Crisis in Greece: Would you lend money to a person who can’t pay?

Lots of debate around who is the victim and who is the bad guy in Europe nowadays thanks to the financial crisis gripping Greece and, as a consequence, the rest of the European Union. It seems to point to the underlying fundamental difference between the way creditors and debtors think which is not too different to the difference between the way capitalists and labourers think.

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Hold that thought for a moment while we examine what’s really at work here on the surface. It comes down to the simple question even ordinary people with a bit of cash on hand face every now and then:

Would I lend money to this person?

The key to answering this simple question is in the result of an assessment as to whether or not said person is capable of paying you back.

In short, do you see in that person an inherent ability to honour commitments he enters into?

Obviously, Greece’s creditors saw that in Greeks — twice already as far as risky national bailouts go; and a third time perhaps if things go well in the on-going negotiations this week. See the irony in all this? Considering Greeks today are whining about the powers that be not giving them a break, it seems it is Big Bad Germany that actually finds within itself an ability to feel optimistic about Greece — a lot more than Greeks are willing to grant themselves!

In short, Germany is saying: You can pay us back if you do this and that. But the Greeks tell themselves: We can’t do those things. We are not capable of it!

Sounds familiar? It’s likely because you’ve probably heard a similar conversation between a rehab therapist and her alcoholic patient. Says the rehab therapist to the wino: You’re in this rehab program but the cure to your alcoholism ultimately depends on your ability to commit to certain measures. Alcoholics will always say they’ll comply — after their next drink, that is.

So let’s come back to the earlier train of thought — the idea that creditors and debtors think differently in the same way that sets apart the capitalists from the labourers. The fact is, creditors and capitalists see possibilities in the risks they take. But for the most part, chronic debtors and lifetime labourers are driven primarily by need and can’t see beyond that, much like the avarage wino can’t see a future beyond his next drink.

Is the cure to alcoholism more alcohol? Not a chance. Most addicts who successfully come out of rehab completely free of their demon substances are, in a lot of cases, dirt poor after they’ve lost everything to servicing their addiction. But the key word here is free — which means they are free to start over.

The only way Greece will get out of its predicament is if it is willing to start over. The alternative, of course, is to play ball subject to the rules. It needs to decide which path to take. Suffice to say, the biggest humiliation in being a debtor is to be in constant need of the resources of a person or an entity who you’ve come to regard as your biggest tormentor. As such, the challenge lies in imagining a different path. If you are in the midst of a baseball game and you suddenly want to play football, you need to get out of the field.

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32 Comments on “Crisis in Greece: Would you lend money to a person who can’t pay?”

  1. Would never lend money to anybody from the Philippines as you will never get it back. You will get the whole host of sob storiea like my mother died again, I need to pay for my Caesarian, I need to pay for my ofw medical etc etc. heard it all

    1. totally depends which Filipino individual or entity. You got banks now who do automated credit scoring to do that even in the Philippines.

      It’s not like all Filipinos are in poverty nor cannot pay their debts.

      1. Ah, another classic.

        “Not all Filipinos are like that”.

        No shit, Einstein. Of course they’re not.

        Doesn’t alter the fact that a MAJORITY of Filipinos have no clue how to handle money, don’t want to work for it, live beyond their means, have no plan for improving their situation, and think it’s quite OK to borrow money without paying it back.

        Statistically speaking, about 80% of Filipinos do live in poverty; and most of the time, it’s because of the choices they make and they way they behave, not because they are inherently incapable of escaping poverty.

        1. Nice one!

          I once asked a Filipino guy – younger fellow – who was asking me for a bunch of free things like my shirts, shorts, shoes, etc., why he wanted these things from me. His answer was because I came from the States so I must be rich and have lots of stuff. I asked him if he was poor. He said yes.

          Yes? I asked “Why are you poor?”

          He thought for a moment and shrugged his shoulders and said “I don’t know”

          I asked “You don’t know why you’re poor?”

          “Well,” he said “I live in that barangay and we’re poor there so I’m poor I guess. And I don’t have a lot of stuff.”

          I looked at him and told him “You’re not ashamed asking me for these things? Do you know HOW I got these things you are asking me for?” “I worked for them! Nobody gave them to me!” I went to work, earned money and saved enough to buy these shorts and shoes and shirts! You should do the same thing!”

          I also told him that he doesn’t have to be poor. He looked at me like I had two heads or something. He actually couldn’t understand the comment I just made to him!

