Posts Tagged ‘PIIGS’

By Les Dunaway

During the budget debate last December, during the lead-up the the debt-ceiling debate, … I’ve listened to statements made by various politicians, pundits and some real people. I’ve concluded that there really are people who believe that we can just raise taxes to support any desired level of spending. When they are asked about the example of Spain, Portugal, Greece, Ireland, … they respond “Well, that’s Europe; that’s different”. Since I’m not masochistic, I haven’t tried to take the conversation further.

I’m reminded of a story a friend told on his wife when we were all 20-something. The wife had received an overdraft notice from the bank and told the husband “This can’t be right! I still have checks in my checkbook”.

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By Les Dunaway

Well, it’s been a rough week! With every indication of more rough times to come.

The economy continues to sputter and 1Q11 was worse that we thought [read]

There’s lots of punditry about what the debt ceiling impasse will mean:

• Debt ceiling: Will I get my Social Security check? [read]
• What Will Happen If Debt Ceiling Is Not Raised And The US Defaults? [read]
• What Will Happen If The Debt Ceiling Isn’t Raised? [read]

But, here is the real issue:

• Wiedemer: US Treasurys Now a ‘Toxic Asset,’ Debt Deal Won’t Fix It [read]
• Pew: US Becoming a Second-Rate Power [read]

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By Les Dunaway

This is Vol 1 Issue 1 of a weekly discussion intended to lead to better understanding of financial issues facing our country.

I will, each week, take some issue from the current/recent news and discuss the issue itself and how it impacts our country and our way of life. I hope that there will be an ongoing discussion through comments to my posts.

I’m beginning this discussion because I believe that our country is at financial risk because of the bad decisions made in the past. (See below for other writings on this subject) I will stick to the numbers. Fans of Dragnet will recognize my tribute to Sgt Friday in the title. This is a non-partisan issue and if I write anything that sounds partisan, please call me on it. However, when we must discuss specific policies, let’s not yell “partisan” but rather take the Christian approach of “Hate the sin, love the sinner”.

To begin, I want to talk about why I believe our country and our way of life is at risk. At a basic level, it’s simple – no entity, a person, a family, a business or a nation can continue to spend in excess of income indefinitely. At some point, the debt will accumulate to a point where the debt and interest payments (debt service) exceed the amount of the income available after paying basic necessities (disposable income).

See Portugal, Ireland, Italy, Greece and Spain – known in the financial world as the PIIGS for current, real world examples. Read the rest of this entry »