Spanish Economic Drama: Nearly 57% Of Budget Devoted To Pensions, Unemployment Benefits, And Interest;

[Game_Over]

Iceland defaulted...and now has no problem borrowing. Russia defaulted...and now has no problem borrowing. Argentina defaulted...and now has no problem borrowing.

Why would Greece, especially a Greece no longer shackled to the Euro, be any different.

They would be able to borrow again at affordable rates EVENTUALLY

It's what would happen between NOW and EVENTUALLY

that scares the Hell out of Greek politicians and people alike.

[Game_Over]

Ooh, this should be good.......

Is that it? Got to say, I'm a little disapointed

Or is it?

The way I see it is we have had a trinity of national interests running for hundreds of years.

The Trinity is made up of Royalty and the Ennobled, The Financiers/Merchants and (more recently) Corporatists (FMC) and finally The People.

This relationship is a fractious one at best and each member of The Trinity holds the others in contempt and is ever looking for ways to get one up.

Historically this has happened and when it does it always ends in tears. Too much power to the Royals and eventually Royal heads roll. Too much power to The People and you get civil war, social collapse and, eventually, one party running to Royalty to redress the balance.

My History is not great but I can't remember the FMC class gaining this much ascendancy, at least not in the UK, but looking across the channel to Germany, Italy and Spain you can see the consequences, I think they called it Fascism, or at least hid behind that name.

The problem is when the FMC class have control of government they govern in their interest. The massive inefficiencies in the public sector invariably siphon funds into the businesses or interests of the FMC class. How many grand government schemes have gone billions over budget and are cancelled or completed years late without anyone raising an eyebrow?

Within the FMC class bankers are top, they are the oil that lubricates the wheels of trade and industry but they also control the ebb and flow money. This control of money gives them control of both trade and industry, no money in the system – nobody buys – nobody makes.

So, can we blame the bankers? I don't think entirely but a great proportion of the blame is at their feet, but they were allowed to become too powerful.

Somebody should have seen this coming. But who could stop it?

At the end of the day politicians set the economic and regulatory framework in which business operates.

If all controls are removed then a boom / bust cycle will inevitably occur

So you have really got to ask who stoked up the boom and for what reason

Seems to me the answer to that question has more to do with politicians getting re-elected than it does with bankers.

[silver surfer]

They would be able to borrow again at affordable rates EVENTUALLY

It's what would happen between NOW and EVENTUALLY

that scares the Hell out of Greek politicians and people alike.

Didn't take Iceland long! Anyhow, Greece has already defaulted.

[Democorruptcy]

Didn't take Iceland long! Anyhow, Greece has already defaulted.

The UK defaulted in March 2009

[GBdamo]

Both Fascism (Italian third-way socialism) and German National Socialism treated private industry as useful adjuncts to the all-powerful state.

"All within the state, nothing outside the state, nothing against the state."

Benito Mussolini

"The keystone of the Fascist doctrine is its conception of the State, of its essence, its functions, and its aims. For Fascism the State is absolute, individuals and groups relative."

Benito Mussolini

Who put Mussolini, Hitler and Franco in power.

...many of their companies, regardless of result, came out of WW2 stronger than they went in.

There is nowt quite like a popular idealist to throw your weight behind.

[Peter Hun]

The Spanish Conservatives have only just replaced the Socialists.

The socialists were only in power for a couple of years, the conservatives before them caused the crash.

Iceland defaulted...and now has no problem borrowing.

The only people who will lend are the Russian Mafia. No normal lenders will touch Iceland.

Argentina defaulted...and now has no problem borrowing.

Nobody will lend to Argentina either, and they are being sued constantly. US government has removed preferred import status becuase they have refused to pay 300million dollar claims to US companies. This puts them on par with N Korea and Iran.

Edited April 4, 2012 by Peter Hun

[the shaping machine]

Ultimately we would be better off without any of them [subsidies]. They all raise living costs and make us uncompetitive. There is nothing wrong with lower wages/benefits/pensions if you have lower living costs.

I agree, indeed there is a persuasive argument that the great depression was made much worse by the government interfering in wages and prices.

The FMC have the government in their hip pocket. We have such a large deficit because the FMC sucked us so dry it turned to a drought. Now they want us to pay more and more taxes and work more and more years. They will finish up taxing the air we breathe.

I think you are letting the state off the hook here. If the FMC exists it is because the state wants it to.

[the shaping machine]

The socialists were only in power for a couple of years, the conservatives before them caused the crash.

2004 to 2011 - Plenty of time for socialism to break lots of stuff.

[Democorruptcy]

I agree, indeed there is a persuasive argument that the great depression was made much worse by the government interfering in wages and prices.

I think you are letting the state off the hook here. If the FMC exists it is because the state wants it to.

I didn't like being accused of letting the state off the hook so I have edited it.

I said "it's not just public sector inefficiencies" earlier but forgot to give them a mention at the end.

[the shaping machine]

Who put Mussolini, Hitler and Franco in power.

For the first two, the electorate. I'm not sure Franco really qualifies as a fascist.

...many of their companies, regardless of result, came out of WW2 stronger than they went in.

