You're watching...
University of Chicago Professor Charles Lipson on efforts to resolve Greece’s debt crisis.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
There -- you obviously it's not just oil and gas prices that are going to be affected by Greece's latest financial problems I think we've been following this a situation closely here on money.
Because it could have a huge impact on our economy if Greece can't survive until they get the next round of bailout funds next week joining me for more now.
Is my favorite professor of all time -- is you knew I was talking about Charles let's send from the University of Chicago.
Boy you know we've made a mess here in the US.
-- and it looks like Greece's is -- -- heap of mess itself.
Is this finally the end of the line for Greece.
I don't think it's the in the Life Partners by the I do think that none of the problems have really been solved.
The basic problem now is that -- Greeks are now entering their six the year.
Of a serious recession this is really more like a depression.
They're GDP is down 20%.
-- from 2009.
Unemployment among youth is nearing 60%.
And they've just cut their budget more.
What's the real dispute here the real dispute.
He is about two things one is what's the way out of this mess.
Com the creditors really want more and more cutbacks.
In return for which they'll basically -- Greece the money to pay themselves back yeah what the IMF would really like to -- He is there -- real losses here.
The or real losses creditors have -- money you -- essentially bad and just like in a bankruptcy.
Sometimes the lenders have to take a haircut.
And what the IMF would like to do -- for the lenders to take a haircut but those lenders are the sovereign countries of Europe.
And their politicians they do not want to take that hair -- You know time I have an economic debate with someone which is like all the time.
You know they want you to -- says the example for their argument can you notice that I mean both sides say we do what you want.
We're gonna turn into Greece if we cut spending dramatically because this fiscal clip.
We're gonna turn into Greece or they say if we you don't keep spending -- we raise taxes if we don't -- -- How are we most like Greece -- -- that argument.
Well Greece has currently.
Paid debt of the ballot.
A 190%.
Of their GDP.
And what the -- trying to do this is their aspirations.
-- to get it down 220%.
And the question is are they gonna do that over ten years or eight years or twelve years there's been a little edging around.
We are -- -- up.
We're getting toward a 100%.
Of our GDP but we're nowhere near -- I think what people though.
Are talking about it's not just bad the total debt but the fact that Greece also has a very rigid labour market.
Because people get early retirement they have huge pensions there's a big government sector so a lot of people.
Who'd been concerned about a kind of drift toward more and more centralization more and more.
Kind of soft socialism.
In US social programs they're pointing to that as well.
You wanna take a shot at solving the fiscal -- crisis warrior -- -- I don't think we're gonna picks Greece what do you think.
I don't think we'll do any thing call before mid December.
That is I think it's only the threat of hanging in the morning that will focus the mind you remember that quote there's nothing that focuses the mind so.
So clearly is the threat of hanging in the morning and I think get the -- move up to debt but I think the Republicans are very chastened.
By the fact that.
By the fact that they lost but you heard congressman -- -- -- Yeah your first I didn't hear any -- sitting at the top of that show needed and you as he was out there are no Reagan.
I heard some thing in the undertone there.
He didn't wanna say I'm I'm gonna cave in on this but he said I'm not gonna fall my swords.
Over taxes for the rich and I think that President Obama given his electoral victory.
Is gonna make it very difficult for Republicans because billion -- up being in the position of just defending.
On high tech.
The tax breaks for the rich and that's an awkward colluded outlining the millions he just switch the language of the argument you know he was saying -- I'm standing up for jobs and opportunity and now I I think it's just all about distancing yourself from anyone with money right now that they've learned this is absolutely -- -- -- -- and it's it's just it's semantics I don't know.
Well you're absolutely right AM yeah and I've got to say nothing looks like it's a pathway out the term growth for our economy that's the real problem you wanna grow out of this and that's the problem in Greece is well yeah you don't -- the rollout of it -- cut out of it it's a total disaster completely depressed professor lifts and things I don't know I'm sorry yeah.
Setting I thought.
That's all that matters are right time now for.
