground.) 2) It's not possible for every country to emulate Germany and run a trade surplus, because one country's surplus is another's deficit. If you expect other countries to buy more from you than you buy from them, the money has to come from somewhere. In other words, if it's your policy to run a trade surplus then you will have to finance your trade partners somehow.

First of all, Flassbeck is the only(!) prominent economist in Germany arguing strictly against the madness of austerity. But he's living in the border region between France and Switzerland, so he's a European more than a German.

Among all the economic think tanks in Germany, only the union-sponsored IMK makes a credible case against this madness. Everyone else is more or less in line with the neoclassic perspective. Not a Keynesian in sight, much less a post-Keynesian group.

But now to the meat of the issue. There will be no major political shift in Germany in the near future. As Flassbeck stated, only a single party opposes the financial inquisition commonly known as the Troika. Unfortunatly, it's the socialists, and despite overwhelmingly popular policies, they are still an absolute no-go for large swaths of the demos thanks to the authoritarian regime in East Germany. Sucks, but it is what it is.

So it's up to the French people once again to save the continent from itself. Noone else has the balls or the influence to put an end to this misguided union. How likely is it for the French government to openly challenge German hegemony soon? I wouldn't bet on it. Which means the Greeks are fuuuucked².

In any case, what would it take for Greece to stabilise? And by stabilise I'm talking about a return to a manageable level of unemployment, a working healthcare system and social safety net. A conservative guesstimate would be a public deficit of ~10% of GDP for at least 5 straight years. Alternatively, the EIB would have to prop up Greece with €50b a year for the same number of years. To get a working bureaucracy, to undo four decades of nepotism, Greece would basically need a generation to reestablish itself as a state – and it would require appropriate financing.

Now remember which of Syriza's demands is painted as most controversial right now: debt restructuring. Debt restructuring, while neccessary at some point, is entirely pointless as long as the fiscal policy remains contractionary. Greece needs austerity to stop, right the fuck now. Greece needs to provide income-generating jobs for its people. All the talk about debt is utterly pointless, because at 25% unemployment, we're looking at permanent damage in every way imaginable. The social toll alone should be completely unacceptable within Europe if we truly gave two shits about human dignity.

So, even if Syriza get their way tomorrow, Greece would still be flushed down the shitter. Syriza's proposal is contractionary. Any primary surplus in this situation is contractionary.

Greece is done within the Euro. The use of a foreign currency makes it impossible to use appropriate fiscal policy on their own. Unfortunatly, but also intentionally, the currency issuer, the ECB, is placed outside the democratic control of the European Parliament, or any national parliament for that matter. Fiscal policy within the EZ was taken out of the control of our elected representatives to ensure that the neoclassic/neoliberal approach was irrevocably built into the system. We can thank Germany for that, by the way.

There is a shortage of spending in Greece. There is a shortage of spending in Spain. There is a shortage of spending in Portugal, Ireland, Italy, France. There is a shortage of spending in Germany, for fuck's sake. Put the ECB under control of the EP, add full employment (2-3% unemployment) to its mandate, and have them finance the appropriate programs at the national level. The output gap in Europe is so massive, the un(der)employment so vast, they could spend a trillion Euros and inflation would still not reach the agreed upon target value of 2%.

All it would take to change the rules is consent from every national parliament in the union. Might as well go skinny-dipping instead.