          I said “You don’t have to be poor. You can choose to become “not poor!” It’s up to you. If you want to continue living poor and have no shame asking people for stuff you should be able to buy for yourself, then go ahead. But you have a choice, believe it or not!”

          I think he got my message. He walked away quietly and I would see him from time to time around the village I lived in and say hello. Hope he learned a thing or two from our conversation.

        2. @ Not Tony,

          The Filipinne wage is so pathetic that it is a wonder anyone shows up at work. That is one reason why most Filipino’s live in poverty, not because they do not want to work. Working in a mall, for example, at a phone store selling all sorts of phones from APPLE I-Phone 6’s to Samsung Galaxy 6s and on down the list of cell-phones…the average Filipino makes P12,000 (E 260/USD $300) for the whole fuckin MONTH !!!!! A fuckin month!!! not a week, which would be pathetic enough, but an entire month. it is no wonder why Filipino’s are not one’s to pay loans back etc etc…
          The reason for these pathetic wages are due to the fact that these imported phones are TAXED at at least 100% (there is no Free-Trade),if not ,more. The electricity rates in the country are the highest in the world, 40% higher than anywhere in the E.U. or USA and 300% higher than Thailand. So there is literally no room to pay workers a higher wage.The whole ENRON scam has been imported from the USA and implemented in the country and it is not going to end.The Utilities companies claim to not have an adequate electrical grid and are lying through their teeth.The ‘rolling black-outs’ are just a way to hike prices even higher than they are already and yet no improvement materializes. It has been going on for years.The people of the Philippines are therefore enslaved to a government that taxes the shit out of them and then gives them nothing in terms of social services in return. The treasury is considered a personal piggy-bank by the politicians and they watch while their fellow countrymen starve in the streets.

          that does not mean that some people are not lazy, there will always be slackers, but the same work in the West commands 3X’s the salary. it is a disgraceful situation and Filipino’s should all just stay home for two weeks until they are all given 100% pay-raises, they have earned it.

        3. I agree on your part that certain Filipinos have no clue on how to handle. But not one can say that majority is the word because you dont have any scientific nor statistical basis for that.

          I disagree though with your self made or make believe 80% Philippine poverty statistics. There is no scientific basis for it.

        4. DeepThroat: the official statistic is ~30% at or below the poverty line, defined as PHP1400/month.

          Now, GibsonTheGermans’s observation is quite correct: the cost of living in the Philippines is higher than average, and wages are awful.

          So I ask you: could YOU live on PHP1400/month? Could you even live on P5000/month, which is the average agricultural wage? If you have a couple of kids to support, is P5000 not poverty level? I challenge you to feed, clothe and school even one kid (plus yourself) on that income.

          The Philippines pretends there a mere 30% are “poor” simply by setting the poverty threshold at a completely unrealistic level.

          So don’t give me that “no scientific basis” rubbish. What does “science” have to do with it? You only have to look around the average rural barangay to see that MOST PEOPLE ARE DIRT POOR. Is it exactly “80%”? Of course it isn’t. How does that alter the fact that MOST PEOPLE ARE DIRT POOR?

          Here’s the thing though: as NotTonyB said, they don’t have to be poor. They choose to be. Everyone I meet who calls themselves “poor” is, in fact, not. They have land (a lot of land), they have a place to live, they’re able to work … but they just don’t want to. Or they do things that are completely pointless, like growing rice and spending all their income on pesticides and fertilizers.

          So yes, it’s not easy to earn a living or to get the things you need. But it’s not IMPOSSIBLE. Mostly, it’s a lack of imagination that keeps the economy stagnant and the population poor.

        5. @marius, you are comparing apples and oranges. The basis is basic necessities not inflated necessities which common term is luxury.

          A family of 5 who earns at least P12k is above poverty level assuming that the family doesn’t go thru luxurious food or items.

          Of course if your assumption is that a family of 5 needs cellphone with corresponding load for each person of family to eat chicken every day, 2×3 cups per meal per person, buy the newest gadgets the 12k php with the minimum wage won’t cut it. All of which has nothing to do with minimum wage but beyond the means lifestyle.

          Now What Gibsons asking is unrealistic, if you have 100% increase without increase in performance. Why? Because almost 90%+ of employment comes from SMEs which cannot afford such an increase. This means total economic collapse because they cannot afford hire employees. These employees lose their jobs. The idea of benefits that Both of you want with the same output exist in social countries and countries like Greece which are unsustainable.

