Tuesday , 26 September 2017


Debt Clocks Tell the Story: Vicious Upward Debt Spiral Gaining Momentum – Take a Look

A vicious upward debt spiral is gaining momentum. The budgets of most advanced economies,time excluding interest payments, need 20 consecutive years of surpluses exceeding 2% of gross domestic product – starting now – just to bring the debt-to-GDP ratio back to its pre-crisis level.

[The following information is presented by  Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here register here). This paragraph must be included in any article re-posting to avoid copyright infringement.]

As accessed from Wikipedia, according to the Bank for International Settlements, if only one of the following three events were to occur, the increased financial burden imposed by ageing populations and lower growth would make it very unlikely that indebted economies would be able to grow out of their debt problem:

  1. government debt is more than 80% to 100% of GDP;
  2. non-financial corporate debt is more than 90%;
  3. private household debt is more than 85% of GDP.

The Boston Consulting Group (BCG) adds that if the overall debt load continues to grow faster than the economy, then large-scale debt restructuring becomes inevitable.

To prevent a vicious upward debt spiral from gaining momentum the authors urge policy makers to:

  •  act quickly and decisively
  • aim for an overall debt level well below 180% for the private and government sector
    • based on the assumption that governments, nonfinancial corporations, and private households can each sustain
      • a debt load of 60% of GDP,
      • at an interest rate of 5% and
      • a nominal economic growth rate of 3% per year. Lower interest rates and/or higher growth would help reduce the debt burden further.

Source: Wikipedia

To see an up-to-the-second visual of the debt picture visit the links below:

1. World (by country): http://www.usdebtclock.org/world-debt-clock.html

2. U.S.A.: http://www.usdebtclock.org/

3. Canada: http://www.nationaldebtclocks.org/debtclock/Canada

4. U.K.: http://www.nationaldebtclocks.org/debtclock/unitedkingdom

5. Australia: http://www.nationaldebtclocks.org/debtclock/australia 

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One comment

  1. Since the bulk of the US budget (60%) is for Military Spending, it follows that the Military is going to have to downsize while getting out of the War business, if the USA is going to survive as anything but a 3rd World country! I’d also add that the war on Drugs needs to end since DHS is almost 10% of our budget; combined their budgets represent about 3/4 of our entire US Budget, no wonder the vast majority of Americans are suffering, that is everyone not receiving some sort of “donation” from the military/enforcement complex, (which includes all of Congress) that are now running the USA!