Dear Rev Al:

I will agree to two points here in this debate:

1.  You are correct, the best measure of the sustainability of a debt position is the debt to GDP ratio and Guyana is at 64%;

1. There have been increases in the GDP of Guyana under the PPP – 5% per annum since 2007.

But what I would humbly like to advice is that Guyana cannot be compared with economies of a different size e.g., UK, Japan and all these mega economies. 

Firstly these economies are too big to fail, the world cannot afford that and the OECD countries will never allow one of its members to fail.

Secondly these mega economies are constructed very differently from Guyana’s economies and thus are driven by different drivers – e.g. in the case of Japan – high technology such as robotics engineering, bio-technology, nano-technology, nuclear technology, medical research, aviation technology, defence technology and high level of educational research are all economic drivers and big sources of employment in those countries.  Guyana has none of those economic drivers; we are a plain vanilla – subsistence agriculture, raw mining and some trading.

To really understand the state of Guyana’s debt situation, we must compare oranges with oranges. 

The table below shows countries with similar sized economy and mostly similar economic activities as Guyana – agriculture, mining and some trading. 

But look carefully at the data; most of these countries have a debt to GDP below 50%, which mean they are managing their debt situation.  Guyana on the other hand is sliding in the wrong direction on the Debt to GDP ratio.  After HIPIC, we were at 60% debt to GDP; today we are at 64% in just 5 short years we have slipped 4% in the wrong direction.

Those who have the same problem are all troubled economies - Nicaragua, Guinea, Eretria, Guyana and Sierra Leone. 

Source:   IMF

Even Haiti with their HIPIC Debt write offs, managed to improve their debt profile.

So as the economy grows by 5% per year but the debt grows at a much faster rate.  In one year since 2007, it grew at 10%.  So it is obvious Guyana will once again head to a position of unsustainable debt because of a reckless regime that clearly is more interested in borrowing for senseless project like the US$150 million airport project.

At the end of the day it is a philosophical issue – the PPP is all for BIG GOVERNMENT, MORE BORROWING and THEY ARE CLEARLY NOT INTERESTED IN MAKING THE PRIVATE SECTOR THE ENGINE OF ECONOMIC AND JOBS GROWTH.

Sase

The only good debt is zero debt.  Look at American Express zero debt and Mastercard zero debt.  If these two companies that are lending money believed in such a thing as good debt then they would have had debt.  Its common sense.

TK/redux:

The Rev answered your question  44 minutes ago!

Now folks compare TK/redux's answer to the Rev above---the question was "Why is Japan's debt to gdp ratio sustainable and Greece's is not" to the Rev's answer below---redux's rambling answer is typical of a 3rd rate intellect and a 3rd rate economist.

================

44 minutes ago

 

Dhanya Bhat Sir Sase!

Me just show this to me FADA and he said, them PPP boys did not learn this at Patrice Lumumba.  They learn what Stalin wanted them to learn - tax, spend and tief.

rev, being distracted by Nehru, i missed your response

you were able to google up an answer to that simple question in under 10 minutes . . . i expected no less

now that that is out of the way . . . i look forward to less nonsense about Guyana and its debt from U

memo: the intent of my question was to contextualize your NUMBERS and expose the shallowness of your discourse . . . done, no?

oh, and by the way . . . u seek to compare my 'hand holding' answer 'unfavorably' to your c&p response as a measure of your smarts . . . really?

how pathetic . . .  stop embarrassing yourself bai

There are fundamental differences between today's debt and the debt inherited from the PNC/AFC in 1992. The first is that it is lower, and even much lower when inflation is applied. The second is that the nation has plenty of development to show for the debt. 

Even today the great USA is awash in national debt, but I don't hear you fools complaining about than. 

Uncle Bgurd:

It will pay if you read the wisdom from Uncle Sase above.

I cut and paste, not me words since me nah know too much of them finance thing but this mek much sense to me what Sase said and I quote:

"Firstly these economies are too big to fail, the world cannot afford that and the OECD countries will never allow one of its members to fail.

Secondly these mega economies are constructed very differently from Guyana’s economies and thus are driven by different drivers – e.g. in the case of Japan – high technology such as robotics engineering, bio-technology, nano-technology, nuclear technology, medical research, aviation technology, defence technology and high level of educational research are all economic drivers and big sources of employment in those countries.  Guyana has none of those economic drivers; we are a plain vanilla – subsistence agriculture, raw mining and some trading.

To really understand the state of Guyana’s debt situation, we must compare oranges with oranges."

So my lil common sense will say that USA is a grapefruit and Guyana is a lime"  Cannot compare!

