We tun global prekeh now!

[Willi]

http://www.guardian.co.uk/commentisf...ation-eurozone

Thanks Omar, for racking up the debt in that 14 year run.

[Willi]

Comments

This is despairing and calls for some radical and unique solution. Jamaica will have to step up and do something to rescue the country from this situation. Definitely a job for a politico-economist-business manager. Countries such as Jamaica, Greece and others which are failing faster, need to form their own organization to share ideas about possible solutions, since failure is not an option.
Taku2


cbarr
Who was it who said "when a crisis occurs all property returns to its true owners"?
You're right: Greece was set up as mug to buy German goods - the German model relies on Greece taking on debt.

• • Link
• KrawuziKapuzi 18 May 2012 11:10PM
  
  
  Look Mark, the clue is in "he policies the creditors have attached o further lending". Greece or Jamaica for hat matter could default tomorrow, nothing to be done about it, short of declaring war. Problem with that is that they need to keep borrowing. What could possibly go wrong?
  Look, hard to comprehend for you, but if you want me to lend money to you, I'm going to set conditions. Don't like that? Though ********. Don't borrow from me.
• • 18 May 2012 11:21PM
• Jamaica has the world's highest public debt burden: interest payments on the government's debt account for 10% of the country's national income. (For comparison, Greece – with the worst debt burden in Europe – is paying 6.8% of GDP in interest.) This leaves little room for public investment in infrastructure, or improving education or healthcare. Partly as a result of this debt trap, Jamaica's income per person has grown by just 0.7% annually over the past 20 years.
  This is a very sobering lesson for both Greece (hopefully not too late...yet) as well as any other country that wants to follow in Jamaica's and Greece's steps and overspend for years upon years:
  just say no!
  
• IgorBeaver 18 May 2012 11:25PM
  
  
  I'll simplify it for you Mark. It's like, one world, mon. Methinks I will send my money to a Greek "student" so that he can extend his vacation on the beach for another month...
  
  
  
• jolyonwagg1 18 May 2012 11:29PM
  
  
  Comparing Greece and Jamaica and there on going debt problems. Mm well both have widespread corruption problems, that they do have in common. Jamaica borrows vast amount of foreign money simply because its infrastructure, work skills, basic company laws is virtually none resistant, also this causes high unemployment.
  To think people are going to borrow you money and not expect to be paid back is simply madness. Jamaica is in a debt spiral, but makes little serious attempt to break the cycle.
  • 18 May 2012 11:34PM
• Jamaica needs debt cancellation
  - and the rest of the world needs to move to a post-capitalist economic system, using the wealth and expertise human labour has created for the benefit of all, and to ensure a sustainable future for coming generations on a planet with finite resources.
  • wdednam
• 18 May 2012 11:44PM
  
  
  Response to BiffyDunderdale, 18 May 2012 10:47PM
  In most countries there are backruptcy protection laws that protect debtors from starving to death or losing everything in an attempt to pay back their debt, which is in the lenders' best interest because it will help ensure that the debt gets paid back even if it takes a long time. Unfortunately Greece has not been given such a chance to pay back its debt at a sustainable pace. Now lenders risk losing everything because Greece has to be "punished" for having too much debt.
  Yes, by all means punish them, but don't be surprised if democracy happens and it all backfires on you. Democracy seems to be the variable you have excluded from your assertion. Impoverishing a nation to pay back a debt is not a sure-fire way to get your money back.
  It's time Greece does an Iceland/Argentina, it will be much better off that way.
  
• wdednam 18 May 2012 11:52PM
  
  
  
  Response to KrawuziKapuzi, 18 May 2012 11:10PM
  Problem with that is that they need to keep borrowing. What could possibly go wrong?
  Does Iceland need to keep borrowing, or Argentina for that matter, if by borrowing you mean foreign money?
  Iceland also has a primary deficit but its economy is recovering (around 3% GDP growth the last two years) because it can print its own money and has devalued its currency.
  Of course they can't keep printing forever as eventually inflation will set in, but in the current economic climate they have lots of room for loose monetary policy.
  That said, are you certain though that Greece, being a relatively small economy and all, would not find lenders outside of the West?
  "Bad" countries like Venezuela aren't having trouble getting money from China.
  
