Here we go again! We have been told again and again and again that if we stick to the brilliant recession inducing plan imposed on us then by 2020 Greece’s Debt to GDP ratio will have reached 120% which for some unknown reason (metaphysical probably) is considered sustainable.
This week has seen a brilliant haggle over the missing 300 million Euro from the new cuts of billions we must make in order to reach the totem of 120% Debt ratio.
The whole mess is being presented to us as a perfect mathematical equation. No real facts involved. No knowledge of how economies do actually work rather than through models of dubious quality. So if we make new cuts of several billions everything will balance out. Can we help but think it is a little absurd that this whole restructuring plan of billions of Euros and cuts of several more billions of Euros will really be made or broken by 300 million, which was presented as the great stumbling block?
But not to fear! The great solution was found quite dramatically in the nick of time! Slash pensions!
And this brings us back to the debt ratio, being so precisely calculated at 120% in 2020. All of a sudden Mr Juncker has made his calculations and no, it will not be 120% but 128%! There was some dithering over the precise figure. No not 120% any more but 124%. Well no actually 128%! And this is unsustainable!
Well it is. Of course it is. And if you carry on slashing everything this way from wages to pensions to reduce the level of absolute debt, you are going to make it even more unsustainable.
I suppose these gentlemen and the ladies of course! Have never heard of the multiplier effect. If you take one Euro out of the economy it’s like losing several more. Not to mention that Mr. Juncker’s lovely sums are based on the presumption that tax revenue will be what has arbitrarily been calculated, quite forgetting that when wages and pensions are slashed and unemployment soars, there will be nowhere for these taxes to come from.
Gentlemen, Ladies please! The OTHER side of the equation is GDP, Gross Domestic Product! If all you can do is keep force feeding what passes for the Greek government with policies that only serve to deepen the recession, all your sums will be worth nothing! Because the only thing you have achieved quite spectacularly is to turn a bad recession into outright depression. And this, dear ladies and gentlemen, reduces the GDP figure horrendously. So when that side of the equation is in free fall, what is the point of insisting on surreal figures that can never be reached for the ratio?
Last week, a 39 year old mother of two young children jumped to her death in despair because with all the exorbitant taxation, wage slashing and unemployment, she could no longer make ends meet. And she is not a unique case. Suicides have gone up by 50% or so. Again a meaningless figure. But one that should make these nice people in Brussels and Washington with the exorbitant salaries and perks think.
But why should they? They are having a whale of the time! As for those on the receiving end of their idiotic so called policies well…. I suppose we could just let the eat cake. Couldn’t we?