It has gone from 25Bn in 1971 to 230+Bn today which is 34 years later. Simple math yields a compounded annual growth rate of 5%+ which makes sense when you build in inflation (especially that which was present in the 70s-90s)
So basically the article negates the impact of inflation which reduces the debt burden significantly over the long-term even at 1-2%.
Plus the financing is currently done through the ECB which means Greece is effectively paying interest rates far below the yields on Greek government bonds!
Latest Comments
The Simple Math Behind Greece’s Complicated Situation
This clearly does not pass the smell test. If it smells like xxxx then it is.
Greece's GDP chart is here:http://www.tradingeconomics.com/greece/gdp
It has gone from 25Bn in 1971 to 230+Bn today which is 34 years later. Simple math yields a compounded annual growth rate of 5%+ which makes sense when you build in inflation (especially that which was present in the 70s-90s)
So basically the article negates the impact of inflation which reduces the debt burden significantly over the long-term even at 1-2%.
Plus the financing is currently done through the ECB which means Greece is effectively paying interest rates far below the yields on Greek government bonds!
The idea is right but the execution is flawed!
Please feel free to correct me if I am wrong