  
  
• Wynand 18 May 2012 11:53PM
  
  
  Jamaicanisation
  That word is Jamaican me crazy. Huh huh.
  I'll let CiF get back to the debate now.
  
• • 19 May 2012 12:04AM
• 
  
  
  
  Response to NeverMindTheBollocks, 18 May 2012 11:21PM
  This is a very sobering lesson for both Greece (hopefully not too late...yet) as well as any other country that wants to follow in Jamaica's and Greece's steps and overspend for years upon years:
  just say no!
  Oh, you mean like Japan? They have just spent and spent and guess what, disaster has not struck! And to top it off, they've got the second highest debt to GDP ratio in the world!
  Germany and France's Debt to GDP ratio are larger than Spain and Ireland's, but they are doing relatively okay.
  Iceland is growing 3% annually again and will pay its debt when it can.
  It's not the size of the debt that matters but your ability to finance that debt which is pretty common sense actually. Now, if you take away a country's ability to finance its debt, i.e., depriving it of economic growth by imposing austerity during a recession, well then you have a problem.
  Stop spreading misinformation please.
  
  
  
• wdednam 19 May 2012 12:07AM
  
  
  
  Response to IgorBeaver, 18 May 2012 11:25PM
  I'll simplify it for you Mark. It's like, one world, mon. Methinks I will send my money to a Greek "student" so that he can extend his vacation on the beach for another month...
  I suppose you have documented evidence of all those Greek students lying around on beaches or you just like taking cheap shots in general and have nothing substantive to add to a discussion on these issues. My bet would definitely be on the latter.
  
• wdednam 19 May 2012 12:10AM
  
  
  Response to jolyonwagg1, 18 May 2012 11:29PM
  The corruption is holding the country back meme... sigh...
  Corruption is to be deplored, and addressed, don't get me wrong, but it isn't necessarily bad for economic growth. Just look at China, India, Russia and Argentina!
  
• 
  
• 000a000 19 May 2012 12:22AM
  
  
  Problems caused by spending too much.
  ANSWER: Spend more.
  Bizarre article.
  
• 
  
• terencepatrickhewett 19 May 2012 1:07AM
  
  
  The man is cracked.
  
• • Link
• Nicopotamus 19 May 2012 1:24AM
  
  
  Another financially illiterate piece about Greek in the space of 24hours. Well done.
  Have you thought about quality over quantity?
  
• • Link
• Nicopotamus 19 May 2012 1:26AM
  
  
  It's incredible to think that the creditors, actually want to ensure that Greece gets its house in order so it can pay its bills, rather than just spunking the money on the bloated public sector.
  How dare they.
  I
  
• 
  
• Nicopotamus 19 May 2012 1:27AM
  
  
  Don't they know that usury is illegal at the Guardian. Unless you're lending money to start up an organic whole foods shop with a cafe with wi-fi attached for your MacBook.
  
• 
  
• Nicopotamus 19 May 2012 1:31AM
  
  
  Response to wdednam, 18 May 2012 11:52PM
  Yes it does, and yes it does. Also,Iceland has a huge debt to GDP ratio and its GDP is still way under 2008 levels.
  Japan has been in recession for about 20 years.
  China hasn't exactly been forthcoming in lending to Greece has it. The only entity that will lend to Greece is the ECB because everyone else knowstheir economy is a basket case, and until they sort that out no one isgoing togive them adime.
  
