We're not the only nation facing rough economy
We’ve all done it at one point or another. There’s something you really want to buy, and the price looks too good to pass up at the time, so you quickly check your balance in your bank account to make sure you have the funds to afford it before pulling the metaphorical trigger.
It’s almost like a game show. You await to find out what waits for you behind door number two, with hopes of a tropical vacation or new Mercedes in the wings, but all too often come face-to-face with a year’s supply of chicken beaks. As you stare at that meager balance, a wave of emotions envelops your entire body. You might feel regret over some of your recent purchases, or shame that you allowed things to get so risky.
Or panic. There’s always panic.
Imagine, if you will, the proud nation of Zimbabwe. Located in southern Africa, the former British-controlled nation sports a population of more than 12 million people and one of the world’s largest platinum reserves.
However, a horrible decade of inflation — which hit 500 billion percent in 2008 — led to the nation printing 100 trillion-dollar bills in Zimbabwean currency before switching to the American dollar in 2009. The hope was that the switch would help stabilize the economy, but the debt accrued during that previous decade, and civil servants’ wages accounting for 73 percent of the national budget, has created a slight cash flow problem.
To be precise, according to NBC News, Zimbabwe had $217 in the bank on Tuesday.
I know what you’re thinking. That dim-witted editor made a typo. He meant to say “$217 billion,” or “$217 trillion.” And, yeah, that would make more sense. But, no, that number was provided by Finance Minister Tendai Biti.
So, basically, Zimbabwe couldn’t buy a 37-inch television. Or a solid vaccuum cleaner. Or 218 lottery tickets. Or, more importantly, finance elections that are expected this spring after a March referendum on a new constitution.
“The government finances are in a paralysis state at the moment,” said Biti, who added that the country might have to seek donations to stay afloat.
Yup. A few 50-50 raffles at local restaurants should do the trick, or maybe a car wash or Chinese auction. Perhaps they could hold a telethon, and get Eddie Money to perform, since he apparently has nothing better to do these days that humiliate himself in television commercials.
And we all thought our economy was in shambles.
To be fair, it is not only Zimbabwe facing tough economic times. Moody’s recently downgraded Spain’s credit rating from A3 to Baa3, which is considered one level above junk status among international countries. It might also prevent them from buying a used car or renting furniture, and could potentially keep them from joining a record club.
Who remembers those? You’d get about 35 albums for a penny when you first sent in your little form, and then if you didn’t stay on top of things, you started getting an album every month until you got a bill that was about the size of the Bill of Rights coming to your door and your father yells at you so much you think your eyes are going to start bleeding and ...
But I digress.
Spain also announced an unemployment level of 24.6 percent in May 2012, meaning consumer spending is not exactly something to count on to help them pull out of the dark time. So, with little confidence in obtaining loans with their credit rating, and little opportunity to collect tax on items bought domestically, where do they turn? Zimbabwe? Maybe Italy?
Well, no. Not Italy. Apparently, as reported by Lewis Humphries, Italy’s total debt as a percentage of its gross domestic product (GDP) is at a staggering rate of 314 percent, with a state financial liability that is 111 percent of its GDP. That means, well, Italy is pretty much broke, too.
What makes Italy unique is that their household debt remains low, meaning that the people of Italy are in much better financial shape than the nation, itself. Of course, if the nation continues to falter on the fiscal side, there will be an inevitable loss of government jobs, as well as the potential for other cost-saving moves, like turning off the nation’s lights at night.
Which brings us to France, which will be doing just that. Starting July 1, all non-residential buildings will have to switch off interior lights one hour after the last worker leaves the premises, according to a Reuters story, and all exterior and shop window lighting will have to be turned off by 1 a.m., but not for financial reasons.
French officials say this move is intended to save energy and reduce light pollution, but it did help with the flow of my story, right?