          All of these assumptions of wage increase assumes that employers have unlimited amount of money which is not true. Most of the time, the employer is just as wealthy as the employee difference being the employer is more knowledgeable and hard working wherein the capital can just be around 10k php or less.

    2. GibsonTheGerman: I agree, the situation is a disgrace. I have a friend (a skilled guy) who moved back to the countryside because he figured he’d be better off there. Smart move. He was right. Because he’s a smart guy, and he’s one of the few people who can (a) count and (b) handle his money, he can have a decent lifestyle there.

      Any Filipino could do what he does. When the state is your enemy, the only rational solution is non-compliance. Co-operate with your neighbours; create your own economy. Ah, except this is the Philippines. Co-operation is impossible: there’s always at least ONE person who just wants to steal all the money and screw everyone else over.

  2. I’m not a moneylender, and I never lend money to friends, because it would be an insult to our friendship.
    Friends give without counting the cost. I have a sister-in-law who’s a lawyer, who could have gone overseas but chose to stay here. She’s been cadged by heaps of her relatives, but never complains, because, as the saying goes, ‘what goes around comes around.’
    But I’m terribly proud of her, and cherish her.

  3. Money, so they say, is the root of all evil to-day.

    I’d be happy if to just have money to lend, and decided not to.

    1. Money, so they say, is the root of all evil to-day.

      Not really, it’s the love of money. 🙂

      Without money itself, financial transaction is way slower (just think of barter trading and you get the picture).

  4. Greece should have not joined the EU in the first place if it’s unable to compete economically with other EU countries. The mere fact that Greece government presented inaccurate assessment of their viability to join EU shows something shady.

  5. All that remains is the misery of the people of Greece. The thieves are long gone.

    Protect yourself at all times, evil is afoot and rarely travels alone.

  6. It is easy to lend money…however, it is hard to collect from the borrower; especially , if the borrower cannot pay.

    Ask those Government Banks in our country…how many foreclosures do they have.

    Greece will survive like other bankrupt countries…

  7. Latest news is that there is an agree(k)ment.

    Next important moment is this coming wednesday when the Greek government must approve all the measurements.

  8. Yes, if i knew someone would guarantee the debt and if i knew i was too big to be allowed to fail. — US banks circa 2004.

    There is more at stake for the EU, a most imperfect union. Letting Greece go [resulting in destab (hehe Filipino english word)] could result in more “terrorist” aka middle eastern islamofacist influences flooding into Greece.

    Also even if the Grexit does well it will provide a template for other debtors like Spain, Portugal, and Italy to pressure creditor EU countries for better loan terms.

    Greece is an existential question for the EU. Was it smart to do this in the first place? As we know the hardest thing to do when one is hell or heaven-bent on doing something is to do an Elsa and let it go.

    Lastly, why conduct a vote if your government will agree to similar austerity measures anyway? leverage?

    1. @ ICE, this is exactly what is happening here. The ‘HOISTING’ of bad ‘Private Debts’ incurred by the Bankers being ‘HOISTED’ onto to the taxpayers by the State. It is a new form of tyranny and it goes by the Horse-Dung catch-phrase “too big to fail’ and the people are either blinded by hunger or too stupid to see it.

      It happened in the USA to the tune of $1 trillion, then Ireland (at least they voted to pay for it, like frikkin IDIOTS ! it doesn’t get any dumber than the Irish situation, it just doesn’t ) and now Greece. Next it will be Italy and their 240 tonnes of Gold and it will be confiscated in much the same way. The plot is already underway.Spain and Portugal have the death mark on their asses too.

