so then I figured the heck with stock investing, I'll just loan money at interest like the big banks do. I tried loaning money to the government but got concerned about their ability to pay me back my principle. And then my neighbor came calling and said he was going to lose his job if he couldn't buy a new car because his old car broke down and he didn't have money to fix it. So I loaned him the money at twice what I was getting from the US government, and the son of a bitch quit his job and left town and I haven't heard from him since. Now who's fault is that?
It seems like no matter what I do, somebody always screws up, and they never want to accept the blame for it. That's what's wrong with the world today.
pensions replaced with subsidies and mortgages remortgaged by government might be cheaper than issuing bonds and printing money to pay higher and higher interest on them,just start over,least of several evils..in the end we pay...do we have to pay the banks a huge cut....why not pay the smallest amount
pensioners and homeowners don't pay bribes. Banks do, and for that they should get their cut. Cut out the banks and you cut out the bribes and the whole thing deteriorates into some kind of democratic anarchy.
no politician will ever cut spending. Spending is all they know. That's how they got where they are. Spending will only be cut when there is no more money to borrow. And before that happens they will just keep borrowing more and more until the currency they are borrowing becomes worthless. But getting back to opie's post, what ever happened to collateralized loans? If Greece borrows money and can't pay it back, doesn't that mean the bank now owns Greece? What the heck the bank is going to do with a country like Greece beats me. If it was me I'd just sell it to the highest bidder. There ought to be enough billionaires in the world to get together and buy it. They could just turn it into a big golf course and sailing club.
I don´t disagree with your view that politicians are at fault. The problem is that the democratic system is designed in a way to make spending public money the "best bet" for any politician in the world. It´s a classical problem of the right mixture between incentives and punishment. Now if you could design a system where the politicians would be held responsible with their assets we would have an entirely different picture (quite difficult to come up with a fair system, I know). Same asymetrical situation also applies to the hedge fund/financial world by the way. Back to the original topic. I think very few disagree that politicians, voters, overleveraged consumers etc are at fault and should suffer some form of financial punishment. At the same time lots of people/countries (the "drug dealers") benefited immensely from the current system at the expense of the first group. First through huge profits/bonuses/returns/salaries etc on the way up, then from the massive bailouts that prevented the system from collapsing. Wouldn´t it be wiser for the "winners" to give up a few percent of their wealth (and I include myself in this group) to prevent losing much much more later to an uncontrolled implosion of the system?
I haven't sat down to think it through in detail, but my gut says...there wouldn't be. I mean, possibly for Greece, but no way for, say, all the PIIGS. If so, that would raise a really interesting question re: sovereign debt in general.
So now you got me curious. Top 10 of 2011 have combined wealth of roughly $400B. Top 20 total about $650B (yikes, Pareto at work, even here). The PIIGS total up to (round numbers)... Portugal - $500B Ireland - $2,300B Italy - $2,300B Greece - $500B Spain - $2100B Nearly $8T. The entire Forbes 400 couldn't make good on that. It appears that lending rates for sovereign borrowers have been set with little regard for the fiscal realities...