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Can be anything
K. Numa, the wife and economist of the richest Lithuanian billionaire, Nerijus Numa, discussed the latest economic problems on the radio news program “Verslo position”.
In general, when discussing the situation, he was pleased that the Lithuanian economy was growing in the first quarter of the year and assured that there was probably an advantage for smaller and more flexible countries like Lithuania, but added that in today’s world economy, everything is related. And if one country finds it more difficult to recover from a pandemic, it will affect others in one way or another.
When asked what, in general, about the whole situation regarding COVID-19 and the economy, he says his intuition, he said that he thought there could still be anything.
“We are talking about the economic aspect, but there are both political and social. Suppose that a year ago the riots we saw in the US For racial and social reasons, they have not disappeared and how will things continue to flow?
We also have increasing redistribution in some countries, which seems to be short-lived, but in the long run, you know, there is no such thing as a temporary tax or a temporary increase in budget spending, and those temporary things can become long-term. duration. (taxes-ed.) are increasing, their economic growth may stagnate. This, in the end, leads to negative social phenomena, “he said.
Taxes will increase
Speaking of the growing public debt, Mr. Numa considered that it was already possible to talk about the independence of the countries in this place and gave the example of Greece.
“As we have seen in Greece, voters are no longer deciding what to do, how to deal with budget problems, but third countries are already arriving,” he said.
According to K. Numa, in general, he would be among the economists who look at public debt quite strictly.
“There are those who say that there will be nothing here (if we borrow a lot), then perhaps there will be nothing in certain countries. Perhaps there is nothing in the United States due to indebtedness, they are probably not talking about Lithuania, not small countries ”, explained the economist.
When asked what he thinks could go wrong, he said that as public debt grows, the market gradually stops trusting and then interest rates rise.
“Currently, the UK spends three times more on debt service, that is interest, than the police. It is, let’s say, that the money could be used to increase the salaries of police officers, to hire more officers of cop.
<…> School costs us. It is not the case that we borrow and live at the expense of the future. And in the future, that money will still have to be repaid, and then inevitably there will be an increase in taxes. Then taxes are raised, economic growth slows down, people’s wage growth slows down, ”he said.
The economist also spoke of those who, when talking about debt growth, often say that interest rates are low, so there is no need not to borrow the necessary money. He compared it to another situation.
“Here as a party and on the third night a friend says: ‘Drink, drink more, maybe morning won’t come, maybe your head won’t hurt, maybe you cancel the conference, you never know’, but to do it with him fate of the country. “” He won’t pay, he won’t scalp when he has to raise taxes, he’ll pay the entire future generation, and do you really want to lend irresponsibly like this? “she asked.
According to K. Numa, another big question is where the borrowed money ultimately goes.
“<..> The question is whether the money that states are borrowing now goes to those most in need of quarantine, those most in need of compensation and support, or whether that money flows through the country, as the budget sometimes does. money.
And sometimes you can say that here with COVID-19 (related-ed.), But here is a nice cover, and the funds are not going at all.
And those who suffer the most are still sitting penniless and especially when it comes to small businesses that have been closed for longer in some countries, which is hard to understand, let’s just say why Gariūnai was not allowed to open shopping malls at the Same time. weather. “, He said.
Price increases may not be reflected in statistics
In response to today’s news, the economist also spoke about a four-day work week. In his opinion, employers should agree on this with the employees themselves, but it is also questionable whether in such a case, if the number of working days were reduced, people’s wages would not decrease.
“The question is whether you will win the same. It is possible that a part will earn the same, but to pay that part, the least productive will lose their job, which may be less qualified people, young people. <...>“, Reflected K. Numa.
When asked about inflation, he said that this is something very important and that we do not always have the tools to measure how much prices have actually risen.
“For example, the US price index excludes house prices, food prices and fuel prices because they fluctuate the most.
But what does that mean? This means that if the police did not include the most criminal area when tracking the crime, it would not mean that the crime was low. This would mean not monitoring the entire environment.
Let’s say in Lithuania, things like discounts. People buy food at a discount, the question is how it is reflected in the consumer price index.
Suppose Statistics Lithuania tracks a product from a particular manufacturer and another, similarly, another manufacturer, gets a big discount, people buy at a discount, then that discount may not be reflected in the price index. <…>. “People can feel that price increase and the statistics cannot show it,” he said.
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