Re: [Goanet] From Greece to Goa: The Anatomy of Debt Traps
Belt tightening exercises were incorporated in GSRP's constitution in the year 2000, fifteen year ago, under articles 34 and 38, in order to tackle the profligate attitude towards spending tax-payer's money by our Goa's elected representatives. It is little wonder that those interested in contesting elections find GSRP a bit too strict, advocating advices likeIf one wants to clean clogged/choked gutters, one needs to dirty one's hands, and want us to relax these two articles which of course GSRP refuses saying that we shall use the bypass methods to remove chocked/clogged gutters without dirtying hands. Anaticipating such demands, GSRP went ahead to SEAL these sensitive articles from future amendments for life. GSRP On Sat, Jul 4, 2015 at 7:11 PM, Mervyn Lobo mervynal...@yahoo.ca wrote: V M wrote: http://timesofindia.indiatimes.com/city/goa/From-Greece-to-Goa-The-anatomy-of-debt-traps/articleshow/47931800.cms Despite large hikes in Goa's share of cash from the Central fund (this year up a whopping 10%), Goa's public debt is heading upward of 10,000 crore and the state is reduced to the fatal strategy of borrowing at market rates to service interest payments. No less than Greece, this is the definition of unsustainable economic policy. -snip- That highly reasonable analysis by (Laxmikant) Parsekar has been turned on its head by his own BJP government's outsized spending spree of a scale never seen before in Goa. A third Mandovi bridge for more than 600 crore, the controversial bridge to Tiracol (home to exactly 300 Goans) for more than 80 crore, extraordinarily dubious road-building and road-widening exercises for additional hundreds of millions of rupees. -snip- Just as the hated 'troika' of lenders and finance ministers imposed on Greece, Goa's political elites are now also talking of selective austerity which does not allow increased spending on the inadequate healthcare system, or on the state's woefully mediocre education infrastructure. Pay close attention to Greece by all means, because much the same is happening in Goa too. -- Well written, VM. I only learned about the debt accumulated by the Goa Govt a week ago. The figures mentioned were higher than yours. The problem of course is, who is going to pay for these loans? Just like Greece, the day will come when the Goa Govt will not be able to service its loans and pay its bills. The first Govt service cut usually effects education, the next is health care and then it is the services provided to everyone else. There is an easy way to resolve this problem of overspending. All you need is a law that says any representative who votes to spend more than 106% of income received, will not be eligible for re-election to that position again. This is the only way elected representatives will come to their senses. They will either increase income collection (taxes) or decrease spending. Grexit is going to adversely effect more than Greece. You will soon hear of British banks who lent money to the German banks, who in turn lent money to Greek commercial banks. A week after the Greek businesses stop paying their invoices, US financial institutions will admit to have lent money to British banks that ultimately reached the Greece er, financial system. We are in for some interesting times (if one is not a Greece resident.) Mervyn PS. I wonder if it is too late to get some short positions? :-)
[Goanet] From Greece to Goa: The Anatomy of Debt Traps
http://timesofindia.indiatimes.com/city/goa/From-Greece-to-Goa-The-anatomy-of-debt-traps/articleshow/47931800.cms The entire world is watching Greece with bated breath this week, as its new socialist government attempts to navigate through a thorny economic crisis that poses unprecedented threats to the nascent Euro-zone, the imprimatur of the international banking system led by the International Monetary Fund (IMF) and the European Central Bank, as well as the fragile recovery that has followed the global financial crisis of 2007-08. But Greece is not alone in drowning in huge public debt—many other countries are nearly as badly situated, and several states in India—including Goa—now carry similarly worrying burdens. How did Greece—a developed country integrated into the very wealthy European Union—manage to slide into such a grave predicament? The short answer is simple enough: The country kept spending more than it collected in tax revenues, mainly to keep investing in grandiose and unnecessary infrastructure (such as the lavish stadia for the 2004 Olympic Games), and to distribute as sops to government cronies. Greek political and economic elites were addicted to cheap borrowing from (mainly German and French) banks, taking out ever-increasing loans to settle ever-increasing interest payments. That party ended in 2009 when the possibility of default became clear. Since that point, Greece has struggled to borrow money to service existing debt, and has been forced to pay market-level interest rates that dug its economic hole so deep that IMF now says there is no possibility of repayment for at least 20 years. While there are many similarities between the position Greece finds itself and the predicament of other countries and states—including Goa—the inadequate political integration of Europe over the past 15 years is a complicating factor. It was Greek membership in the European Union that gave the country the credibility to borrow vast sums of money from EU institutions, but when the crisis exploded, the