The problem is simple: Greece’s creditors insist on even greater austerity for this year and beyond – an approach that would impede recovery, obstruct growth, worsen the debt-deflationary cycle, and, in the end, erode Greeks’ willingness and ability to see through the reform agenda that the country so desperately needs. Our government cannot – and will not – accept a cure that has proven itself over five long years to be worse than the disease.
So what "cure" would you prescribe? The one the rest of the world has followed?
The one that simply masks the problem instead of dealing with it?
Oh, I get it -- you believe (and it's true) that Greece got a bad deal relative to everyone else. But that doesn't mean that everyone else did it the right way. On the contrary; the world's Central Banks have amassed a money-printing hoard of unprecedented size relative to GDP.
Unless this credit expansion is backed out of GDP numbers then the figures presented are frauds because the destruction of purchasing power is immediate and real on a per-unit-of-currency basis.
In other words the so-called "growth" is false; what's really being argued here by Varoufakis is that Greece is being asset stripped so as to transfer purchasing power to the rest of the EU.
In that his complaint is valid, but note that this is not how he presents it -- and that deception is intentional.
The same is true here in the United States. We ran a net currency destruction of $1,086 billion last fiscal year (ending 9/30/2014); our GDP estimate (annualized) for 3Q 2014 was $17,599 billion.
In constant dollar terms we destroyed 6.17% of the currency's purchasing power over the previous 12 months as of 9/30/2014; so-called GDP growth in 2014 was allegedly 2.4% so we actually had negative growth in real terms of about 3.8%.
The ECB, JCB and Chinese Central Bank are all doing the same thing. It is an outright fraud to declare that you have "growth" when in fact you are simply destroying purchasing power.
If I take a $20 and tear it in half I do not have twice as much purchasing power; I may have two pieces of paper but I have gained exactly nothing. This was the point I made to one of the MMT clownfaces a couple of years ago on-air with RT and he had no response; he couldn't respond intelligently because you can't argue with arithmetic.
The entirety of the world's developed economies are all in recession on a monetary-adjusted basis. The US is running negative growth in real terms and so is Japan, Europe and China. All are playing a tune that is fundamentally a lie and while this has goosed the stock and bond markets you can't create real final demand with printed credit on an indefinitely basis -- all of what you "print" via this sort of shenanigan must eventually come back out and when it does, historically, it does so on an uncontrolled basis and results in a severe economic dislocation.