So, financial numbers are starting to come out of Greece that show that the countrys debt is now larger than it's economy.

2009 GDP - $USD339.2 billion (2009 est.)
Greece's public debt stands at about 300bn euros ($USD419bn)

This means that the country has more debt than it's able to produce in goods and services. The 2009 estimate was a 108% Debt vs. GDP. It's obviously higher than that. The big problem facing Greece right now is that in order to keep paying for the thing they are paying for they have to issue debt at a higher interest rate so that people will keep lending the country money. This means that when the lower interest rate debt comes due in a few years then that debt will be refinanced into the higher rate causing even more problems.

This example just goes to show that the general way that governments are spending now is slowly bankrupting the countries. Countries can't continue to spend money the way they are and expect to be able to keep the standard of living at the level it's at. I'm curious what other people's opinions are on this issue. Not so much Greece specifically but the over-spending of governments in general. Why do you think that governments seem to perpetually keep their countries in huge amounts of debt?

I think that the country's government do this...

1. Because it all starts when the government is not in debt, but they ask for a loan to complete a project... then after that is done they don't have enough money to pay back the first so they borrow even more money to pay back the first one and so on... what was a modest loan turns the country into a financial crisis.

2. Because the government is not limiting their spending enough... they are not seeing the consequences of the future when they are spending tons of money at the present, which comes back to haunt them by way of a lot of debt in the future...

Originally posted by septembern

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I think that the country's government do this...

1. Because it all starts when the government is not in debt, but they ask for a loan to complete a project... then after that is done they don't have enough money to pay back the first so they borrow even more money to pay back the first one and so on... what was a modest loan turns the country into a financial crisis.

2. Because the government is not limiting their spending enough... they are not seeing the consequences of the future when they are spending tons of money at the present, which comes back to haunt them by way of a lot of debt in the future...

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what you said has nothing to do with WHY it happened. You explained how it happens to most governments. They overspend or borrow for something and then for whatever reason can't pay the loan back and have to borrow more. But this doesn't get to the root of why it happens.

Well, honestly, Greece has never had the best or most stable economy. And I think that with the other world economies taking the hit they have it only compacted their problems.

Now the interesting question is "is this a sign that capitalism is faulty?"

capitalism isn't the problem. Capitalism thrives when governments stay out of the equation. It's the huge government spending and taxation that is the real problem.

Originally posted by geeogree

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So, financial numbers are starting to come out of Greece that show that the countrys debt is now larger than it's economy.

2009 GDP - $USD339.2 billion (2009 est.)
Greece's public debt stands at about 300bn euros ($USD419bn)

This means that the country has more debt than it's able to produce in goods and services. The 2009 estimate was a 108% Debt vs. GDP. It's obviously higher than that. The big problem facing Greece right now is that in order to keep paying for the thing they are paying for they have to issue debt at a higher interest rate so that people will keep lending the country money. This means that when the lower interest rate debt comes due in a few years then that debt will be refinanced into the higher rate causing even more problems.

This example just goes to show that the general way that governments are spending now is slowly bankrupting the countries. Countries can't continue to spend money the way they are and expect to be able to keep the standard of living at the level it's at. I'm curious what other people's opinions are on this issue. Not so much Greece specifically but the over-spending of governments in general. Why do you think that governments seem to perpetually keep their countries in huge amounts of debt?

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Whoa! That's insanity! I'm praying to avoid that!

What is really pissing me off with Government spending is they are taxing stuff that does not need to be taxed in order to gain more money but it leads them even further down the rabbit hole.

I just saw a recent article on yahoo which said raising tax on cigarettes $1 will raise an extra billion per year. What is funny though is that they taxed cigaretts 100% a few years back and that didn't do much good did it?

I even saw a bit back they wanted to tax fat people no joke. Just goes to show how far they will go to tax the wrong things.

Some things can be solved without money. But when you think with dollar in mind first nothing is possible without money. Since they got unlimited supplies they don't have to worry a bit about it because they are not the ones getting bankrupt when you think about it. As long as people buy stuff that has tax on it they will be in business.

Maybe instead of tax, government should find another way to raise money. Eliminate all tax and have them earn profits like normal businesses. They operate in private so why not make them private. Government is like one big wall street each purchase we make is an investment into government.

Now when a company is doing bad do you continue to invest money into it? No you would want to pull out probably. But we can't do that, we are forced to continue paying money to a company going bankrupt. So the only way to get it through their thick skulls is to abolish tax and make them earn money like a normal business would do without leeching off of everyone else.

This is pretty interesting about how the greek economy has come to. From history back in the 4th century bc to the early 2nd century bc I believe Greece had the most power due to military expansion and spoils of conquest and such. Present day Greece I am unsure what their prodcuts are maybe someone can enlightenment me on it. The figures That geo has up are startling a vision of other countries and what they are doing about the same as the greeks are. Many governments are unable to realize that spending of mass money will not help the country in the economy (U.S. for example) Hopefully otehr countries take this into account and try and figure out solutions so they will not end up like Greece in the future.

yeah, the real problem with debt.... for both individuals, companies and countries is the burden the debt brings. Quite often there are set monthly payments that have to be made which forces you to put some cash aside to make these payments. And if times get tough the debt is still there and still has to be paid regardless of whether or not you have the cash flow to handle it.


I do understand that major infrastructure projects require large loads of debt most of the time to get them done.... but beyond those I don't see why countries go into so much debt. And in the end the large debt uses up tax revenue that could otherwise be put towards things like social programs and things of that nature that would actually help people.

I agree Geeo... There are certain funds that need to be moved around in this country to better suit our nations infrastructure. There are alot of things that could be done to take away atleast some of the debt, but also like you said in a functioning nation there will always be a debt owed to someone else. I believe its a continous event in our nation.