[sparky]

.
A central issue underlying all others is the indebtedness of various governments across the world
call me a curmudgeon but It doesn't looks pretty .
http://www.visualcapitalist.com/by-this ... onal-debt/
numbers can be argued about but that's the rough size of the problem .
the "rich" countries are those which have the most debt .

an interesting number is the third row .
How much should the central government need to increase taxes to balance the budget
the answers is that there would , probably , be big trouble with the taxpayers .
so far debt has been pushed onto the next generation .
it's akin to maxing the credit card and giving the bill to the kids .
The thinking was that growth and inflation would help to shrink the total
unfortunately with Secular Stagnation looking increasingly real there is very little real growth
the stagnation in consumer income means there is very little inflation too.

central banks are in coffin corner ,
any increase in inflation would dramatically increase their debt repayment
any decrease in inflation squeeze their tax revenues

This is only government debt , private debt is not mentioned

[Shaved Monkey]

There is a race to the bottom to attract Business by parasite nations trying to attract the tax avoiding corporations at the detriment of its citizens and the worlds citizens.
Corporations need to pay more tax,so do the people who have benefited from the safe enviroment.
What keeps 1st world countries 1st world is the taxes that build the infrastructure and maintain the civil order,its the cost of doing business in a safe market place.
And governments need to work out what they need to support and what they dont.
Middle class,and corporate welfare seem like obvious choices.
The military seems another good place.
Propping up the fossil fuel industry is another good place.
Tax regimes designed to favour the rich are another good place to cut.

[onlooker]

Debt is completely unrealistic and out of control. The key point is yes, all this debt cannot and will not ever be repaid. The whole debt regime is fast losing is viability as economies around the world can no longer grow. Under these circumstances debt loses its appeal as creditors are wary of lending in a contracting economy. In real terms what debt has meant for all entities from the biggest to the smallest is like a tax burden. However the tax paid to private banks rather than the govt. So these "tariffs" have not helped people or society. Rather it is an ever heavier weight burdening countries on down too individuals and families. I do not see how this debt regime can continue for too much longer. The problem is the high up corporations and banks do not seem keen on trying to change this regime for it would mean a radical restructuring and reorganization of existing economic power structures and leverage. Only wider society via their governments can mandate and effect this change.

[dissident]

Looks like the deciders running those debt ridden "rich" countries have decided they need a good war to reset everything. These psychos have no clue what they are doing. It will be nothing like WWII. There will be no ascendant superpowers coming out of a thermonuclear war. The GDP will not grow thanks to industrial production to feed the front; it will be over in 30 minutes. But some 3rd world countries will become the new "superpowers" in a relative sense.

[Shaved Monkey]

Or print and spend like a mad man on the infrastructure your country needs and when it goes to pot just print a different brand of money.
Its only paper

[careinke]

In a non growth economy (something we have to eventually end up with in a finite world), a debt based monetary system makes zero sense. I suspect we will transition to a deflationary type of crypto currency. So much easier to keep track of you.....

Personally, debt is cancer, and should be killed as soon as possible.

[sparky]

.
Well yes and no , as usual , having no debt is quite bad , it leave the currency without a monetary lever ,
a lot of pension funds and insurances like government paper , it provide the safest form of long term investment .
if the debt is used on infrastructure financing it can be quite good .
people take mortgages , it save on renting until one has the full amount .between 30 and 50 % is quite innocuous

then again , if the debt is simply to pay for government running cost , that's the way to ruin ,
90% is critically dangerous , 100% and no severe readjustment is hospital case bad
like keeping up a lifestyle beyond one's means , hoping to get this big promoting and big salary eventually .

bad habits are the hardest to shake off .

[onlooker]

http://www.un.org/apps/news/story.asp?N ... BIfPiSKSkd
This is a good story that describes how Debt really has gotten out of control in and around the world. Basically, the debt burdens of many countries and companies and individuals is unsustainable and very precarious should another global recession hit.

[vtsnowedin]

Is not every debt owed to whoever lent the money? If the world has huge debts then somebody has huge accounts receivable.

[onlooker]

Is not every debt owed to whoever lent the money? If the world has huge debts then somebody has huge accounts receivable.

That's assuming they can collect. Also when its only Bankers who stand to gain, that does not seem like a prescription for a healthy Economy

[vtsnowedin]

Is not every debt owed to whoever lent the money? If the world has huge debts then somebody has huge accounts receivable.

That's assuming they can collect. Also when its only Bankers who stand to gain, that does not seem like a prescription for a healthy Economy

Usually both the borrower and lender stand to gain. The car buyer gets to and from his job, the farmer plants his crops, the factory owner builds a new plant, and the bankers get their money back plus interest. The debts I do worry about are credit card debt and lavish second homes along with subprime mortgages and the Elephant in the room, government deficit spending on welfare programs. money flushed down a rat hole with no way to stop the bleeding or pay back the debt.

[sparky]

.
the usual way governments deal with excessive debt is to wipe it off , it has happened dozen of times down the centuries up to this decade.

the means to reset are either through massive inflation if the debt is in local money or
declaring a moratorium and inviting its creditors to a serie of talks telling them how harsh the haircut is going to be
African countries do it on a regular basis and have their debts "forgiven" again and again .
Argentina and Greece are more recent cases
the bigger the country , the weaker the leverage of the .
at a pinch , a few decade of misery for the locals with a game of musical chairs with the politicians.

[onlooker]

You got it Sparky. This debt regime imposed upon the entire planet is mostly favoring the bankers at this point. Debt has become so onerous upon so many. Not to mention the conditions and stipulations attached to the loans by banks and big institutions are very harsh upon the native population of those countries

[sparky]

.
there is some difference of treatment between poor countries and more substantial ones
as Thucidides tell in the Melian dialoges ,
the powerful Athens was going to shaft the small state of Melos , the negotiations were a pure formality
" the strong do what they can and the weak suffer what they must "

[sparky]

.
the elected president has said many things ,
two notable have been his intention to cut taxes and rebuilding the US infrastructure
both things devotedly to wish for .
Since the US is running a federal budget deficit of about 15% ,it could complicate things somewhat
never mind savings ,we are in severe cuts territory and/or borrowing more again
One of the biggest foreign lender to the US those days is China , U.S. debt to China is $1.157 trillion
I would think cheesing them , now , not to be too good an idea

[onlooker]

I think this Debt situation being a dysfunctional characteristic itself is heralding the final unraveling of our Industrial civilization. It is the logical conclusion to a world needing and wanting to grow but that cannot in normal ways that honestly account for natural limitations and incorporate some sustainability. Basically Debt is a malignant growth like cancer and also like cancer product of a diseased body or in this case a dysfunctional weak Economy

[BahamasEd]

On a personal base, you should not have any debt.

And if you have assets, a good part of them should be in things that are not the debt of other people.

[vtsnowedin]

Debt is not the problem. Debt is home mortgages for families, debt is business loans, debt is promises between a dad and son for a college degree. Debt is a handshake. Debt is municiple bonds that towns and cities use to build sewers and highways. Debt is not a problem. The inability to pay off a debt is the problem. ...
...
.

Some debt is not a problem. The key is what you get for the money and will it last as long as the payments. A mortgage for a house or a bond for a school are fine. A debt for a welfare check or a study of why monkeys clench their jaws returns no value and the welfare checks have to be repeated each month.
The US government needs to cut spending by fifteen percent or raise taxes by as much or some combination of both that reaches a balance. An immediate freeze on raises and hiring would be my first step.