Monday, March 15, 2010

The entitlement big hole:

You know in this economy everybody is suffering. It is not just the individuals, but also the municipalities, cities, counties, states and even countries. Today Moody announced that the biggest industrialized countries finances are being watched carefully for a possible downgrade in their ratings if they don’t fix their budgets and finances. We already know that if our debt is more than what we can handle, our rating goes down ( you should try to see your credit scores for one year to see this), but unlike individuals it was assumed that the countries have unlimited to power to generate income through printing money, exports or raising taxes to the bearable level. But it seems that the day of reckoning is near when you can’t do all of this anymore.

Case in point is Greece and to a lesser extent, Spain, Portugal and Ireland. I don’t really understand that with all the best minds on economics (in their respective countries) how they all screwed up with their finances. Maybe it was their arrogance or just plain shortsightedness (with an eye on the votes for the next election) that they promised people things that they knew or just ignored it that let the next government do it were not going to happen. Now the real pain is being implemented in European countries and the people are not happy about it and they are saying let the banks pay for it not them.

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