Living in Greece has become incredibly tough right now... :-(

[Akvod]

mrstickball said:

@Akvod -

That may be a reason, but don't forget that the recession of 1937 only lasted a year, and that the economy had begun expansion in 1938, while the government was spending LESS that same year.

So, even if spending less was the cause (which can be debated), spending more was not the solution, as government outlays dropped from $91.9b in 1937 to $86.1b in 1938, despite the recession being over in June 1938.

 

@routsounmanman

Actually, the short term/long term perspective is the exact opposite. Short term, Greece would be a horrible place to be. No one would loan to you in the short term, forcing the country to solve its problems now. Like a bankruptcy, its an abrupt way to end the burden of creditors. It would cause a massive shortage of money for the country, causing a very brutal recession.

However, it would, in the long term, solve your problems. Since the country would have to solve the problems in and of itself, without external help, it would ensure that when it had fixed the problems, it didn't have to do so under the auspices of any other country, and have to satisfy anyone else. Once you were revenue-neutral, you'd have to pay back no one.

Once that was done, and Greece proved that it was solvent, external sources would loan to Greece again, but hopefully it would be taken in moderation, and Greece would have a chance at joining the big boys at the table, if not being stronger than many, since it had worked out an agreeable public/private sector without the aid of other nations propping up corruption.

 

I've read this elsewhere on the meltdown - Greece is like a drug addict. There are a few ways of dealing with a drug addiction. Defaulting would be like quitting cold turkey, and removing all drugs from the person's reach.

Perhaps it recovered quicker than the Great Depression... because it wasn't as big as one? A year long recesion is still a LONG one... you make it sound like it's short.