Sunday, October 2, 2011

Occupy Wall Street !!!

'Occupy Wall Street', or 'Occupy YourCityHere', has taken on an infectious vibe akin to the Arab Spring movement witnessed earlier this year. And, as other online articles have pointed out, it's no surprise that this theme appeals to so many. The global financial system is on the brink of collapse, and we've discovered that throwing more money (debt) at the problem won't solve anything.

Traditionally, an economist might use a debt-to-GDP ratio to roughly estimate the stability or health of a nation's economy and ability to sustain their current economic growth. If a country spends more than it makes in a year, then the budget is not balanced, and they will have debt carry over into the following year. Historically, countries have gotten into trouble when their total or public or government debt-to-GDP ratio's have gotten too high. In actuality, countries can only afford to spend between 5 - 10% of their budget on debt repayment. Depending on our position in a credit bubble, we might be told, or incentivized to do one of two things - spend or save. Though there are times when it is not so clear what we should do with our money (for those that have any). We have to cut back on spending to pay off our debts, but we also have to spend money to stimulate the economy. This sounds challenging, no?

The Greek austerity measures saw cut backs and spending happening simultaneously, and have gotten them no further ahead of where they were three years ago. So, will Germany bail them out? How much shifting of debt and dancing around can we actually do before it all falls apart?

Do your best to spread the word -

It's our chance to really re-think and re-tool our socio-economic systems ... dramatically. Let's reclaim our future!

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