Final Word from Monday, June 4, 2012
Analyst Pavel Kohout told Karel Šíp on Fri. that he has a theory
that really big crises generally occur when there's too much
money, not too little. Such as when a government has a lot of
money in the short run and thinks it can overspend, or when
banks lend excessively. Which got us thinking about where all
the borrowed money disappears to. It's easy for officials to
identify who owes the money that has been borrowed by Czech
households, which amounts to about Kč 1.1 trillion. It's also easy
to identify which Czech companies owe the Kč 950bn in
corporate debt. But what about the national debt of Kč 1.5tr?
Who "owes" this? Well, all Czechs, of course. It has gone into
roads, schools, etc., and into the pockets of employees,
pensioners and the poor. But a disproportionate amount has also
gone into the pockets of the owners of all those companies that
won overpriced government contracts. Their fortunes are built to
a large degree not on the wealth of the nation, but on the debt of
the nation, and most of them don't even realize it.[Czech Republic Adam Smith company consumer]
Glossary of difficult words
the debt of nations - as opposed to "The Wealth of Nations" by Adam Smith;
Karel Šíp - see the 6:00 minute mark of the link.