Today fears rise for the Spanish economy and for the Cyprus economy too. So lets sort some things out not in economical terms. Greece, Ireland, Porugal, Spain today Italy, Cyprus tomorrow suffer of huge financial problems which leads to certain conclusions. Their standard economical model is not working and the reasons could be 2 and 2 only. Either the model is not applied correctly or the model is not right from the beginning.
Lets take the first option. For sure at least for Greece that I know there is a big tax evasion money is not handled good either by the government and by the citizens. Productivity is low and there are huge problems in the organisation of the state. Greece government borrowed money that can not be paid back. Lets suppose we have some magical wand and all these problems disappear at once. All people pay taxes people become more productive and money is handled more reasonable. This will lead in not buying huge amount of weapons public education will not need private schools and the same applies for health. People will not spend money in a lot of things since as we think reasonable we do not need a super computer for every day needs nor a JEEP car to move in the cities. This will lead mathematically in bad numbers in the economy!!!! Nowadays model DEMANDS spending and over consuming and as long as you can do that everything is OK. The moment you stop doing that everything collapses.(Why stopping and how you have shortage of money is another big discussion) How can you do that then when you are short of money? But of course by borrowing money from someone else. And why that person lends you money? Because he knows that the money he lends you will return to his pocket and furthermore will be doubled. How money will be doubled? First by creating a debt and second by buying products you probably do not need. It is like paying the mafia to protect your store from mafia!!!!
I reached to the conclusion that spending in order to buy products creates the whole problem. So why not producing the products you need. Mainly for two reasons first when they give you money to grow, lets say pineapples, for 5 years of course you grow pineapples and all your farming is going to that direction. At the end of the 5 years when you are no longer paid for pineapples you are left with one product you do not need and with destroyed farming. Secondly globalised economy works in the interest of certain people who can produce with minimum cost and bring it to sell it to others that are paid highly (they are paid highly but at the same time their debt is rocketing in the sky!!!). The conclusion is that sooner or later most of the economies will face a debt crisis and this will happen either by having small production and extreme debt(Greece) either by having huge production and nowhere to sell(Germany).
What is the bright side of life then? In the next decade most countries will face huge problems like the ones we are facing in Greece. Up until now most people all over the world think that the crisis that happened in Greece is a Nemesis for all the thing we omitted to do (which in a certain degree is true) and can not face the truth that this problem is systematic and has to do with the way this system is constructed. When this crisis becomes global and with no therapy people that are supposed to do everything right will start THINKING what went wrong and surely will realise that changes need to be done. Which are these changes. I have some in mind. Off-shore companies which is a nice clever way for the rich to evade taxes should stop existing. Furthermore complicated stock market products that help to hide the problems below the carpet should also stop. 2% of the rich that keep 50% of the global economy should be distributed equally. Golden boys that earn from disasters (you can can have CDS at the same time that you do not have public debt!!! How crazy is this is like me having your car insurance and earn money when you crash and at the same build roads. Is it crazy to build bad roads so that you crash and I earn money?) is a profession with no purpose of existence. Humanity has the technology to produce, protect the planet and at the same time give a standard affordable living for all the people in China ,states , Greece, everywhere as long as not the wealth is gathered in the hands of a few. So unfortunately we have to pass the passage of suffering in order for humanity to arise and build a better world and this is something I personally see in 15 years time
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