Athens in flames after passage of austerity measures

[twoplustwoisfour]

India have only 15% of its GDP as external debt

And yet some opposition parties especially the communists make a lot of noise when GoI decided to approach IMF or ADB for loan.

US has the highest external debt forming 95% of the GDP and yet some posters here are behaving as if the sky has fallen. By that theory countries like UK, Austria, Australia,Ireland etc will fall before US.

The problem is that India has HUGE internal debt.

 

[lynx]

The problem is that India has HUGE internal debt.

Internal debt is what the Govt owes to its citizens. I don't understand how that is bad as the money is circulated inside the country. Pls care to explain, as I am not an expert in this field.

 

[twoplustwoisfour]

Internal debt is what the Govt owes to its citizens. I don't understand how that is bad as the money is circulated inside the country. Pls care to explain, as I am not an expert in this field.

If a govt. does not have enough money to repay it's citizen, how will it invest in essentials like infrastructure, education etc? The only way for it to repay the debt (internal or external) is to raise funds through other means (tax increases, spending cuts etc.). This results in slowdown in economic growth.

 

[InFn-0]

Internal debt is what the Govt owes to its citizens. I don't understand how that is bad as the money is circulated inside the country. Pls care to explain, as I am not an expert in this field.

Internal debt means money is inside the country, but the balance of wealth in the economy changes.If there is too much internal debt then there will be significant interest expenditure as well. That way government will have to allocate a large portion of the budget in paying interest(which is useless in terms of development), in a way making the government poorer, and % allocation for development works such as roads, bridges, schools etc. will suffer. And if the situation turns out to be like the west, where the government keeps borrowing and pays interest through more borrowing, that is just going around in a vicious circle and drowning deeper in debt.

Ultimately the ability of the government to pay its debt depends upon the performance of the economy, as faster growth = more income = more tax revenue. Considering the speed at which India is growing a comparatively higher debt is only natural. However, there is still a balance to be maintained, if government pushes too hard for growth rate aka overdrive mode there will be problems in the economy.

 

[jha]

In luxembourg every citizen has a debt of $ 3,746,535 on him..interesting...

 

[InFn-0]

In luxembourg every citizen has a debt of $ 3,746,535 on him..interesting...

Countries like Luxembourg different beasts. For people living in Luxembourg paying $ 4 million is no big deal, but for every family in USA to pay $500 000 is a very big deal, infact i doubt if they can pay the interest, and unable to pay the interest would be officially bankrupt.

 

[Vassnti]

Is UK in the financial union , eurozone ?

The only solution is the Euro (Not EU as a political grouping) should be discontinued and every nation getting back to its own currency.

I dont know for how long the French and the Germans will keep supporting this ailing currency at the cost of their prosperity.

The Euro was a flawed policy from the beginning.

The Uk is being asked to contibute to the bailouts, that is why i included them.

In theory, if a majority of the 27 vote to use the fund for a second aid package for Greece, rather than repeat a eurozone-only rescue, the UK Treasury would be responsible for 12% of the new loan guarantee to the Greek government

 

[Unbeliever]

All is not well in the parts of Europe that think being in the EU is some sort of free ride. Greece has been fidling the books for years so people can retire from their cushy goverment jobs at 60 on a big pension.

They never had the money to pay for it now they would rather riot in the streets than admit they spent their money and that of their children and grandchildren for an easy life that one day had to end.

The Euro farce has to end countires like the UK, Germany and the Netherlands are getting sick of paying so Italians, Greeks and Portugese can sit on their posterior all day.

You are right.
However that is only half the story.
There is - once again - a massive shift towards private gain and public loss. European Banks who hold most of the Greek debt are given public money to "get out before its too late" and the European Taxpayer is left with more debt and wortless Greek bonds.

There is no hope in hell that Greece is ever gonna repay this debt, which makes it a massive waste of taxpayer money, slowly but surely plunging all of Europe into horrendous debt. Right now Germany is still looking good, but that is not gonna be the case for much longer if this insanity continues.