NEXT!

So you into convenient guessing games.  Bai, you clueless and you talking fart.

rev: "Now folks compare TK/redux's answer to the Rev . . ."

________________________________________

ahem, this is where rev plagiarized the guts of his "answer" to my very very simple question:

http://blogs.reuters.com/macro...ment-room-to-borrow/

har de har har har har!

Much of the debt written off were non-performing.  The nation had nothing to show, thus the write off.  Had the debt been supported by performing underlying assets, it would not have been forgiven.

Baseman you learn finance on sunday night or what?

The PNC debt was mainly interest because that big jackass BURNHAM refused to pay the debt resulting in interest being accumulated.

The real priniciple from the PNC was more like US$900 million and over $1.2 billion was interest because Burnham was a reckless jackass who did not understand numbers and how to deal with BANKERS.

He was a good wanker!

Hoyte on the other hand understood what he had to do, but the boat had already gone to the fall.  Thank the lord for America, it save Guyana AND 34 OTHER POOR COUNTRIES with its leadership at the G-8 and pushed for the HIPIC.

GOOD BLESS AMERICA.

rev, i'm calling u out

you're a plagiarist in addition being a poser, moron and preening antiman

http://blogs.reuters.com/macro...ment-room-to-borrow/

Sase:

Unlike braggadocio Tarron Khemraj aka TK aka redux who comes on this forum full of conceitedness, pretension and exaggerated self opinion, and of course everyone here knows TK is just a UG graduate with a 3rd rate/3 cents economic Phd, you Sase are a modest man and you have presented a reasonable and intelligent post above, and so the Rev will respond to you.

RE: GUYANA VS US VS UK VS JAPAN VS SPAIN--their debt to gdp ratios

You are right! Guyana cannot be compared to those economies---and you are right again--countries with central banks cannot fail---actually the central banks around the world are now ruling the financial world---near zero interest rates and QE-forever!

The point I was making was there is a relationship between credit and real growth---more credit accelerates growth---but there comes a point where new credit is providing diminishing returns. 

Take the US, for example.

* In 1980 it took $4 in new credit to generate $1 of GDP

* Since 2006 it takes $20 to produce the same result.

My conclusion was when new credit results in diminishing growth, then countries have to reduce debt and cut spending---and I made the point that Guyana is still at a point in its economic development where new credit(public and private) will drive growth---you correctly pointed to Guyana's positive growth rates since 2007.

RE: THE TROUBLED COUNTRIES AND THEIR LOW DEBT TO GDP RATIOS--below 50%

 The reason countries like Haiti, Rwanda, Moldova, Niger, Burundi, etc, etc have low debt to GDP ratios is that many those countries after having their public debt written off or written down significantly years ago---many of those countries have not attracted capital to drive growth and development.

Like I said, to increase economic activity a country's debt must grow.

It is when a country's debt reaches a point where debt can no longer be increased---this point is known as the Minsky moment---this is where there is no net benefit from extra debt---this is the moment when trouble arises.

Guyana needs more credit and new debt in order to grow and create new jobs.

RE: THE PPP NOT INTERESTED IN THE PRIVATE SECTOR BEING THE ENGINE OF GROWTH

That is hogwash Sase!

* Amaila hydro will be private sector led.

* The 2 major gold mines that will come on line on the next 5 years---private sector led

* The oil research being done in Guyana---private sector led

I can go on and on!

Anyway sase--good post above---but you and the AFC will continue to live in loserville---Ramo and the PPP are moving Guyana forward.

Rev

Doesn't matter, the fact remains, the much of the debt was not backed by performing underlying assets.  Burnham defaulted cuz the PNC messed up the investments and could not service the debt.  Now, you guys are asking for the same incompetent PNC to b given a change at the cookie jar.  No way, never again....apart from the re-enslavement of the majority.

rev, there is no place to hide

you're a plagiarist in addition being a poser, moron and preening antiman

http://blogs.reuters.com/macro...ment-room-to-borrow/

It matters because the $900 million Burnham borrowed, we do have assets to show for it - Linden Highway, refurbishment of bauxite, demerara harbor bridge, canje bridge, re-surface of temehri airport, corentyne highway, highways from Parika to crabwood creek and so many more.

Unlike Bharat, he borrowed $1.1 billion between 2007 and 2012 and half of it got leaked.

show me what we got for $1.1 billion US dollars?

Now leak is the decent word for tief!

HA HA HA HA HA HA

You are a desperate and defeated man TK/redux---the Rev has exposed you as a duncy--you have been clobbered and pulverised---DUNCY TK.

