Once upon a time
Submitted by admin on Thu, 09/08/2011 - 19:58Once upon a time there was a small country called 'Greece'.
The people of Greece were overjoyed when their country was selected to host a massive International sporting event - The Olympics - even though their country was the smallest to host the games in recent history.
The right wing Government at the time of the Olympics borrowed heavily, keeping their comparatively generous welfare state afloat and gambling on the hopes that the Olympics would usher in a huge economic boost from increased tourism.
Unfortunately, due in part to a major unanticipated disaster (the 9/11 attacks) the revenue generated by the Olympics was far lower than originally anticipated. The hoped for economic boost never came, and following a global recession the Greek people have wrestled with crippling debt and austerity measures ever since.
Once upon a time there was a small country called 'New Zealand'.
... Okay, I think you know how this one ends.
Comments
How much is the debt per capita?
I'm still going to the games though...
@arran According to Wikipedia we were hovering at 30% public debt last year, which isn't bad compared to most other states. That said, we're currently borrowing $380 million and have been borrowing massive amounts of money for some time, and will no doubt continue borrowing for the forseeable future.
Incidentally we're apparently at $71.6 billion NZ of public debt (not even counting debt from the private sector) which is about $17,900 per person.
@Stephen Enjoy the games, I certainly wasn't trying to guilt trip anyone ;)
Well what can increase the public debt is simply importing more than you export. This is because in order for the money supply to remain the same (ie, not induce deflation or inflation) the surplus country needs to re-invest that money back in they country, why not buy public sector debt? Everything else is probably a bit too risky for governments/central banks. So you might want to consider devaluing the kiwi dollar in addition to reducing spending. Although if you don't spend the money it might be like continuing to allow investment/borrowing-money but not trying to spend it on something that increases wealth generation.
Semirelated link.. I read Pettis stuff, and have been for a year, it's really good. He covers trade imbalances a lot!
http://china-economics-blog.blogspot.com/2010/03/pettis-on-chinas-us-res...
Also. US and Greek are more than double that. Wonder what AUS is like..
Interesting wiki articles:
List of countries by public debt
List of countries by external debt
I think, as far as public debt goes it doesn't look too bad for NZ or Aus. But by external debt as a percentage of GDP, we're not too pretty.
Heh. Japan wins!