decision-makers in Brussels, Paris and Berlin chose to rescue their own banks and taxpayers with bailout packages, while imposing severe austerity measures on the Greeks. The result has been comprehensive economic collapse, 25% reduction in national GDP, and crippling unemployment rising above 50% for young people. Tiny Goa is cushioned by the vast Indian Union, a much more effective support system than the Europeans have managed to create. Budget shortfalls engineered in Porvorim are highly unlikely to set off the kind of chain reaction feared if Greece is forced to leave the EU, 'Grexit', and returns to the drachma as its currency standard. But the same economic principles playing out in Europe apply to India's smallest state's burgeoning debt trap, which features identically irresponsible borrowing, spending on scam infrastructure, and sops to government cronies. Despite large hikes in Goa's share of cash from the Central fund (this year up a whopping 10%), Goa's public debt is heading upward of 10,000 crore and the state is reduced to the fatal strategy of borrowing at market rates to service interest payments. No less than Greece, this is the definition of unsustainable economic policy. Ironically, it was the current chief minister of Goa who most aptly summarized the impending crisis when he was in opposition in 2010. He said then—reckless expenditure by the government has led to liabilities exceeding 7,000 crore, an increase of 100% in the last five years... (it is) reckless expenditure on the creation of redundant assets, most of which are of a non-welfare nature and turn out to be liabilities which incur high capital costs and recurring maintenance and operational costs. That highly reasonable analysis by (Laxmikant) Parsekar has been turned on its head by his own BJP government's outsized spending spree of a scale never seen before in Goa. A third Mandovi bridge for more than 600 crore, the controversial bridge to Tiracol (home to exactly 300 Goans) for more than 80 crore, extraordinarily dubious road-building and road-widening exercises for additional hundreds of millions of rupees. While the outrageously expensive Lusofonia Games stadia lie empty and increasingly derelict, another series of giant white elephants are in the planning stages and being tendered. The spectre of Mopa airport comes ever closer, another unwanted money pit of thousands of crores. Just as the hated 'troika' of lenders and finance ministers imposed on Greece, Goa's political elites are now also talking of selective austerity which does not allow increased spending on the inadequate healthcare system, or on the state's woefully mediocre education infrastructure. Pay close attention to Greece by all means, because much the same is happening in Goa too.
Re: [Goanet] From Greece to Goa: The Anatomy of Debt Traps
To Goanet - Just checked Goanet after a long time. VM's article does not scratch even the surface of the issue. There are deepercomparisons to be drawn from the Greece debacle and the situation in Goa than treated by VM. This excellent article by Michael Lewis from 2010 provides a window. In several places you can replace Greek/Greece with Goan/Goa.Greece wasn't a developed country as VM claims, not in the sensecommonly understood anyway. http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-201010 Mervyn - Greece is a rounding off error as far as the American economy is concerned. Regards, r
Re: [Goanet] From Greece to Goa: The Anatomy of Debt Traps
V M wrote: http://timesofindia.indiatimes.com/city/goa/From-Greece-to-Goa-The-anatomy-of-debt-traps/articleshow/47931800.cms Despite large hikes in Goa's share of cash from the Central fund (this year up a whopping 10%), Goa's public debt is heading upward of 10,000 crore and the state is reduced to the fatal strategy of borrowing at market rates to service interest payments. No less than Greece, this is the definition of unsustainable economic policy. -snip- That highly reasonable analysis by (Laxmikant) Parsekar has been turned on its head by his own BJP government's outsized spending spree of a scale never seen before in Goa. A third Mandovi bridge for more than 600 crore, the controversial bridge to Tiracol (home to exactly 300 Goans) for more than 80 crore, extraordinarily dubious road-building and road-widening exercises for additional hundreds of millions of rupees. -snip- Just as the hated 'troika' of lenders and finance ministers imposed on Greece, Goa's political elites are now also talking of selective austerity which does not allow increased spending on the inadequate healthcare system, or on the state's woefully mediocre education infrastructure. Pay close attention to Greece by all means, because much the same is happening in Goa too. -- Well written, VM. I only learned about the debt accumulated by the Goa Govt a week ago. The figures mentioned were higher than yours. The problem of course is, who is going to pay for these loans? Just like Greece, the day will come when the Goa Govt will not be able to service its loans and pay its bills. The first Govt service cut usually effects education, the next is health care and then it is the services provided to everyone else. There is an easy way to resolve this problem of overspending. All you need is a law that says any representative who votes to spend more than 106% of income received, will not be eligible for re-election to that position again. This is the only way elected representatives will come to their senses. They will either increase income collection (taxes) or decrease spending. Grexit is going to adversely effect more than Greece. You will soon hear of British banks who lent money to the German banks, who in turn lent money to Greek commercial banks. A week after the Greek businesses stop paying their invoices, US financial institutions will admit to have lent money to British banks that ultimately reached the Greece er, financial system. We are in for some interesting times (if one is not a Greece resident.) Mervyn PS. I wonder if it is too late to get some short positions? :-)
