Thursday, December 22, 2011

Telling them how it is-2

It just seems like the European are trying to buy time so that maybe in the near future their economy can grow out of recession and they can pay their debts back. But is that possible with some of the European nations population falling and the life time increasing putting increasing strains on their welfare system. How long these things can last as the debt keeps on piling up without any decrease in sight. All I see is sea of debt and it is not just the Europeans but the U.S. is also awash in debt and the tough love approach is also lacking here too. As anybody knows who have debt, unless the principal amount is paid off, the interest keeps on accumulating and sometimes it is even more than the principal. This is what is happening with sovereign debt.

I have never seen any principal reduction, all I ever hear is it been roll over with new issuance as the old debt gets paid by the new one. It is also with human contact, after all we try to maintain peace and tranquility by telling lies or sweet talk our way out of situations but ultimately one day we have to be given tough love either by your well wishers or by your circumstances. It is nice to hear bad news slowly but sometimes it is better to get in one go and get it over with rather than have intermittent shock treatment. This should be now the main concern of politicians that how to tell it to their constituents like it is without getting swept away in the next elections. It should be done now rather than down the road when things can get much worse.

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