Taking Greece as an example and making it personal, assume you make $50,000 a year. Greek-sized debt means you owe $65,000 on your credit cards. If you get to that point, you've made some colossal mistakes in the way you've handled money. It's not something that's open for debate, either, it's just totally wrong. You need make a major change in the way you operate with money in every respect.
I don't understand the writers who talk as if the Euro can be saved with some modifications or how this might not end so badly for Europe in general. If a friend came to you with a problem like this, you wouldn't suggest that they if clip a few coupons and cut down on the Starbucks and everything will be fine. Problems like this show that their fundamental mental model of finances is totally wrong.
Socialism works until you run out of other people's money. They've run out. It's a failure. What else can you say about this stuff? I know I'm a broken record on this subject, but when presented with facts like this and then analysis pieces that mumble and beat around the bush trying to preserve the status quo, I end up totally flabbergasted. It's like seeing a house on fire and listening to family inside discuss whether or not they should fight the fire with a single bucket half full of water or just use some Dixie cups filled from the sink.
4 comments:
Your analogy is timid. I think to make it properly shocking, you would have the family standing in the light of the fire debating about whether it was a good time to put on an addition.
A bit of a side issue (it's for the US, not Greece), but here's an amusing little simulator where you can say what you want to cut to reduce the US debt, and it will calculate how well you do.
I imagine there's a lot of room for argument about their exact numbers, but it looks like it does a pretty good job of showing what can be done.
Italy's unemployment is better than ours???
(ratiess)
But Paul Krugman says we shouldn't worry because, percentage-wise, our debt levels aren't the same as Greece's.
Paul Krugman is smart. He told me.
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