re country debt loads:
Unfortunately, that graphic understates the problem. For instance, Spain has a debt load no worse than the U.S. or Germany. But interest rates on Spanish government debt have been spiking. The reason is, bond investors think the Spanish government will be forced to take on the huge bad debts of Spanish banks.
Spain already has an unemployment rate of 24%. If they let the banks fail, the unemployment rate will spike to levels not seen since the 1930s. Back then, the economic stress caused a civil war (one million dead), which the fascists won. Nobody in Spain has forgotten that history, which is why they will desperately try any expedient to put off the day of reckoning.
It is deeply ironic and disturbing, what is happening in Spain. Back in the 1930s, Germany "helped" Spain to "solve" their economic and political problems, by "restoring order." This was done by sending lots of tanks and warplanes to the winning side in the civil war, and lots of German experts to advise the incompetent Spanish. Today, Spain is once again in a deep economic mess, and once again they are looking to Germany to "help" them "fix" things, complete with lots of German experts instructing Spain on the details of "restructuring" their political and economic systems. |