      Everyone knew then, and those who did not? They surely do know now that:
      The German government knew that the Greece economy had been looted and was bankrupt and could not possibly pay back the loans extended to them(‘ODIOUS DEBT’), yet they loaned money out and they had no right to do it ! Members of ‘Der Bundestaggen’ told Angela Merkel NOT TO LEND GREECE THE MONEY,because they could not pay it back, but she did it anyway. This act was the effort needed to push the bad debts of the Banker’s onto the entire continent of Europe’s population.
      Now, private ‘hedge funds’ and ‘Equity firms’ are going to swoop in and sweep up Greece’s ‘PUBLIC ASSETS’ for pennies on the Euro. The re-writing of the laws that prevented this from happening in 2008 will not stop the theft from occurring this time. Whether the Greeks know it or not: Their only hope is that they,the Greek Parliament and people, decline the deal and leave the Euro. China and Russia are ready to bail the Greeks out too !!! WOW ! and if Tsipras doesn’t take the opportunity to exit the Euro and free his people is it because he has been told that he and his family ,friends and anyone who looks like them will be exterminated? OR, even worse,Tsipras was a rat bastard all along, which very well may be so. IT IS A FACT THAT The Man has the clearest of mandates from the Greek people to reject austerity and after rejecting the Eurogroupen’s 1st austerity offer he is now going to accept an even worse deal? NO, something is wrong here, all the way around. Something has fouled up these proceedings and the Greek people, who are so close to exiting their enslavement by bailing out from China or Russia (or even the new BRICS development Bank?), may well have been sold-out by the Man, Tsipras ,he who was so adamant about ending austerity, but now agrees to it? WAIT A MINUTE HERE !!!!! Now it appears that Tsipras has been lying all along,yes ? Tsipras, if he was serious about ending the savagery of austerity on the people of Greece? Wait, why then has Tsipras not set-up alternative currency contingencies even though he has had over two weeks to set the process in motion and get some new ‘Drachmas’ printed and ready to be put into circulation,yes?
      This complete lack of preparation is the ‘tell-all’ part of this ‘charade’. Yannis Veroufakis ,whose name literally means ‘FALSE TRUTH’ (‘vera=truth’ & ‘Fakis = Fake’) jumped ship like the rat bastard he could now very well be and engineered it so it looked like he was a hero, to the dumb Greeks, and all along he was playing his fellow countrymen for the chumps they have been set-up to be.
      and could it be EVEN WORSE:
      Now, the ‘template’ has been cast into iron and this new State supported Banker looting mechanism will now be used around the globe to reduce the 99% into further ruinous conditions while the 1% (the Bankers and their State buddies) get rich on the cheap by this blue-print of insidious yet effectively efficient mode of class-warfare?

      Only a ‘GREXIT’ will prove the above hypothesis wrong.

  9. Again, to be repeated for the nth time, again, for the nth time, money is NOT the root of evil. Money is a thing; so, it is amoral. Good and evil can only refer to someone with intelligence; a thing has no intelligence. The correct cliché is: LOVE of money is the root of evil. In other words, greediness is what is evil. Anything in excess is what is not good. Eating too much is not good, drinking too much is not good, etc.

    But, it is a horrible situation not to have money. So the lessons from Greece for Philippines, individual-wise and government-wise.

    1. Money that you did not work for, or earn, is not good psychologically and sociologically. There is something more uplifting in earning one’s own money, or one’s own keep. It gives a sense of accomplishment, which in turn gives confidence. And, when there is confidence, it spurs more accomplishments. And when you accomplish more, your outlook of life is positive. Money that is not a product of hard work makes one look at life more and more with negativity, like one was a victim. Is this why PHL generates a negative vibration?

    2. Borrowing money is good for it leverages one’s capability. Businesses do it all the time to leverage things for growth. But, and this is a big BUT, do not borrow when you even have a small doubt of your paying capability. For unpaid loan brings curse from any angle you look at it. Unpaid borrowing brings unnecessary clouding of the mind and infects whatever one does. It enslaves without one realizing it.

    3. Plan, plan, and then plan so that one will not find oneself forced to borrow unnecessarily and in untimely fashion. Prepare for emergency situations.

    4. If one borrows, read the fine prints. Banks, financial entities, etc.are full of predators. You give them an inch or any sign of weakness, they will pounce on you within seconds. That is how banks earn big by monitoring the weaknesses of borrowers. It is a tough world, and it is useless saying it is not.

    5. Live within one’s means. No need to be mayabang, for the last laugh belongs to the humble and the quite hard worker. Government should stop dole-outs for it insults human dignity and promotes mendicancy, which in turn generates more negative vibration.

    6. Do not steal or cheat for that will make you crazy without you knowing it. It rewires the brain, and that is why psychologists say stealing attacks integrity directly. You are no longer unified; your unity as one person disintegrates, you think you are two, three, persons even if one person can only be one person. You see why corrupt politicians talk like mental hospital patients.

    7. The world is made up of givers and receivers, but you would rather be on the side of the givers for the more you give the more you receive, money-wise and otherwise.

      1. @ ADD :
        that is an opinion a lot of people may disagree with.

        PT Barnum said it best: “There is a sucker born every minute.”, and it is a fact.

        1. @Gibson Well, it should be read then in the context that PHL has one of the highest rates of bad loans. When you dig for the details of these, you see car loans, home mortgages, and start-up businesses because nice offices were their priority first. Chinese and Koreans don’t care about elegant offices at first. They worry about streamlining their production so that they can asap roll out quality goods that could be deliverd on time.

