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Clarke and Dawe’s European Lending Merry Go Round

Australia's brilliant political satire team of Clarke and Dawe do a great job in exposing the fundamental faults of the Euro debt-crisis.

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Facts & Figures: New York Times Diagram: Interlocking Debt Positions of European Countries --- Selected viewer comments: --- It's important to clarify that "economies" don't lend money to other "economies". Banks, corporations, funds and private individuals lend money to governments, by buying government issued bonds. So, in the case presented here, it's not "Spain" owing "Italy" $41 billion. It's the Spanish government, owing $41 billion to various entities within Italy, and vice-versa: the Italian government owes money to various parties within Spain. --- There is a good answer to where the money should come from and it isn't the public coffers. The process went a bit like this: 1) Private corporations in Britain France and Germany invest in the member countries of the EU, often in spectacularly worthless investments many of them second and third order repackaging of some underlying assets. 2) Investments go sour, private sector retreats into bonds, lowering profit margins, lowering tax revenues to the state, and by the purchase of bonds simultaneous with decreased revenue balloons public debts. 3) EU member states on the periphery begin programs bailing out banks to increase liquidity further emptying public coffers. So, the program? Private sector messes up - public sector pays. Why should our publicly managed system be attacked because the private sector had a crisis? Well, because that's capitalism. The alternative is to expropriate the capital of the people who, through this whole process, have remained incredibly rich. --- Actually, that's NOT capitalism. That's fascism (ie, corporatism). The big companies / individuals own the government essentially. They are too intertwined to be allowed to fail, thus they are bailed out and private losses become public.   from: boingboing.net