POLA83 Lecture October 20 2011.docx

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University of Toronto Scarborough
Political Science
Waldemar Skrobacki

POLA83 Lecture October 20 2011 Global Public GoodENIN Nuclear proliferationBRICS Brazil Russia India China South AfricaG20 G7 AND G8 G20 are BRICSRichest and developed economiesIreland bankrupt Portugal similar reasons as Ireland Spain and Italystill sovereign but having troubles paying the billEU came up with EFSF giving out moneyoWhen I have 100 dollars I can leverage about 80 dollarso500 billion euros is to be given to countries who have trouble paying bills and also to pay peoples salaryoBailout is for public sectoroEuropeans have threatened that theyre going to leverage 500 billion oMeeting in Europe is to give a some kind of solution to the debt crisisItaly was hit with lowering of credit and SpainWhat does this mean Credit rating if you ask for a loan and have enough money to pay back and the bank looks at your creditIf credit is bad then it gets worse Credit rating for countries leverage is being used Best leverage a country can have is triple AAA America has AA Italy ASo countries and states have to have high leverage The lower the rating the higher the interest Instance if you buy bombs for Canada and government pays particularly no interest you end up with 1 somethingCanada is low in yield Interest on bombs is low Canada is triple A Italy has to pay 6 or 7 interestWhat can you do to make interest high on bombs for Canada Decrease interest ratesmore yieldEurope has come up with an idea of creating a public rating agency Idea is to be subjectiveBrazil and China were supportive of the Euro
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