Really great links - Greece - Interest rates and housing bubble - China - Healthcare deficit

Ambrose Evans-Pritchard - Europe has left Greece hanging in the wind - "“So they want Greece to reach the point of bankruptcy before they help us?” asked Greek opposition leader Antonis Samaras
Greece is worse off than before. It cannot decide when to invoke the mechanism. It has given up its right as an IMF member to go to the fund when it wants, leaving it prisoner to Europe's deflation dictates. "The IMF would be a lot softer than Europe," said Ken Rogoff, the fund's former chief economist."

Bill Woolsey - Credit boom 2003? - "In conclusion, nominal expenditure was too low during the period of the supposed credit boom. On other other hand, that does not necessarily imply that interest rates were not too low. It is certainly possible that excessively low short term interest rates were one of the many factors resulting in excessive increases in home prices. So the Fed's approach to monetary policy could be a contributing cause of the speculative bubble in home prices. And that speculative bubble certainly resulted in a misallocation of resources that can only now be gradually corrected by shifting labor to more productive avenues and producing new capital goods.
Worse, the end of the speculative bubble, and the losses of the financial firms that had lent into that bubble, were the key trigger for the disastrous drop in nominal expenditure in late 2008. And now, the absence of a clear commitment to returning nominal expenditure to its previous growth path is resulting in even more severe difficulties with production and employment. A policy approach of gradual decreases in short term interest rates, and further, dealing with the zero bound by promising to keep short term interest rates low for an extended period of time, not only is again not getting nominal expenditure back to its trend growth path, it might also be responsible for a future speculative bubble."

Interfluidity - China - "Remember, economic capital has nothing to do with money. Supplying capital is nothing more or less than assuming the burden of economic risks. Where do you think China’s ever-expanding capital base comes from, when it has been the world’s largest exporter of financial capital? China’s citizens assume great risk, in the form of below-world-market wages and social safety benefits, in exchange for the promise of a wealthier and more powerful nation. To some degree that capital is extracted involuntarily, but China’s government has had remarkable success at maintaining legitimacy and the consent of the governed despite the extraordinary costs citizens have borne in the service of an uncertain future. So far, citizens have seen consistent returns on their investment: the big question is how China fares in a persistent “bear market”, when it comes to seem as though much of their sacrifice has been wasted or stolen."

Scott Sumner - Healthcare math - "Let me get this straight. We’ve been told for many years by economists of all political stripes that Medicare and Medicaid were on a tragectory to bust the budget, and something would eventually have to be done. Of course in the past when Congress promised to cut Medicare, they generally reneged on their promises. But let’s give DeLong the benefit of the doubt, the commission in the bill really does have more teeth than usual. But does that make DeLong’s argument correct? I don’t see how. If Medicare was projected to bust the budget in future decades, then doesn’t it stand to reason that we already needed to cut Medicare and use the money for deficit reduction? But Obama is basically saying; “we propose to have future governments do what everyone knows has to be done at some point anyway, but instead of having the Medicare cuts used for deficit reduction, we propose they be used to increase medical spending in other areas, such as subsidies for health insurance.” Someone please explain to me how that makes this deficit neutral."