List of sovereign states by public debt - Wikipedia, the free encyclopedia

As you can see not only Greece, but Italy, Ireland, Portugal and Belgium have debt near 100% GDP.
You have 40% unemployment in Spain among people under 35 and a lot of this is directly related to the financial crsis caused by (mostly Wall Street, but also European) banks and their insane real estate gambling all over the world.
They didn't pay one cent to combat the crisis their absurd financial gambling has caused. No meaningful regulating legislation has been passed since the crisis to stop something like this from happening again, not even in "socialist" Europe.. This is a trend that will destroy our nations wealth like a global natural desaster..

I am usually an optimistic person but the developement over the last 3 years has made me highly pessimistic.

To anyone who wants to know more about this I highly recommend "Inside Job", an award-winning documentary.

I share your scepticism Vassnti about the Greek corruption, but do you really think the common people and workers of Greece deserve to have their social security cut basically to zero because of a developement that saw a couple of thousand Greeks get very rich and now "the bill has to be payed"?

I think it is a little more nuanced than that and I am not willing to turn on the Greek population that easily, because If I was a powerful banker or billionaire, that is exactly what I would want, for the common people, the middle class, to turn on each other..

"Divide and conquer"..

 

[Way to go]

Is Greece the origin of western civilization?

 

[Unbeliever]

A little off-topic don't you think..?

Well, short answer: No it is not the "origin", but classical Greek civilization has laid many of the foundations of what later would be considered western civilization like inventing democracy, relying on science a naturalistic naturalistic approach to the world etc..
Together with ancient Rome it is one of the most important ancient civilizations whose ideas where heavily rediscovered in the Renaissance.

 

[NeutralCitizen]

 

[muse]

Italy, Spain and Portugal --- soon after Greece -- It's an interesting study for any interested, the way the North and South, The Orthodox, catholic and Protestant deal with this problem

 

[Juice]

Italy, Spain and Portugal --- soon after Greece -- It's an interesting study for any interested, the way the North and South, The Orthodox, catholic and Protestant deal with this problem

Didn't see any protestant countries in your list.

 

[muse]

Didn't see any protestant countries in your list.

So far it's all confined to the South -- I just think if Weber were alive he would have had a field day -- It's an absolutely fascinating series of eventualities -- some banks are too big but entire countries apparently are not big enough -- these kinds of politics, I think will bring about a kind of social, political and cultural schism that Europe has not known in a while -- and really it's an absolutely absurd kind of politics isn't it? All the gains are for the banks and all the pain for the peoples who had nothing to do with creating this mess

The international bankers now play like a drug pusher, they gave loans and made huge monies for themselves, knowing that when it came time ot pay, it would not be their problem and even now, these loans offered to Greece, everyone knows that these can't be repaid, even if all of Greece is sold from under the Greeks -- How does it go? Privatize gains, socialize losses.

You wait and see if this movement comes to the US, that will be very interesting.

 

[InFn-0]

So far it's all confined to the South -- I just think if Weber were alive he would have had a field day -- It's an absolutely fascinating series of eventualities -- some banks are too big but entire countries apparently are not big enough -- these kinds of politics, I think will bring about a kind of social, political and cultural schism that Europe has not known in a while -- and really it's an absolutely absurd kind of politics isn't it? All the gains are for the banks and all the pain for the peoples who had nothing to do with creating this mess

The international bankers now play like a drug pusher, they gave loans and made huge monies for themselves, knowing that when it came time ot pay, it would not be their problem and even now, these loans offered to Greece, everyone knows that these can't be repaid, even if all of Greece is sold from under the Greeks -- How does it go? Privatize gains, socialize losses.

You wait and see if this movement comes to the US, that will be very interesting.

Agreed. Banking families like the Rothschild knew long back that lending to governments were the safest, because their loans were guaranteed by taxpayer's money. Now the current crisis is like the extreme situation of what was happening back then, banks bankrupting nations.

It might be me but i find a similarity with the man made crisis that happened to africa and south america some decades back. Institutions like the IMF and World Bank gave them huge sums of money on loans, fully knowing that these countries would never be able to pay back these debts, or even the interest for that matter. What happened later was the govts in Africa were forced to give away their resources for cheap as payback for those loans. Ultimately some people got richer and Africa got poorer.

I wonder if Greece, other European countries and ultimately the US will have to face such situations. There are more questions, like when african countries defaulted, it really did nt make a difference to world trade and commerce, but when countries like US, and EU defaults, God knows what will happen. Also, we are already facing strikes in Greece, when it happens to US, things will be much more ugly without a doubt.