Reuters: Situation in Europe is serious
- Thread starter bearice
- Start date
The numbers posted by bearice are technically correct, but they are meaningless, as I keep saying in the other thread.
Gross external debt is the total debt owed by the nation's households/corporates/govts to foreign creditors. If I am not mistaken, these numbers come from here: http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations
Just like most things produced by the CNBC, these numbers should be taken with a grain of salt, if not ignored (which is what one should obviously do in this case).
M
morganist
i would like to add another element to this debate. as the debt level rises the ability to repay the debt deminishes due to the reduction in demand the repayments and fiscal cuts made. in short by making the private sector repay the debt through taxes the ability for the private sector to operate is damagaed. this in turn has an affect on tax revenue. spiral.
this means the debt does not even have to be as bad as the op has stated the situation is not at a level where the private sector is unlikely to be in a position to make expected returns thus a default is practically inevitable.
in addition the long term liabilities, pensions especially that are not included are not viable. the expected future income from taxes on the private sector to pay for these costs will not be sufficient. in addition to the aging demographic the outlook is inevitable failure of some sort.
this means the debt does not even have to be as bad as the op has stated the situation is not at a level where the private sector is unlikely to be in a position to make expected returns thus a default is practically inevitable.
in addition the long term liabilities, pensions especially that are not included are not viable. the expected future income from taxes on the private sector to pay for these costs will not be sufficient. in addition to the aging demographic the outlook is inevitable failure of some sort.
How come an economist such as yourself and guys like me who took 1 semester of economics in college can clearly see this, but our "leaders" and the PhD economists at the Fed cannot??
M
morganist
they can they just want to get what they want. they want power and money so tell politicians they can do anything. the politicians tell people they can have what they want so they win the election. the ridiculus things are put in and the economists get paid a lot for telling people lies.
incidentally if you want a good macro economist (apart from me (i think i am good anyway)) thomas palley is good. he stood by his beliefs when other economists sold out to monetarism. if you did that you were excluded from the community. until now, however they are switching to the austrian school, which although has some merits and would have avoided this mess, is not sufficient to get us out of it. so it is, although not necessarily wrong, ineffective.
thomas palley, michael schulter, paul mills, peter warburton, tim congdon, these are the good economists and i bet you have never heard of one of them. have you?
M
morganist
perhaps. these are the less known ones i thought i would add to make people understand there are a lot of good macro economists that are sidetracked.
like i said economists suck up to politicians, the politicians suck up to the public and the public does what they want until it affects them. by then it is too late. aka now.
M
morganist
the thread was worth posting though the analysis is good and the debate helped.
unfortunately the majority of people have no interest in economics. someone once said to me i have no interest in discussing economics it doesn't interest me. the person pissed me off. why?
because it is something that affects your life like eating or drinking it is not a luxury it is a necessity. why should i have to learn the subject and sort the issue out because people have no interest. how about i show no interest too and the economy collapses. people need to have respect for subjects like this but don't because they have live off other people doing what they want to do and not looking after the necessities. this is part of the reason the world is like this.
at the end of the day these people have enslaved people in the second and third world. indulged themselves and not taken the basic necessities seriously. they deserve the situation they create but the people that will suffer will be children and the poor. so what do you do, let it collapse or solve it so the slavery and mistreatment of others continues. this is issue a lot economists face on a personal level. the good ones at least. there is a growing level of apathy in the community as a result of the apathy of society. why should we have to carry the burden of people who live off others and don't look after their basic needs.
does this piss you off too.