European Debt Crisis: The Personal Finance Analogy

I finally heard something very simple this morning that made the debt crisis make more sense to me. It allows me to make analogies to personal finance, and then see why those analogies fall apart. So I thought I'd spell all that out, but first the easy explanation:

Many of the smaller European economies are paying more in interest on their debt than their economy is growing. So for a hypothetical Euro country in trouble, interest on debt is 3% and growth is 2.5%.

This isn't such a bad thing if your debt is, say, 20% of your annual income. It sucks, but you pay it down more quickly than you might otherwise. But Greece's debt in 2009 was 167.2% of GDP. This is like having $167,000 of debt and having an income of $100,000/year. Which isn't that odd... if you've got a mortgage and it's smaller than your annual income, that's amazing. Germany, which is recognized as the financial rock on which the Euro rests, has a debt equal to 176.8% of their GDP.

Ireland tops the world at their debt being 1305% of their GDP. Yes, that's having $1.3 million in debt while making $100,000/year.

(If you're curious for the general rundown, these stats were obtained from a slideshow on CNBC.)

But again, the real problem is the disparity between the interest rate on the debt and economic growth. So long as growth exceeds debt interest, you're going to gain ground--in the case of Ireland you'd be doing that for several generations, but eventually you'd pay it off. But if your growth is lower than your debt interest and you can't pay off the principle in a timely way... well, I believe the technical term for that is "circling the drain." This is why a bailout is only a short-term fix--if you don't get their economies growing at a rate higher than their debt interest, or pay off the debt principle in a meaningful way, it's just a short-term fix.

So that explanation made a ton of sense to me. As to how to fix it, that's where I have to turn to personal finance solutions, and then look into why those don't work for countries. And then... um... anyone want to float a solution out? That's a lot of Europeans who would owe you one. I'm pretty sure you'd get a wine and cheese basket out of it. Just think about it.

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Irony

If only I was independently wealthy, I'd turn some of my ideas into great money-making opportunities. But of course without that safety net the risk is just too great. Especially as some of my ideas are pretty much crap, but I don't know that until I reflect on them years later.

But you know what's fun about ideas? Idly thinking about them, with no possibility for failure since you're not going to do anything. And here's one I think might be fun to brainstorm. You'll know from the description if you're interested in brainstorming with me--and if someone feels like taking the idea and making a corporate empire out of it, you know you'll get no competition from me. But feel free to hire me as a consultant or something after you've made your millions.

Here's the idea: Take older hardware and use it to create in-home personal networks. Or, to make it all buzzwordy:

A mini cloud inside your house.


But why? It seems obviously useful. It also seems obviously useless. So, details on my thoughts so far behind the cut.

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it's his fault again

I keep writing long responses to walrusjester. As if I'm not wordy enough without prodding, though I guess recently I haven't been.

He posits the idea that he believes fervently in the Flying Spaghetti Monster. Not an ironic belief with a t-shirt and bumper sticker, but a real belief where he raises his kids to believe it, wants it taught in schools, and is passing out literature. What is the nature of tolerance with regards to this belief which is obviously ridiculous?

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Linux question

There's some smart Linux folks on here who can satisfy my curiosity. I have two SSH sessions open to the same server (CentOS FWIW), as the same user. But "ps" only shows me processes for that session--the processes started by the same user in a different session are hidden by default.

This seemed unintuitive to me. I assume if I threw some flags and maybe a sudo at it then it could show me all the processes, and probably I could filter the result by user... knowing Linux, making it do what I want is simply a matter of nuzzling the man pages for a while. (Yeah, I said that.)

But I specifically opened up SSH session number 2 as a way to monitor what was going on in session 1 while it did it's mojo. So here's my question:

Why is this behavior (showing by default only the processes started by that particular session rather than by that particular user in any session) a feature and not a bug? Or am I just doing things entirely wrong?

Update: Yeh, ps -U [username] is what I was looking for. I'm always reluctant to go nuzzling the man pages, but I always walk away satisfied if I do. Gotta remember that. The central question remains, however, why would that be the default when most Linux users I know have multiple sessions going all the time?

For walrusjester

Did you know I wrote my master's thesis on RPGs?

Now you do.

Frankly, I think back on some of my logic back... oh dear god... 10 years ago and I think I was a bit naive in some areas. However, I came to a different conclusion than walrusjester did. He says that RPGs are best suited as simulations, but I argue that RPGs are particularly well-suited to collaborative narrative.

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As a final note, you can see that I have to agree with WJ on one point: classes really do suck.