Axios: The global debt binge begins anew
The world's debt rose by $3 trillion in the first quarter of 2019 — an almost unprecedented borrowing binge that brought total global debt to $246.5 trillion.
Why it matters: High levels of debt put countries in a vulnerable position in the event of a downturn and could endanger the world's economic recovery, said economists from the Institute of International Finance, which released the study today.
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WNU Editor: You know that this is not going to end well.
5 comments:
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It's important to look at the debt to GDP ratio; ours is about 104% right now. Japan's is over 200% and I struggle to determine what make sense. It's an old adage that a good business has 4-6x the debt over revenue, this debt would pay for infrastructure and equipment to make the products the biz would sell. So payoff would be in years. For a country, as long as this debt is to increase GDP than I am OK with it. If it's paying for social programs, that would not be good.
Mike
Social programs, yes, and especially so now that the wealthy and the corporations are on the public "teat" of welfare, all funded by debt of course. Trump has preached a few times that it is the debtor who is in charge so it is unlikely he will initiate any programs designed to lesson the country's debt. Does he care about his country's or individual's debt load? Not likely.
From a country perspective there are ways of dealing with large amounts of debt owed without having to actually "pay off" the debt including trade-offs and influence peddling.
When computerization hit the world massive numbers of jobs disappeared and not just those of a clerical nature as eventuality it hit management levels. The kids of the baby boomers, at the time saw the anguish their parents felt every night at the supper table and "perks" like teens have credit cards disappeared then the house. They learned the lesson that hard work eventually achieves nothing and that generation when hired put very little into their work.
When non management jobs were eliminated due to continued automation and overseas transfer, same thing.
The increased delinquency perspective regarding credit card debt makes sense and some of it was intentionally created.
Even people who have avoided credit cards are paying a price as the merchant discount and other fees are built into the retailers' pricing. If you are paying $100.00 for something most like that cost includes $3/$5 for the credit card fees the merchant pays to be able to accept credit cards at his store.
No wonder debt load is increasing.
From a country perspective of course don't forget the financing of wars, financing which often is a hand off to the wealthy.
It's paying for social programs and tons of military waste. Even the most hawkish hawks would like to see the defense dollars at least allocated to more useful programs instead of "plans" like spending billions on flooding the middle east with AKs and RPGs. More reasonable hawks will even admit that our overstocked inventory of land vehicles doesn't need to keep growing every year, production chains can be maintained at replacement-levels.
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