          But then, you are also right. So, if you will allow me to rob you of your idea, I will make it as my #8 suggestion: Do not be suckers; fight for what is right and for what is yours as rights, but with a caveat (cuz again we’re talking of PHL) that your rights end where the rights of others begin.

  10. It is the expressed intent of international bankers to imposed upon developing nations such as Greece and even PH in mountains of debt. Loans are granted for such farcical projects like highways, which encourages the proliferation of cars, benefiting the oil companies. Turning no profit whatsoever, these projects ensure that the status quo of “industrialized” and “first-world” nations are protected. Money and national resources which would have been used for the economic and social development of our nations are instead transferred to external creditors. To make sure that there’ll be a continuous flow of money for the financial oligarchs, policies are imposed on the debtor nations such as cuts on social spending. Unbeknownst in the PH, the IMF have been at it since 1980. Yes, Virginia, way before the Aquino assasination, “structural adjustment programs”, AKA loans, were implemented, supposedly designed for the betterment of our nation. To add icing to the devils’s food cake, Marcos had already penned beforehand PD 1177 back in 1977 (7 sure is a favorite number of Marcos), a law that requires our gov to pay foreign debt first and foremost before any other expenditures. Yum yum! Succeeding gov such as Cory’s and GMA’s risked coups if they have even have the slightest idea of abolishing this exploitive law. There is a Santa Claus for capitalists!

  11. There seems to be debate on whether the one who’s responsible is the Greek government or the Greek people. Some say one shouldn’t bundle the Greek people with the bankers and politicians.

  12. Ppl, have you seen this >>> http://goo.gl/0MB5Hy

    This is really getting to be too much. Noynoy and Abad, I think we will really see to it now that you both get locked up in jail after 2016 irrespective of who gets into power, you bastards.

  13. The attention should NOT be on Greece, it should be on ‘Deutshebanke’ of Germany. They are the ones on the hook for the ‘bad loans’ that have been made to the Greeks. The confiscation of Greek state assets is really a theft the Greek people should reject and never agree to. If they do not accept the new ‘austerity’ terms advanced by the E.U. Groupen, as they should not, then the German bank will implode and set off a far more gigantic systemic collapse than what is currently being experienced in Greece.
    THAT IS THE REAL STORY HERE. How ‘Deutschebanke’ has irresponsibly created money out of thin air to lend to a bankrupt state that can not ever repay the loans,NEVER.
    The game is over, lets face it and call this what it is: A SYSTEMIC COLLAPSE. it is looming and if it doesn’t happen now, it is only a matter of time until Greece will be unable to make a payment again……..and then…….what???
    Get precious metals and keep them outside of the banking system as paper currencies are doomed.

  14. My principle is easy: I don’t LEND money!

    I’ll either GIVE it to you, not expecting a payback – as a gift or…

    I’ll expect you to EARN the money you get from me.

    Why?

    Simple, very simple: Collecting on the debt.

    If I lend someone money, what really scares me is how will that person react when the time comes to repay the debt? Remember, there are no sure things in life other than the obvious sunrise, sunset, death and taxes so paying a debt scares me witless!

    The person may be honest and willing but is he able? What pressures will he face come time to pay up? What do I do as the lender if he cannot pay? Strong-arm him? Threaten him? Hurt him? Ignore him? Plead with him? Curse him? I mean I could go on and on but to save myself all that grief, I just DON’T LEND PEOPLE MONEY! Period.

  15. If you lend a close Pinoy friend a book or a DVD, chances are you won’t get it back – UNLESS you come up with some desperate sounding reason to “borrow” it back. Pinoy’s generally don’t understand the word borrow. The mere fact that you have to ask the borrower to return the item is insulting enough. Money is a bigger deal. If a Pinoy asks to borrow from you some money – be armed with a contract with penalties for delayed payments – like confiscation of appliances. All the lending disasters in the Phil have ruined a lot if friendships and even families. If you want to maintain friends don’t mix money into the equation. Pinoys only understand the word give. Borrow and give are synonyms in the Pinoy mind – another mentality defect we need to fix. What a tall order redeeming these minds! Still nothing’s hopeless while there’s life. Long live the Phil!

  16. The logic is this: the one wants to lend the money has the gall to be angry once the lender wanted the money back. Even if there is an agreement.

  17. Might be an option if I have goals to manipulate someone. Its a risk though and too many factors to think about.

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