• 
  
• SkibbereenBeagle 19 May 2012 1:50AM
  
  
  Jamaica has the world's highest public debt burden:
  No it doesn't Japan is way ahead of it in pole position, followed by Greece, St Kitts and Lebanon.
  On the other hand North Korea has virtually no public debt. Nor does it have a robust economy
  
• 
  
• MonaLisa4ever 19 May 2012 2:18AM
  
  
  There is one problem here.
  Greece has been following troika recommendations. They are following what troika has 'prescribed' for the Greek economy. And as a result of these recommendations, the Greek economy is falling apart. So, in essence, troika is creating a mess out of the Greek economy and pushing it to stagnation, high unemployment and economic decline.
  Do all these economists unerstand the damage they are creating in Greece? And can they not see that this is a failed policy that will bring terrible results for the Greece (as well as Spain and the other countries of the periphery)? Isn't it time to revise this program and use the FEEDBACK for its present results to redesign it and ensure that economies are helped rather than impeded?
  
• SLOJohnny 19 May 2012 2:57AM
  
  
  Response to SkibbereenBeagle, 19 May 2012 1:50AM
  A hugh percentage of the Japanese debt is held by Japanese people or financial institutions; 80% - 90%. So debt payments do not cause major flows of wealth out of the country. The interest rates on these debt are extremly low 1% - 2%. Exactly the opposite of the situation in Greece; and unique in the world economy.
  
• SLOJohnny 19 May 2012 3:07AM
  
  
  Response to MonaLisa4ever, 19 May 2012 2:18AM
  Greece has NOT been following the troika recommendations. They have not liberalized labor laws or reformed their government bureaucracy to encourage and support investment to create job opportunities and economic growth. They have not made any significant efforts to catch "tax cheats" who evade paying what they owe; especially the richest Greeks. And, they have not redirected and focused their social security and pension payments on those most vulnerable and in need.
  And, they haven't thrown the bastards who caused this mess in prison. Please remeber that this tragedy was created when a pack of schememing politician lied about the true scale of Greek budget deficits.
  
• • k
• SLOJohnny 19 May 2012 3:12AM
  
  
  A ridiculously simplistic and shallow analysis of the debt crisis in Greece. Mr. Weibrot would earn a solid C or D grade if he had turned this junk in as a paper at any decent college or university.
  
• 
  
• stoneman 19 May 2012 3:38AM
  
  
  
  Response to NeverMindTheBollocks, 18 May 2012 11:21PM
  This is a very sobering lesson for Greece (hopefully not too late...yet) as well as any other country that wants to follow in Jamaica's and Greece's steps and overspend for years upon years:
  just say no!
  Well it looks like the Greeks have just said No to more bailouts. No to more loans. No to the EU propping up reckless European banks and No to throwing good tax-payers money after bad!
  A policy of just saying No I take it you agree with?
  
• ajgraham 19 May 2012 3:43AM
  
  
  The main problem with Greece is poor governance. How a country and be run for decades with no one knowing the total amount it generates via taxes (which was the case up to only 2 years ago) is always going to lead to disaster. The financial issues with Greece, Italy, Spain and Portugal stem from poor taxation legislation and enforcement, it's an endemic problem.
  
• stoneman 19 May 2012 3:43AM
  
  
  
  Response to SLOJohnny, 19 May 2012 3:07AM
  Greece has NOT been following the troika recommendations.
  The Greek economy - and with it the Euro - is disintegrating BECAUSE Greek politicians are implementing austerity, not because they are failing to.
  No sane person can believe that sacking 100,000 civil servants in a single year, increasing taxes on fuel, lowering the tax threshold so that the poorest Greeks pay for this crisis, cutting back on wages and old peoples' pensions - will repay debts, re-capitalise banks and lead to economic recovery.
  Instead, these policies will trigger wider social unrest and the inevitable default - sooner rather than later. And a Greek default, accompanied by social upheaval will be contagious, making things much, much worse for Europe as a whole.
  The IMF/EU/ECB Troika seem unable to acknowledge that austerity is the wrong remedy for another crisis; the crisis of a bankrupt banking system broken on the back of de-regulated finance.
  It is the failure of the Troika to extend their focus beyond the narrow interests of the private, wealthy banking elite of Europe - and towards the interests of all Europeans - that is causing economic failure.
  