[Goanet] From Greece to Goa: The Anatomy of Debt Traps
http://timesofindia.indiatimes.com/city/goa/From-Greece-to-Goa-The-anatomy-of-debt-traps/articleshow/47931800.cms The entire world is watching Greece with bated breath this week, as its new socialist government attempts to navigate through a thorny economic crisis that poses unprecedented threats to the nascent Euro-zone, the imprimatur of the international banking system led by the International Monetary Fund (IMF) and the European Central Bank, as well as the fragile recovery that has followed the global financial crisis of 2007-08. But Greece is not alone in drowning in huge public debt—many other countries are nearly as badly situated, and several states in India—including Goa—now carry similarly worrying burdens. How did Greece—a developed country integrated into the very wealthy European Union—manage to slide into such a grave predicament? The short answer is simple enough: The country kept spending more than it collected in tax revenues, mainly to keep investing in grandiose and unnecessary infrastructure (such as the lavish stadia for the 2004 Olympic Games), and to distribute as sops to government cronies. Greek political and economic elites were addicted to cheap borrowing from (mainly German and French) banks, taking out ever-increasing loans to settle ever-increasing interest payments. That party ended in 2009 when the possibility of default became clear. Since that point, Greece has struggled to borrow money to service existing debt, and has been forced to pay market-level interest rates that dug its economic hole so deep that IMF now says there is no possibility of repayment for at least 20 years. While there are many similarities between the position Greece finds itself and the predicament of other countries and states—including Goa—the inadequate political integration of Europe over the past 15 years is a complicating factor. It was Greek membership in the European Union that gave the country the credibility to borrow vast sums of money from EU institutions, but when the crisis exploded, the decision-makers in Brussels, Paris and Berlin chose to rescue their own banks and taxpayers with bailout packages, while imposing severe austerity measures on the Greeks. The result has been comprehensive economic collapse, 25% reduction in national GDP, and crippling unemployment rising above 50% for young people. Tiny Goa is cushioned by the vast Indian Union, a much more effective support system than the Europeans have managed to create. Budget shortfalls engineered in Porvorim are highly unlikely to set off the kind of chain reaction feared if Greece is forced to leave the EU, 'Grexit', and returns to the drachma as its currency standard. But the same economic principles playing out in Europe apply to India's smallest state's burgeoning debt trap, which features identically irresponsible borrowing, spending on scam infrastructure, and sops to government cronies. Despite large hikes in Goa's share of cash from the Central fund (this year up a whopping 10%), Goa's public debt is heading upward of 10,000 crore and the state is reduced to the fatal strategy of borrowing at market rates to service interest payments. No less than Greece, this is the definition of unsustainable economic policy. Ironically, it was the current chief minister of Goa who most aptly summarized the impending crisis when he was in opposition in 2010. He said then—reckless expenditure by the government has led to liabilities exceeding 7,000 crore, an increase of 100% in the last five years... (it is) reckless expenditure on the creation of redundant assets, most of which are of a non-welfare nature and turn out to be liabilities which incur high capital costs and recurring maintenance and operational costs. That highly reasonable analysis by (Laxmikant) Parsekar has been turned on its head by his own BJP government's outsized spending spree of a scale never seen before in Goa. A third Mandovi bridge for more than 600 crore, the controversial bridge to Tiracol (home to exactly 300 Goans) for more than 80 crore, extraordinarily dubious road-building and road-widening exercises for additional hundreds of millions of rupees. While the outrageously expensive Lusofonia Games stadia lie empty and increasingly derelict, another series of giant white elephants are in the planning stages and being tendered. The spectre of Mopa airport comes ever closer, another unwanted money pit of thousands of crores. Just as the hated 'troika' of lenders and finance ministers imposed on Greece, Goa's political elites are now also talking of selective austerity which does not allow increased spending on the inadequate healthcare system, or on the state's woefully mediocre education infrastructure. Pay close attention to Greece by all means, because much the same is happening in Goa too. __._,_.___ Posted by: V M vmin...@gmail.com | Reply via web post | • | Reply to sender | • | Reply to group | • | Start a New
