The Power of Debt

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Tremonti and Bossi
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For every 100 euro in taxes that we pay, 18 are interest on the Public Debt. The issue of the Public Debt is simple: if we don’t bother about the Debt, the Debt will bother us. It is bothering us every day, since its explosion that happened with the governments of Craxi and Andreotti. Cuts for schools, health, research. The decay of the Country. The Debt takes away resources from the services and from development to give it to politics and the lobbies. Italians pay taxes for interest payments on a colossal debt contracted by others in their name.
The year 2008 closed with about 1,700 billion euro in Debt. In the year 2009, we expect to pay interest payments of 80 billion. With 80 billion we would be able to restart the economy, quite a different kettle of fish from the “Social Card”. In the year 2009 there are State Bonds coming due for payment and on offer for between 2 and 300 billion euro. Who will buy them? Tremonti is reassuring us. Let him tell us whether there are takers, whether there are finance groups, or bankers who have already taken up the offer. Whether Mediaset has already ordered something, whether the patriots Colaninno and Tronchetti are already on the waiting list. Italy cannot wait until the last minute to find out. If necessary, let them start a collection among the public service employees. I know that you have already thought about that. Instead of 30% of the salary you could give an equivalent amount in State Bonds. It’s not a bad idea. Public employees buy the Public Debt by the mechanism by which the State pays public salaries. It’s a bit contorted but it could work.
The “spread”. Have you already heard this word? It sounds like a soft drink. Halfway between a “sprite” and a “chinotto”. The “spread” is the difference in the interest paid on State Bonds of one nation and that of another nation. In order to sell our State Bonds, we have to offer interest rates that are higher than those of others, like Germany, France, the Netherlands ... and the spread gets bigger. It gets bigger like the taxes do. It’s like a bit of elastic that is pulled. State Bonds, if bought in large quantities are insured. It’s insurance against the collapse (the “default”) of the State that issues them. The cost of Italy’s insurance is going crazy.
In 2008, the State Balance Sheet went into the red by 52.9 billion euro. The coupling Berlusconi/Tremonti is unbeatable in getting the Italians into debt. And it’s also in order to cover this 52.9 billion that it’s necessary to sell the BOT and CCT {government bonds}. The power of Debt is enormous. It’s a power that the Italians have left to the politicians. They can get us into debt without the need for financial cover, mortgage our future when they want, for how much they want. The Power of Debt must be taken from them before the Italy hayloft catches fire. Crikey. I’m running into the kitchen. I can smell the pong of Tremonti burning.

Posted by Beppe Grillo at 08:08 PM in | Comments (1)
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Berlusconi... vai con era zero e B plan... Q00B+

Posted by: rosa nera | January 7, 2009 10:03 AM


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