• MonaLisa4ever 19 May 2012 3:52AM
  
  
  Response to SLOJohnny, 19 May 2012 3:07AM
  You are very wrong here.
  They have implemented 85% of the reforms requested by troika (according to IMF and OECD).
  They have opened most professions, there is resistance of course, but the efforts keep going.
  They have made huge efforts to deal with the tax evasion program, just you don't know about these things because the majority of the cases are not advertised in the foreign press. Only the bad news about Greece and the negative criticism is advertised as part of the negative publicity agenda that has been going on for two years now.
  But the Greek papers are full with news about
  -lists of tax evaders (naming and shaming)
  -review of tax reports of all Greeks
  -arrests (daily) of debtors to the Greek state
  -measures taken to deal with tax evasion like: all cash registers connected with MinFin, a certain body of police created for Economic Crimes (some accused this as more public servants being hired!!!). a hotline for citizens to report economic crimes, review of high profiles cases, faster processing through courts, to name a few that come to mind.
  They are reorganizing and restructuring the public sector, reducing its size first by implementing one hired for ten retired rule, providing early retirement incentives, canceling redundant services and planning outright sacking of 150,000 workers by 2015. The public sector has been reduced by 160,000 though attrition and elimination of services since 2009.
  Pensions and salaries have been reduced by 25% in the higher margins. With the added benefit reductions and tax increases, salaries/pensions have been reduced by 50% overall.
  Tons of other changes over the last years. Tons of cuts in government services. Thus the 20% unemployment.
  Quit reading yellow press, read some decent papers that present a balanced and fair view. Even for the sake of objectivity. Reiterating junk propaganda about a nation should not be dignified for anyone who has a bit of self respect!
  
• stoneman 19 May 2012 3:53AM
  
  
  
  Response to SLOJohnny, 19 May 2012 3:07AM
  They have not liberalized labor laws or reformed their government bureaucracy to encourage and support investment to create job opportunities and economic growth.
  In case you hadn't noticed Greece was forced to shed 15% of GDP while taking an additional 20% of debt on its shoulders. This sealed its fate once and for all.
  As for the much debated reforms, their fate was sealed at that time too: no reforms can be effected meaningfully in an imploding social economy.
  
• 
  
• MonaLisa4ever 19 May 2012 4:00AM
  
  
  According to OECD, graph here, Greece was the country with the MOST STRUCTURAL REFORMS applied among ALL developed countries. Greece has been the most responsive to OECD recommendations than any other country of the OECD group.
  Change in overall responsiveness to OECD recommendations from 2008 to 2011
  http://www.oecd.org/document/50/0,37..._1_1_1,00.html
  
• MonaLisa4ever 19 May 2012 4:07AM
  
  
  Response to SLOJohnny, 19 May 2012 3:12AM
  And you would have gotten an F for failing to present a well researched project and basing your position on outdated data or outright lies.
  
• KSurin 19 May 2012 5:29AM
  
  
  Response to wdednam, 18 May 2012 11:52PM
  Agree-- time for Greece to do an Argentina, which faced up to its rapacious IMF and bank creditors, and has slowly recovered from a depression caused by adherence to neoliberal economic policy.
  
• LateSnow 19 May 2012 5:47AM
  
  
  
  Response to BiffyDunderdale, 18 May 2012 10:47PM
  But the implication of what you are saying is that anyone can borrow whatever money they want from the taxpayers of other countries and elsewhere, spend what they want and then not pay it back. I don't know about Jamaica but that's what happened in Greece.
  No, it's not. You know how you don't have an opinion on quantum mechanics, on account of being clueless and you know it? The difference with economics and current affairs is that you're unaware of being clueless, but you should refrain from having an opinion about them too.
  
• LateSnow 19 May 2012 5:49AM
  
  
  
  Response to physiocrat, 18 May 2012 10:55PM
  If governments insist in financing themselves with tax systems which lack robustness and impose a heavy deadweight cost on their countries' economies, this kind of trouble is inevitable.
  But when has Mark Weisbrot ever made this most obvious of points?
  
  He seems to have a much better awareness than you do that most governments do not need to finance themselves at all, and that what those who do, in the Eurozone, most need is a large fiscal transfer, just as an underperforming area of the UK would in a downturn.
  
