Prior to coming down with no one knows what, I finally saw the (in)famous public debt meter installed in the very hub of Warsaw. I took the photo to the right on 13 October, so the outstanding debt of the Polish state has risen within ten days by probably some few hundred million PLN. “It’s not the matter how much you owe, the point is how much you earn”, some economist argue. Indeed if you earn one million PLN a year and have to repay a loan of 100,000 PLN you are better off than an unemployed couple with five children who can’t make ends meet and have 1,000 PLN to repay. When it comes to a state an indicator of relative indebtness is debt-to-GDP ratio. In Poland it runs at around 54%. Is it a lot? Japan’s debt has almost reached 200% of its GDP, the country’s economy is stagnating, but nothing heralds an imminent collapse of Japanese public finances. Greek debt-to-GDP ration exceeds 110% and in May 2010 Greece faced serious problems rolling over it. At the same time the same ratio in Italy was five percentage points higher, but financial markets perceived default of Greece as much more probable than Italy’s. In United States public debt accounts for around 80% of its gross domestic product and US bonds are still rated AAA. German public debt has reached record-high levels, but yields on German bonds are the lowest in the history (what makes borrowing very cheap for German taxpayers). Is there any logic in it?So is 54% a lot? Much depends not only on how much revenues the state collects, but also on how much it spends structure the spending. In Poland rigid government expenses determine the growth of public debt.
Is 54% a reason to worry? Thousands of people pass the display with the meter by every day and they don’t care. Who’s going to pay it off? They? Their children? The state? If the state then who? Who is the state? The prime minister Tusk? The finance minister Rostowski? Do they realise majority of them are Polish state’s creditors? Most of them obligatorily put aside money in pension funds, which are obliged to hold at least 60% of their portfolio in Polish gilts. Some of them put their savings into bond funds (which hold mostly government bonds), some buy government bonds directly. Have they ever thought Polish state could one day go default? Do they realise interest they earn is nothing else but taxes paid by their relatives, friends, neighbours and by… themselves?
Does the government care about the meter? They say in comparison to other, wealthier states, our relative indebtness is negligible and there is no reason to worry. If the European Commission gives consent for not counting government bonds bought by pension funds into public debt, our debt-to-GDP ratio will plunge by around ten percentage points. I dread to see the complacency of minister Rostowski’s face when this creative-accounting decision is passed.
Does the opposition care about the meter? No, they have other stuff to gripe about. Besides, the thoughtless economic policy PiS-led government pursued when they were in power only exacerbated out debt problem. When the economy was thriving, instead of amassing a budget surplus, not only did they fail to reduce the public debt, but they cut revenues and raised spending. Thanks to that pro-cyclical move we are where we are and we wasted the chance to carry through some unpopular reforms when their negative effects could have been mitigated. Minister Rostowski was right to say someone from PiS should apologise to Poles for what their misconduct.
And ordinary people don’t care even if they see the “debt per capita”. Every Pole, including infants, disabled, pupils, senile old men owes 19,267 PLN. Whom do they owe? Partly themselves (individual bondholders), partly banks and investment funds from Poland and abroad. What if there was an initiative to crack down on the problem, chip in and pay it all off? I would join it. I would fork out 19,267 PLN of my savings if it could only help solve the problem. But let’s face it, the idea is completely unfeasible. Many Poles don’t even have so much money put aside, the stats include millions of people who don’t earn any money because they can’t. Most people wouldn’t agree to chip in and pay off our debts. Debts can’t be paid right away because bond holders wouldn’t agree to be paid off before bonds mature. Money would have to be collected and invested somehow, the whole process of paying off would last decades. And finally this one-off move wouldn’t solve structural problems, the debt spiral would just start over, after a few years with no incentives to cut spending the problem would relapse.I wonder how financial markets would react to the decision of Polish government not to refinance its debt. In practice it wouldn’t be a decision not to issue new bonds, but the bonds would be issued on terms set by the government. It would be them who would beg us for issuing bonds, not us begging them to finance our debt. Interesting!
This burning issue could be addressed by some academics from my school, but I don’t believe it will ever happen. Students are believed to be have in innate tendency to bunk off, but from what I’ve noticed that affliction is rubbing off on lecturers. The fact that students are lazy is commonly known, but the fact scholars are lazy and don’t even bother to pretend they aren’t becomes embarrassing. I observe how laziness and ignorance are becoming a virtue. This is how the Polish higher education system is going downhill. Students want to put as little effort as possible and lecturers simply play along with them, because they find it convenient. Soon no classes will be held, students won’t have to attend them, lecturers will be paid anyway, in the exam period easy exams on which everyone cheats will be held. Happy students will get their diplomas, a bunch of wankers will get paid and thus will also be happy, nobody will get tired and that’s the point!
Within last two weeks I found out that:
1. If a lecture starts ten minutes later, it is a sufficient reason to finish it ten minutes earlier and have a fifteen minutes long break. Ninety minutes shrink to sixty five. And everyone is happy.
2. The blue chip index of Paris Stock Exchange is CACK 40. And Mr Lecturer thought it very clever of him to hit students with such an English-language joke.
3. And last but not least during the workshop I found out I even can’t lie so I don’t deserve to be called a student. („pan oszukiwać nie umie, co z pana za student?”)
I’ve felt like a sucker many times in life, given that I’m generally straightforward this feeling will be haunting me, but this time it wasn’t just an insult to me (I couldn’t be even assertive enough to respond to it without striking back), but it bore testimony to what set of values is instilled in students. Appalling. And, to make it worse, no one will stand up to it!
Alright, the school is bringing me down, but I’ve got just three months left there. And what after I graduate? I should look out for a job…
It’s not an easy task, some people have more luck than others. For instance, this year’s graduate, daughter of current finance minister, aged 23, was fixed up with a cushy job in Polish Foreign Ministry. According to the Ministry’s spokesman, previous translators did their job poorly and minister Sikorski was dissatisfied with them (here I do believe it, after seeing korpus dyplomatyczny translated as “diplomatic corpse” and dziękujemy za gościnność as “we thank for your hostility” I know anything’s possible) and decided to fire them and take on his fellow minister’s daughter. Since then, all minister’s speeches and official writings have been edited by Ms Rostowska who ensures they are all written in impeccable English.
Ms Rostowska is not well-known public figure, so journalist paid by hostile media had to go an extra mile to find any photo of her. The only one they procured was her profile picture from facebook (right) which proves her impeccable credentials, high qualifications and fondness for modern art. This photo disappeared from all main news sites after Ms Rostowska filed several request to remove it and now it can be found on some niche sites only. For no apparent reason the news item also has been removed from most main sites, but what has once been put into Internet will remain there forever and info about Ms Rostowska career circulates around the Net.I screwed it all up and can’t boast about no prior experience as Mr Rostowska (if she hadn’t worked during her studies, what they hell do they do in England?), but if it happens that I have to look for a job next year, I’ll have to set a new photo as a profile picture on facebook. In the foreground: me, wielding a bottle of plonk, in the background, a board saying “I feel like shagging a young piece of arse” (mam ochotę przelecieć jakąś młodą dupę). Will it boost my chances on labour market? If a recruiter from the company I worked for this summer had found my blog (I try to keep it rather anonymous, but I didn’t do so at the beginning), would it make a problem to find my profile on facebook?
Yes, I admit, I am nasty and malicious, but that’s the way of coping with absurdities.
Next week I’ll post a book review – will be nicer!