You TK pompously posed this question to the Rev:

"Why is Japan's debt to GDP ratio 'sustainable' and Greece's is not?"

Well TK, your answer was rambling, disjointed, and convoluted---the Rev's answer, on the other hand, was simple and straightforward.

Because you have been embarrassed, you DUNCY TK come here bawling and screaming that the Rev plagiarized.hahahahahaha

Imagine this folks---the Rev is a business man---DUNCY TK is an economics Phd---and yet DUNCY TK could not give a simple and straightforward answer as to why Japan's debt to gdp is sustaianable and Greece is not.

TK IS A MENTAL LIGHTWEIGHT FOLKS!

Now he is using his crass and boorish handle redux to bawl and scream that the Rev plagiarized.hahahahahahahahaha

Rev

u serious bai . . . u REALLY want me to detail this and embarrass U!?

That all together was less than 100 mil.  Now, how come the entire economy collapsed under the PNC and under the weight of the accumulated debt.  The PNC was an unmitigated disaster.  Now I know you privileged PNC stalwarts and descendants like Redux will see it differently.  You were well mitigated.

ah really deh pun yuh mind eh bai

heh heh heh

========

DUNCY TK/redux--his answer to a simple economics

question which he pompously posed was rambling disjoined,

and convoluted. He is vexed folks because the Rev's answer

was simple and straightforward--now he is bawling plagiarism.hahaha

You are a desperate and defeated man TK/redux---the Rev has exposed you as a duncy--you have been clobbered and pulverised---DUNCY TK.

Because you have been embarrassed, you DUNCY TK come here bawling and screaming that the Rev plagiarized.hahahahahaha

Rev

ahmmm, ok . . . here's rev, the fraud, lifting directly from Pedro DaCosta so that he sounds 'authoritative':

______________________________________

rev:

"like the US, Japan controls its own currency---it has its own central bank-that means no matter how high Japan's debt to GDP is---a debt default is impossible.

Greece doesn't have a central bank---their debt and interest burdens are therefore a problem.

Another thing regarding Japan, even thought it's debt to GDP is 235%---about half of it is owed to the central bank--what that means is that the interest on that debt owed to the central bank goes back to the treasury.

In the United States---our treasury now receives 80 billion annually from debt held by the Fed."

vs.

Pedro DaCosta, Reuters December 5, 2012

Is the U.S.on the road to Greece, as some politicians have proclaimed?

Most economists say the comparison is nonsense. At a towering $15 trillion, the U.S. economy is not only the world’s largest, it is also more than 50 times the size of Greece’s. This gap makes any type of comparison difficult – it would be like analyzing trends in Maryland in relation to the entire euro zone.

Another key difference: Unlike Greece, the U.S. actually controls its own currency. That means a debt default is effectively impossible. This reality, coupled with strong monetary stimulus from the Federal Reserve, helps explain why U.S. bond yields remain near historic lows despite larger deficits.

Mark Weisbrot, co-director of the progressive Center for Economic and Policy Research in Washington, says a country’s interest burden is far more important than its total debt levels in determining the government’s ability to service it. He argued in a recent editorial:

Contrary to popular nonsense about America ‘ending up like Greece,’ the U.S. doesn’t even have a public debt problem. Net interest on the federal debt is currently less than 1 percent of our national income, the lowest it has been in more than 60 years. And it’s the interest burden that matters, not the big numbers like $16 trillion that are thrown around in scare stories.

Why is that? Weisbrot explained further in response to an email:

Imagine you had a credit card debt of $40,000 but the interest rate was just 0.1 percent – you wouldn’t have much of a problem. It’s the same thing for a government – 1 percent of GDP is not a lot of money to come up with. Greece hit 6.8 percent last year, that’s why they are in trouble. (Also, because they have a “foreign” currency that they can’t create). In fact, none of the other countries would even have run into problems if their interest rates hadn’t shot up.

Note that I used net interest payments for the U.S. – that’s because the government also receives interest. The gross interest is still pretty small though, about 1.4 percent of GDP. But it’s net interest that matters: that’s why Japan has no problem even though its gross debt is about 220 percent of GDP. About half is owed to the central bank. What this means is the interest on that debt goes back to the Treasury. Our Treasury now receives about $80 billion annually from debt held by the Fed.

