Thursday, June 18, 2009
The Italian Economy: Day 11
"Cake goes to those groups who have trade unions representing them."
Another interesting note: Italy pays about 5% of GDP each year as interest on its national debt. The debt is expected to grow to about 120% of GDP by the end of 2010, which puts it at close to double American debt. However, Italy actually has a primary balance surplus. Primary balance is the revenues less expenditures, excluding interest on national debt. That won't happen this year with the recession, but most years this has been the saving grace of the government that allows it to continue borrowing. However, until Italy gets the actual budget into surplus, it will not be able to pay down its debt, making it the American homeowner borrowing from one credit card to pay for another.
Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty