mai said:
Well, certain experts suggest that US economy stopped growing somewhere in early 90s. A lot of smaller economies especially in Europe, e.g. Baltic states, were entirely based on IMF funding and despite rapid growth of GDP (up to 15% a year) and well-being now literally in ruins. |
Yes, I was talking healthily... debt can grow healthily aslong as economies can grow enough to cover them. What is happening is that the rate of debt is exceeding the rate of growth. When all those Eastern European countries started taking out loans in the 90s and the early 00s, the assumption was that the economies would be far better off now than what they actually are, hence the fallout of the debts.
The problem with the PIIGS wasn't the level of debts that they had per se - it was that their economies were spoiled by bubbles and fuzzy numbers which meant that it was assumed that they would be better off now, so the debt would be fine. People only noticed the, say, that the property bubble in Spain WAS a bubble after it burst.... the economy made a massive recession, and suddenly all preconceived ideas about Spain being able to pay back debts went down the shitter.
