Thursday, 25 February 2016

Money, Money, Money

You would have thought after the austerity fad that has swept the globe since the 2008 crash, we would finally have a handle on debt but a look at the list of countries debts shows that nations owe over £60 Trillion to each other and just one nation owes almost a third of that.
The United States is the worst offender and in the hole to the tune of $18,772,300,000,000 ($18.7 Trillion) or 103% of what the country brings in.
Second worst off is France which owes £5.7 Trillion then Germany £5.5 Trillion, Japan £2.8T, Italy £2.6T, Netherlands £2.5T, Spain £2.3T, China £1.6T, Switzerland £1.6T and the UK £1.5T.
Such is the state of the global finances that there are only 5 countries who have been able to avoid this economic insanity of debt and live within their means.
Macoa, the British Virgin Islands, Bruniei, Lichenstein and Palau are the only countries that bring in more than they spend.
With such huge levels of debt i can't see how countries are ever going to get out of the red and into the black, Iceland's debt is equal to £282,930 per head of population while each person in The Netherlands would need to find £226,503 each to clear the nations debts which is a lot of daffodils and tulips so i can't see these debts being cleared anytime soon.     
As for the UK, we each would need to find £23,240 each and that is after the Conservative Government have hacked and slashed whatever is hackable and slashable and still we need to find another £1.5 Trillion in savings so i don't know what the answer is but surely at some point nations will begin thinking how we do things at the moment isn't working and look for other ways of doing things.

14 comments:

Keep Life Simple said...

So do more Keynsian stimulus (opposite of austerity) and have the government spend even more, oh that increases the debt more so you need to raise taxes more...oh, that squashes economic recovery... Yeah more Keynes is the solution not austerity

Falling on a bruise said...

So you advise keep doing what we are doing and rack up even more debt?

Keep Life Simple said...

No, that is Keynsian thinking. I'm a smaller government, austerity supporter. Don't raise taxes. Reduce government. Reduce welfare related benefits and services. Reduce military expenses. Let Russia have the Middle East (good luck) except for Israel.

Falling on a bruise said...

But after 8 years of austerity, the debt is growing so more of the same and pile on even more debt which is what you say is the consequences of doing the opposite? Same result isn't it, more debt.

Keep Life Simple said...

National debt does not come from the private sector making to little money. It comes from government spending too much money - more than it brings in via taxing the private sector.

increasing government spending (Keynes) only helps to reduce the debt problem when it results in the private sector expanding more than the increase in government expense. Otherwise it just makes the problem worse. You've been growing government in the UK for 80 years, so you expect 8 years of austerity to fix the problem?

More regulation does not help the private sector grow. Repaving roads does not help. Changing road signs does not help. Increased taxes does not help the private sector. Etc

Falling on a bruise said...

In my simplistic view you can only reduce the debt by spending less or bringing more in. We have had 8 years of spending less but the deficit has not gone down, it has gone up. Everything 'easy' that could be cut has been cut and now they are down to the tough ones such as NHS spending and cuts to the police hence all the strikes and anger.
With nothing left to cut we have to ask why is it that we are still so massively in debt and if after almost a decade of cuts things are getting worse, why are we continuing down this same path when it so obviously isn't doing what it is supposed to?

Keep Life Simple said...
This comment has been removed by the author.
Keep Life Simple said...

Good questions. How does taxing people more stimulate the economy? Why does it take a higher tax rate (%) to maintain things like roads (patch them) than it took to build them (buy the land, engineer them, build them)?

Government is notorious for inefficiency. Worse, Hiring people to work for the government requires taxes to be raised to pay the people because government does not create wealth. It is an expense.

So reduce government workers to reduce gov expense and to improve productivity.

Or, you can increase gov more and increase gov projects more - but it will increase debt more and lower productivity- unless you raise taxes. Raising taxes discourages the private sector - lowering GDP and thus lowering gov funds.

Keep Life Simple said...

I don't know what you mean by austerity, but the UK federal spend has grown each of the past 10 years. To me austerity means the spend the spend decreases...

Falling on a bruise said...

Austerity as in reduce the amount the government spends to save money so reduce government departments, reduce welfare payments, pay freezes for nurses, police, fire service, close down services etc etc

Falling on a bruise said...

That is my point, after 8 years and savage cuts and services closing and pay freezes and redundancies and welfare reductions we are owing more so how can that be?

Keep Life Simple said...

I just looked and the U.K. Budget did not have "massive" cuts. In fact it looked like what it had was reduced increases... Not what I mean by austerity.

Falling on a bruise said...

No idea what you are saying but if what you looked at said the UK hasn't suffered massive austerity cuts then you need to find something else to look at because hats all there has been since 2008.

Keep Life Simple said...

What I saw indicated that the UK government expense is not less than 2008. It has increased, but less than planned.