Wasting Time With Alex
Monday, June 14, 2010
Junk ratings and collectivist states
Here is what the future of those that adopt socialism looks like. No supposedly modern western nation has flirted as heavily with socialism – in fact there are is a large part of the population that is down with hard core communism – than the Greeks. And I say supposedly modern, because the Greeks sure as hell don’t show the productivity level of a modern state. Then again, when you get paid for 13 months during a 12 month year, have a couple of those months off, retire at 63 – that’s new and imposed as part of the austerity measures, btw – don’t work much when you are supposed to (I know this from first and second hand experience) and in general have an economy that is primarily based on ways of avoiding the normal and massive taxation with the least amount of work, some might think it is modernity, but most of us see is as slackers living off others.
The rescue package “effectively eliminates any near-term risk of a liquidity-driven default and encourages the implementation of a credible, feasible, and incentive-compatible set of structural reforms, which have a high likelihood of stabilizing debt service requirements at manageable levels,” said Moody’s senior analyst Sarah Carlson. “Nevertheless, the macroeconomic and implementation risks associated with the program are substantial and more consistent with a Ba1 rating,” Carlson added.
Yeah, that’s because basically everyone knows this stuff eventually fails and causes an economic implosion. If your Income is X and your expenditures are 1.3X, something has got to give. And more borrowing, like Greece was allowed to do, isn’t the answer. And keep in mind that the Greeks just got assurance that the other idiots that comprise the EU can’t afford to let them fail. Of course, their reaction will be to pretend they are fixing things, but we will be back at this exact same spot in a short time. After all, why do any kind of heavy lifting when the other suckers have to bail you out? Of course the Greeks won’t be the last ones needing a bailout. That’s just going to speed up the day when the Germans and other contributors - European countries and the US – will find themselves in the same boat only their money supply will have been wasted on the various Greek-a-likes.
Fitch currently rates Greece at BBB-minus, the lowest investment-grade level, with a negative outlook, which implies more than 50 percent possibility of a donwngrade.
That’s for those that are going to argue otherwise. Collectivism sucks. It is doomed to failure and causes nothing but suffering. One has to wonder why we think following these lemmings off the cliff is a good thing.
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