The rise of social media has meant that even somewhat esoteric jokes about
financial events get passed around. During the global financial crisis, someone
sent me this one: 1st guy: 'The financial crisis is making me really
pessimistic. I'm starting to buy gold'. Second guy: 'That makes you an optimist.
I'm buying rice.' Obviously, the Greece crisis has led to a flood of jokes.
There's the one about the difference between 'Going Dutch' to share a restaurant
bill and 'Going Greek' to not pay the bill at all. And there are any number
about the Greek government eagerly awaiting replies to the Nigerian emails that
they have responded to.
|
These Greek jokes are funny because they transfer the problems being faced by
a country's economy to those of an individual or a business. However, in much
the same way, Greece's problems are also a lesson in personal or corporate
finance. At its simplest, Greece is an example of living beyond one's means, of
spending like a much richer person than you are. In Greece's case, much of that
amounted to the usual socialist folly of a bloated, overpaid and underperforming
state sector.
However, what makes it relevant to individuals and businesses is the enormous
role played by lenders who lent to Greece while winking at the Greek
government's fudging of revenue and deficit figures. In India, we find no
shortage of people and companies who have borrowed far beyond their means,
simply because they could do so. Making big plans and spending money feels good
and in all that excitement, it's easy to forget all the repayment and whether
the borrowing is adding any real value to your future.
Borrowing for consumption is seen as completely normal--even desirable
behaviour today. And yet, almost by definition, it implies zero savings, and
nothing damages people's future more than that.
No comments:
Post a Comment