Greek police union wants to arrest EU/IMF officials (symbolic only, for now)

Greece's largest police union has threatened to issue arrest warrants for officials from the country's European Union and International Monetary Fund lenders for demanding deeply unpopular austerity measures.

The threat is largely symbolic since legal experts say a judge must first authorize such warrants, but it shows the depth of anger against foreign lenders who have demanded drastic wage and pension cuts in exchange for funds to keep Greece afloat.

"Since you are continuing this destructive policy, we warn you that you cannot make us fight against our brothers. We refuse to stand against our parents, our brothers, our children or any citizen who protests and demands a change of policy," said the union, which represents more than two-thirds of Greek policemen.

The Greeks immediately tried to bargain, asking the ECB to forgo the profits on the bonds (that is, not expect to be paid the face value at maturity). Draghi refused, using the argument that that “would amount to the monetary financing of governments, which is forbidden.” The Greek government will have to pay to the last penny.

This is why in Europe, Draghi is considered a “strong” president of the ECB. Because he insists on the ECB making a profit on lending money to governments. And some even claim that he is on his way to solve the debt crisis of Europe.

The reality is different, when one examines the situation in details.

In order to purchase Greek government’s bonds, Draghi has to create those 40 billion euro out of thin air. The ECB has no assets of its own. Just like out Federal Reserve, it’s only “asset” is its legal monopoly on printing money. The ECB will not pull a resource from one segment of the market to finance another segment, like a private investor. It will simply create the money, and let the Greek government use that money to pay those that are favored by the government. Then, when the Greek government has to pay back, the private sector in Greece will be taxed heavily, so that the money returns to the ECB, with 13 billion euro profit, itself made out of thin air.

Read more: The Massive Theft Called a Central Bank http://godfatherpolitics.com/3615/the-massive-theft-called-a-central-bank/#ixzz1m0ZOiD1i

This sound familiar? It was recently revealed the Greek govt was destrtoyed----hollowed out from within----with some 535 fully-staffed govt departments that had no discernible purpose. The American economic nightmare continues below.

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The Stimulus Bombshell
MyGovCost.org ^ | 1/24/12 | Craig Eyermann
FR Posted January 31, 2012 by GSWarrior

Stunning.

That’s really the only word we can use to describe the release of a “sensitive and confidential” 57 page memo, written by then soon-to-be U.S. Treasury Secretary Larry Summers in December 2008, about what became President Obama’s signature economic program in the first year of his presidency: the “stimulus package”.

James Pethokoukis has summarized some of the most significant aspects of the memo, which we’ve excerpted below, and which reveals the Obama administration’s thinking behind what became an over 821 billion dollar boondoggle. The bold text represents Pethokoukis’ summary of that thinking, which is directly followed by a supporting quotation from Larry Summers’ memo:

1. The stimulus was about implementing the Obama agenda. The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary.... The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.

2. Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them). Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run.

3. Obamanomics was pricier than advertised. Your campaign proposals add about $100 billion per year to the deficit largely because rescoring indicates that some of your revenue raisers do not raise as much as the campaign assumed and some of your proposals cost more than the campaign assumed.... Treasury estimates that repealing the tax cuts above $250,000 would raise about $40 billion less than the campaign assumed.... The health plan is about $10 billion more costly than the campaign estimated and the health savings are about $25 billion lower than the campaign estimated.

4. Even Washington can only spend so much money so fast. Constructing a package of this size, or even in the $500 billion range, is a major challenge. While the most effective stimulus is government investment, it is difficult to identify feasible spending projects on the scale that is needed to stabilize the macroeconomy. Moreover, there is a tension between the need to spend the money quickly and the desire to spend the money wisely. To get the package to the requisite size, and also to address other problems, we recommend combining it with substantial state fiscal relief and tax cuts for individuals and businesses.

5. Liberals can complain about the stimulus having too many tax cuts, but even Team Obama thought more spending was unrealistic.

As noted above, it is not possible to spend out much more than $225 billion in the next two years with high-priority investments and protections for the most vulnerable. This total, however, falls well short of what economists believe is needed for the economy, both in total and especially in 2009. As a result, to achieve our macroeconomic objectives—minimally the 2.5 million job goal—will require other sources of stimulus including state fiscal relief, tax cuts for individuals, or tax cuts for businesses.

6. Team Obama thought a stimulus plan of more than $1 trillion would spook financial markets and send interest rates climbing. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.

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