______________________________________

btw, this statement "Greece doesn't have a central bank . . ." by rev is actually false. That's what happens when [as usual] you low IQ posers get a bit too clever trying to camouflage the copy & paste exercise

for the simplest of questions, this moron could not confidently give an answer without stealing from a random www 'authority'

heh heh heh heh

Greece does have an entity called a "Central Bank", but in essence it's does not have a full and true central bank function.  It takes much of it's directive from the ECB in Brussels, the real central back of the Euro Zone.

as part of the eurozone . . . we know that the Greek central bank does not have monetary powers

but what's your point . . .? rev's statement is false

In the context of what he was speaking, i.e. power to print and borrow and re-pay left pocket, right pocket and manage debt, he is correct.  The so-called "central bank" of Greece have no such levers at its disposal.

i disagree. Rev got lost trying to build camouflage . . . here is his context:

"Greece doesn't have a central bank---their debt and interest burdens are therefore a problem"

this is not just a monetary matter

You are going nominal...what's the definition and traditional function of a "Central Bank"?  He is correct, they do not have Central Bank levers to manage their debt burden.  They do NOT have any of the levers the Feds, Japan CB, Swiss CB, Bank of England, etc have.

TK/redux

I see the Rev has you doing some research!

The Rev exposed you as a DUNCY!hahahah

You come on this thread and pompously posed the following question:

Why is Japan's debt to GDP sustainable and Greece's is not ? Tk/redux

Now TX/redux, when you believed the Rev did not respond--you patted yourself on the back and presented your answer----your answer tuned out to be rambling, disjointed and convoluted.

The Rev's answer, on the other hand, was simple and strightforward.

You are a little DUNCY TK/redux--and because your answer was exposed as being rambling and convoluted---you are now coming here and bawling that the Rev plagiarized his answer.hahahahaha

Listen! The Rev did not pull those numbers(like half of Japan's debt owed to the central bank or the US treasury receiving 80 billion annually from the Fed) out of a hat---they had to come from somewhere.

You are just vexed TK--that the Rev exposed you as a BIG DUNCY.

Anyway DUNCY TK/REDUX HOPE YOU LEARN TO PRESENT SIMPLE AND STRAIGHTFORWARD ANSWERS IN THE FUTURE---YOU OUGHT TO BE ASHAMED OF THAT CONVOLUTED ANSWER YOU GAVE--YOU LITTLE DUNCY.hahahahahahaha

Rev

Please baseman, why do you have to open your teeth and expose your intellectual bankruptcy every time.

Oh gosh man, at least try nuh to show some basic common sense sometimes.

We know you got the PPP fever of rearranging facts to fit your circumstances.

We hope you the best of heath soon!

repeating the same things we agree upon [with emphasis] does not address my issue

the Greeks have the same "levers" of other euro member states not ceded to the ECB to manage their economy . . . just as the powers of the Central Banks of Spain, France, Italy, the Bundesbank, etc did not vanish upon joining the eurozone

Greece is NOT Panama

the plagiarist's limp 'defense' . . .

"numbers" are not the problem fool . . . nice try

DUNCY TK/redux:

Try not to give rambling, disjointed, convoluted answers to simple questions in the future. You are deeply ashamed and embarrassed the Rev exposed you as a DUNCY.

By the way TK--keep researching--you're good at it---and one more thing---the Rev is a businessman--never took an econ course in his life---learned by reading---and the Rev doesn't have to cite his sources---he is no academic---you, on the other hand, are a 3rd rate/3cents economist---you have to cite sources--although most of you in the academic world plagiarize.hahahahahaha

Rev

soo . . . this is limb #2 jumpin on, eh?

keep dancin u fraud . . . while you're @ it, ask one of your intellectually challenged asssociates to look up "plagiarism" and report back to me

har de har har har

Originally Posted by redux:

HA HA HA HA

TK/redux--why are you vex--the Rev exposed you as aDUNCY--so you ran and did some research to find out where the Rev got his data from--well, the Rev did not pull his information out of a hat---he pulled it from somewhere--and presented a simple and strightforward answer to your question.

You on the other hand presented a rambling, disjointed, convoluted answer---you are a big DUNCY.hahahaha

Hey TK/redux--you should learn how to pull a Rev---you'll be able to present simple, straightforward answers like the Rev.hahahahaha

One more thing TK--you spent donkey years getting a 3rd rate Phd---and the Rev can pop on the internet for a few minutes and give better answers than you on a simple econ question.hahahahahaha

Rev

hmmm . . . you've committed to a 2 front kamikaze defense of credibility u never had

kinda sad when u overreach and pretend to be what you're not . . . and get exposed in the most embarrassing way

couldn't have happened to a more deserving cockroach

Rev was talking about Japan and the Fed, not Spain, Italy or France.  Why you scurrying around like a headless old fowl?

Katahar, do you have any idea of the subject matter...or is it all Greek to you?

rev is doing quite a good job cutting his own throat with a dull knife

i don't think he needs any more help from u