There is a lot of discussion on television about money and debt and whether or not Italy will default on its national debt or be bailed out by the IMF or whatever. What they need is an eight-year-old kid to sort it all out. Even an eight-year-old can understand basic finances. If you spend more than you earn sooner or later it will catch up with you. If a company which makes bread makes 10000 euros per month selling bread and pays its employees 5000 euros per month then there is only 5000 euros available with which to buy the necessities of life for the workers. So who buys the rest of the bread ? Scale that up to the size of a capitalist nation and the numbers don’t add up. The profit needs to come from somewhere which means that there has to be growth or borrowing. That is how capitalism works. Human history tells the story of a range of civilisations which collapsed because they became too
Liam Mor's Blog