Belgium is next ... Standard & Poor's downgrades credit rating

[golfguru]

Belgium's credit rating has been cut by Standard & Poor's, on concerns that funding pressures could mean the country will have to take on more debt from its banks.

http://www.telegraph.co.uk/finance/financialcrisis/8916930/Standard-and-Poors-downgrades-Belgiums-credit-rating.html

Are the marvelous social programs in Europe proving to be too expensive?

Portugal, Ireland, Italy, Greece, Spain (PIIGS)
all have one common problem, the government is spending money they do not have. The deficits are supported by borrowing.

Will United States learn from it, or keep doing the same thing expecting a different result? Only time will tell.

Hungary is another country on the ropes, Moody's has cut Hungary's government bond rating to "junk", citing high debt levels, weak growth prospects and uncertainty about its ability to meet fiscal goals, in what the government called part of "financial attacks" against the country.

[Ian David]

1. The Smurfs will save them. n/t

[tabatha]

2. Greece is a crime scene.

I'll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And––cover the children's ears when I say this––a bank named Goldman Sachs is holding the smoking gun.

In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece. Goldman took a huge loss on the trade. Is Goldman that stupid?

Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why? Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman's fake loss was the Greek government's fake gain.

Goldman would get repayment of its “loss” from the government at loan-shark rates. The point is, through this crazy and costly legerdemain, Greece's right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.

http://www.gregpalast.com/lazy-ouzo-swilling-olive-pit-spitting-greeksor-how-goldman-sacked-greece/

"Are the marvelous social programs in Europe proving to be too expensive?" Has nothing to do with that - rather with the previous right-wing free-market government, just as happened in Iceland.

[golfguru]

5. You are overlooking why Greece went to Goldman Sachs in the 1st place

Why did they get on their hands and knees and beg for help from GS? Because they needed the money. They needed money because they spent too much. There is no way getting around that no matter how you try to spin it on GS. I know GS are a crooked outfit. So why get in a situation when you beg them for help?

I do not think it was because the Greeks are so stupid they did not realize GS were screwing them. They just had few other options.

[DJ13]

8. They needed money because they spent too much.

Or.... they taxed the top incomes too little.

The 'spent too much' excuse is usually a right wing meme when it fails to consider the tax side of the equation.

[tabatha]

9. It was the right-wingers that spent too much.

[golfguru]

11. It matters little who spent too much

What matters is that they spent more than they could afford. They must not have a balanced budget law.

[tabatha]

13. The right-wingers in Greece HID the financials.

"When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman's bats flew out. Investors' went berserk, demanding monster interest rates to lend more money to roll over this debt."

[golfguru]

16. Repeating the question...why did Greeks go in debt

they could not afford? How long were the right wingers in charge? How long has the debt been building up? You seem to be knowledgeable on Greece. Will you please spill some facts for us?

This Papandreou name I have heard for a very long time. Is he left wing or right wing?

[tabatha]

17. I said in a comment below that the answer is probably in Palast's book.

However, wiki is available to anyone who has the energy to type it into a search engine, and it includes the following:

After 15 consecutive years of economic growth, Greece went into recession in 2009.<32> An indication of the trend of over-lending in recent years is the fact that the ratio of loans to savings exceeded 100% during the first half of the year.<33>
By the end of 2009, the Greek economy (based on data revised on 15 November 2010 in part due to reclassification of expenses) faced the highest budget deficit and government debt to GDP ratios in the EU. The 2009 budget deficit stood at 15.4% of GDP. This, and rising debt levels (127% of GDP in 2009) led to rising borrowing costs, resulting in a severe economic crisis.<34> Greece was accused of trying to cover up the extent of its massive budget deficit in the wake of the global financial crisis.<35> This resulted from the massive revision of the 2009 budget deficit forecast by the new Socialist government elected in October 2009, from "6–8%" (estimated by the previous government) to 12.7% (later revised to 15.4%).

The Greek labor force, which totals approximately 5 million, works the second highest number of hours per year on average among OECD countries, after South Korea.<36> The Groningen Growth & Development Centre has published a poll revealing that between 1995 and 2005, Greece was the country whose workers worked the most hours/year among European nations; Greeks worked an average of 1,900 hours per year, followed by Spaniards (average of 1,800 hours/year).<37>

[tabatha]

18. Btw, google Papandreou

to answer your questions. The information super highway can do that for you.

[golfguru]

10. I don't think any one in Western Europe is under taxed.

I have not done a in depth analysis, but I am familiar with some rich sport figures, who emigrated out of Western Europe to lower taxed countries.

[tabatha]

12. It was a right-wing government that got Greece into trouble.

Just like the US.

Bush took over when the US had such a surplus, that he decided to give tax breaks to the wealthy, and then spent like a drunken sailor (more than the Dems) all the way to 2008, when everything crashed.

I don't know the details about Greece; it is in Palast's book.

But I can guess that they cut revenue by cutting taxes.

[bluestateguy]

3. Who do these people think they are?

Just arbitrarily declaring ratings.

[golfguru]

7. They are the people bond buyers depend on n/m

[DJ13]

4. ....

[golfguru]

6. I love it! n/m

[tabatha]

14. The financials in the world have gone nuts

since people started trying out free-market crap with no regulations.

See Iceland.

[frazzled]

15. And they don't even have a government

There's nobody running the place, and no one, I guess, to blame. Sacre bleu! / And however you say Sacre bleu in Flemish.

So now it's Belgium. It must be Tuesday.