Borrowed money. Now

The story as I remember it goes like this. Sometime in the early 1920s Britain and France asked for relief from some of their war debt to the USA. An American senator, speaking, I like to think, in the accent of Humphrey Bogart or John Wayne, said “they hired the money, didn’t they?” Quite so; end of story.

Well, successive Greek governments over many years have hired an awful lot of money, and, if the latest bail-out deal is approved and goes through, are about to hire a lot more. Not surprisingly, the lenders want some assurance that this time the Greek government is serious about cutting public spending and raising public revenue.

When a Government spends more than it collects in taxes, it has a choice. It can practise austerity or go for growth. Some of those who now criticise the insistence of the EU – or rather the eurozone states – that Greece must endure another round of austerity if it is to receive yet another bail-out loan, are among those who approve of George Osborne’s austerity policies here. Among those indeed are some who insist that in order to cut the deficit and prevent the national debt from continuing to rise.

Be that as it may, the truth is that the creditor almost always has an advantage over the debtor, especially when the debtor is asking for new loans to keep afloat. When the Labour government had to turn for support from the IMF in 1976, the Chancellor of the Exchequer, Denis Healey, was obliged to make deep cuts in public spending. Going for growth in the hope that a booming economy may make it easier to cut the Government’s deficit may make sense, but this is not how the creditor sees it.

Sadly, it’s reasonable for Greece’s creditors to suspect that the Greek Government will promise anything to get the loan it urgently needs – and then forget its promises unless they can in some way be made binding.

Interesting facts

• Slacker Dino Rado, and his uptight partner, Steven Scheere made a bad investment. They borrowed money to fund a "B" movie that flopped big time and now the Jamaican Mob wants its money back. As a last resort they steal and idea from a screenplay to cast unsuspecting actors to pull off a real heist. Their plan is flawless, until they put it into...
• Jim Forbes returns from serving three years in prison for ""swindling"" the folks of Dodge. He had ran out of money mining for gold, salted the mine (planted high grade quartz ore in it), and borrowed funds from the townspeople to continue mining. Now, backed by money provided by his sister, he's reopened the mine in order to prove to...