• Marelef 19 May 2012 5:58AM
  
  
  Response to MonaLisa4ever, 19 May 2012 3:52AM
  As the retired wife of a retired Greek pensioner, I know all about the cuts that HAVE taken place over the past two years, as well as the SOLIDARITY TAX that is imposed directly (in our case more than 750 euros) and the extra taxes that are paid via the electricity bills (every two months).
  I commend your unstinting efforts, Monalisa4ever, in trying to set the book straight. Even if you know, as I do whenever I read these blogs, that those making such ignorant ill-informed claims won't even read your answer. They are not interested in any reality other than repeating their mantras Bad Greek took the money, now they have to pay....lazy Greek students lying on beaches!! This is examination time in Greece and believe me, there are no Greek students lying on beaches. There could of course be some of the 50% unemployed young Greeks on the beaches.
  I truly despair of this world that we are obliged to inhabit, but your determination gives me a little hope. I have spent 25 hard years working for a pittance to further the European project and now I realise that these were wasted years. The dream has turned out to be a nightmare. There is no possibility of enlightening people such as the trolls that inhabit these columns, awarding themselves fake recommends, for god's sake. What kind of education must they have received!
  
• LateSnow 19 May 2012 6:05AM
  
  
  
  Response to Nicopotamus, 19 May 2012 1:31AM
  Also,Iceland has a huge debt to GDP ratio and its GDP is still way under 2008 levels.
  Its GDP is growing at 3%, it has contained inflation to less than 3% and has 7% unemployment, which although high, is lower than any of the nations currently trying to cut their way to another depression.
  Its debt to GDP is nothing like "huge" and is nothing to worry about, since it is denominated in its own currency.
  Japan, far from being in a lengthy recession, has seen per capita GDP growth higher than Europe and the States between 2001-2010. It is currently struggling, but which Western country isn't?
  Why should China lend to Greece? It has invested in infrastructure in Greece though.
  So you got literally everything wrong in your post. Well done. I'm going to be generous and assume you just don't know what you're talking about, rather than believing that you are purposely spreading lies, but certainly you could do with being less forthright with your opinion when it is so misinformed.
  
• physiocrat 19 May 2012 6:22AM
  
  
  
  Response to LateSnow, 19 May 2012 5:49AM
  "most governments do not need to finance themselves at all"
  Eh?
  
  in the Eurozone, most need is a large fiscal transfer, just as an underperforming area of the UK would in a downturn.
  Yes, but there is no proper transfer mechanism in either the Eurozone or the UK which is why the north-south divide has persisted for the past 90 years.
  
• siren45 19 May 2012 6:41AM
  
  
  
  Response to Marelef, 19 May 2012 5:58AM
  As the retired wife of a retired Greek pensioner, I know all about the cuts that HAVE taken place over the past two years, as well as the SOLIDARITY TAX that is imposed directly (in our case more than 750 euros) and the extra taxes that are paid via the electricity bills (every two months).
  Well said Marelef. So many people on these blogs just have no idea of what it is like on the ground. Only two years ago we were living in developed country and now our hospitals have no hot water.
  Although I despise some of the CiFers in these threads, I really hope - in the spirit of solidarity - that you never have to go through even half of what the Greek people are going through now.
  A commendation from me also for your unstinting efforts to put the record straight MonaLisa.
  
• KSurin 19 May 2012 6:45AM
  
  
  You hit the nail on the head-- with the same currency as Germany, Greece could take in German goods ("same currency"), but when it ran into debt by doing this, the "same currency" required it to adhere to conditionality requirements set by the European Central Bank, oriented to German policy, which refuses to monetize the debt of individual EU countries-- though if Greece had its own independent central bank it could do this in the way that the Bank of England, precisely because the UK is outside the euro-zone, can bolster the pound without having to kow-tow to anyone else.
  Greece should never have entered the euro zone, but the temptation for a small country to share the same currency as 'super' Germany and France caters for a kind of vanity that hanging on to the old drachma would not. Really sad, especially if one happens to be a Greek pensioner or street-sweeper.
  