There is nowt quite like a popular idealist to throw your weight behind.

And there's nothing like losing a war to focus minds. Germany built factories with their Marshall aid, we built the welfare state.

[josesbicycle]

Nearly 57% Of Budget Devoted To Pensions, Unemployment Benefits, And Interest;

Can anyone tell us the figures for the UK. How far are we away from the Spanish position ?

[Game_Over]

Didn't take Iceland long! Anyhow, Greece has already defaulted.

No it hasn't

It is still paying interest on loans.

When it eventually does default - you will know about it.

[mfs1959]

Nearly 57% Of Budget Devoted To Pensions, Unemployment Benefits, And Interest;

Can anyone tell us the figures for the UK. How far are we away from the Spanish position ?

Central Govt spending - UK Pensions £129.3Bn, Other welfare (including unemployment) £58.3Bn, Interest £48.6Bn - Total £238Bn out of central Govt spending of c. £540Bn. Local Govt spends another £192Bn and I don't know how directly comparable the UK figures are with Spain.

[zugzwang]

At the end of the day politicians set the economic and regulatory framework in which business operates.

If all controls are removed then a boom / bust cycle will inevitably occur

So you have really got to ask who stoked up the boom and for what reason

Seems to me the answer to that question has more to do with politicians getting re-elected than it does with bankers.

If all controls are removed then the law of the jungle prevails. Every institution is a mafia institution.

Even China has a bare bones legal framework and some limited grasp of property rights.

But I don't see anyone here rushing to absolve Gordon Brown. Brown let the swillers get away with their mercenary trades because in his conceit he thought he could out-smart them.

An unforgivable error, and a monstrous legacy.

[Peter Hun]

2004 to 2011 - Plenty of time for socialism to break lots of stuff.

The Conservative, Aznar, did the damage between 1996 and 2004.The Spanish economy crashed in 2006-2007

[Game_Over]

If all controls are removed then the law of the jungle prevails. Every institution is a mafia institution.

Even China has a bare bones legal framework and some limited grasp of property rights.

But I don't see anyone here rushing to absolve Gordon Brown. Brown let the swillers get away with their mercenary trades because in his conceit he thought he could out-smart them.

An unforgivable error, and a monstrous legacy.

A lot of people here blame Mrs Thatcher actually.

[josesbicycle]

A lot of people here blame Mrs Thatcher actually.

Count me as one of those.

But also include the Tory in sheep's clothing, Blair. New Labour could have reversed a lot of her policies but chose to stick with most.

[aa3]

The 'right'/'left' debate in countries like the UK and Spain is fairly meaningless imo. For example in Britain I literally have not noticed a difference between Labour in charge and the Tories. Same nanny-statism, chasing business out, legalism, feminism, crony-capitalism, free trade, mass immigration etc..

This ideology that rules Europe today I do not know what to call it. But its the same wherever you go. Its nearing the end of the road, just like communism ran out of road in the 80's. Sure they can keep bailing out for awhile, years even, but the horrific unemployment rate among young Spaniards shows where this is heading.

But Europe will go on, as will Spain. Ambrose from the Telegraph pointed out last year that Spain is one of the great and historic sovereigns of the world. The idea that it shoud totally wreck itself to pay some creditors is just stupid.

[madpenguin]

But Europe will go on, as will Spain. Ambrose from the Telegraph pointed out last year that Spain is one of the great and historic sovereigns of the world. The idea that it shoud totally wreck itself to pay some creditors is just stupid.

People love a good disaster, so long as it's not happening to them, this is why we are continually getting predictions of doom for various countries economies and then eventually some rather boring men meet and have some rather boring conversations and deals are made and life goes on, maybe with some riots and cuts but no financial armageddon.

I'm pretty sure market manipultion by some of the stronger funds is responsible for the chaos in the weaker Eurozone countries, notice they never go into crisis together?, apparently bond speculators got a bloody nose when they tried it on with Italy as many locals bought domestic debt (Cosa Nostra? )

Edited April 5, 2012 by madpenguin

[Peter Hun]

and deals are made and life goes on, maybe with some riots and cuts but no financial armageddon.

Its been four years of decline and there is still no end in sight.Spain, Portugal will default and when we look back at the decade it will be the Great Depression 2, talked about for the next 100 years.

So it is a Financial Armageddon, just as you would expect, a slow lumbering monster.

[silver surfer]

No it hasn't

It is still paying interest on loans.

When it eventually does default - you will know about it.

Yes, Greece has defaulted...they called it an "orderly default", but it still cost investors half their money.It doesn't have to cost all an investors money before it's a default!

[madpenguin]

Its been four years of decline and there is still no end in sight.Spain, Portugal will default and when we look back at the decade it will be the Great Depression 2, talked about for the next 100 years.

So it is a Financial Armageddon, just as you would expect, a slow lumbering monster.

Actually all the countries printing are defaulting, it's just that in some cases it's more obvious than others, the amount of times I've read "Of course Britain has never defaulted" when we have at least 6 times in the nations history (1932 being the last one), and probably would have again in 1945 without the loans from the US.

Both the UK and the USA are defaulting right now what with all the QE