• 
  
• someofusknowthetruth 19 May 2012 7:12AM
  
  
  and although none of the eurozone countries is likely to become as poor as Jamaica is today
  Mark Weisbrot , you obviously have no idea what's on the horizon (or you are lying).
  Ignorance is bliss! (For the moment)
  
• 
  
• someofusknowthetruth 19 May 2012 7:22AM
  
  
  
  Response to SkibbereenBeagle, 19 May 2012 1:50AM
  Nor does it have a robust economy
  Maybe not, but according to the clowns in Washington and London, North Korea poses a great threat (the greatest threat?) to the western world.
  Or is it Yemen?
  Maybe it's Iceland that poses the greatest threat to the western world.
  It could never be Fractional Reserve Banking. money created out of thin air, derivatives, hedging, Peak Oil....... or any of a long list of unmentionables.
  
• yaling1234 19 May 2012 7:24AM
  
  
  Just say no！
  
• someofusknowthetruth 19 May 2012 7:28AM
  
  
  I bet a lot of people in northern Japan would be very happy to move to Kingston , Jamaica, what with the ongoing radiation leaks (and still nobody has any idea what to do about he core that has melted down through the 'containment vessel), the collapsing economy, the humungpus debt burden and freezing cold weather in the winter.
  
• SoundMoney 19 May 2012 7:29AM
  
  
  I don't know why I keep reading Weisbrot.
  The ECB is condemning no-one to anything. It's doing its job according to its constitution: keeping a lid on inflation in the Eurozone and managing interest rates. It is not, and was never intended to be, a vast subsidy provider.
  Some countries in Europe are learning - and apparently they have to learn the hard way - that they have to exist on what goods and services they can themselves produce, and no more. And that means a reduced standard of living because the rest of us are fed up of subsidising them when we've got economic problems of our own.
  Half the UK Cabinet are not entitled to a government car and driver.
  74,000 Italian public servants have chauffeurs.
  That's the scale of the adjustment necessary.
  
• KingCnutCase 19 May 2012 7:31AM
  
  
  weisbrot, why dont you just come out and say what you really mean -which is Jamaica etc should abrogate their debts.
  But those debts form the basis of people's pension plans.
  Essentially you want to see people with pensions bail everyone else out at the cost of their long earned financial cushion.

[Muadib]

He was referred to by Oliver Clarke (and parroted by mindless comrades) as the World's greatest Minister of Finance.

He was the source of amusement on the Thinking Man's program... I can hear Mutty laughing now....



Brain drain is a serious ting..

[Hortical]

Many Jamaicans are in denial when it comes to the disastrous tenure of those educated fools running tings.

[Assasin]

Tell people we inna deep trouble and them think a joke. Just some little jibes and gab can take us out.

Now imagine if we still had Air J/Sugar company to go with that what it would look like today. We need to get on with getting rid of some the lost making entitiy, cut what to cut and start thinking smartly and yes we may have to beg as well. I wouldn't like to be the finance minister at this time.

[Willi]

What we really need is to get in bed with the Chiney dem quick, quick!

What wi ah wait fah?

[Muadib]

The investigation of JDIP...

[Muadib]

USA will not allow the Port to be controlled by the Chinese... dem cyan expand it doh !

[Willi]

Den split it 50/50 with Uncle Sam.

Time to wheel and deal. Time is of the essense.

[Muadib]

Wi haffi werk wid di French.. USA nuh mind dat... watching the negotiation with the player from a certain region dat looking to package all 5..

[Willi]

It a tek too long though...

[Muadib]

Budget haffi debate and Anti-Christie Missiles haffi setup fuss..

lol !

[Sir X]

I warned you guys about 3 weeks ago...yuh feget dis ? Same bredda Mark Weisbrot

http://www.youtube.com/watch?v=0lwvoUW68T8

[Assasin]

3 weeks? How about years ago?

[Sir X]

Thats true but it was reinforced recently.