The global debt clock:Our interactive overview of government debt across the planet
The clock is ticking. Every second, it seems, someone in the world
takes on more debt. The idea of a debt clock for an individual nation is
familiar to anyone who has been to Times Square in New York, where the
American public shortfall is revealed. Our clock (updated September
2012) shows the global figure for almost all government debts in dollar
terms.
Does it matter? After all, world governments owe the money to their
own citizens, not to the Martians. But the rising total is important for
two reasons. First, when debt rises faster than economic output (as it
has been doing in recent years), higher government debt implies more
state interference in the economy and higher taxes in the future.
Second, debt must be rolled over at regular intervals. This creates a
recurring popularity test for individual governments, rather as reality
TV show contestants face a public phone vote every week. Fail that vote,
as various euro-zone governments have done, and the country (and its
neighbours) can be plunged into crisis.
In the end analysis it will come
back to the fact that the world owes this money plus more to Africa. I will you
why.
Look at this analysis: who does the world owe? One analysis says the
governments owe this money to their citizens. This it says is because the governments
of developed economies like Canada, US, UK, Germany, China etc take part of or
cut the profits earned in Bonds, mutual funds etc so that with it they are able
to crash the interest rates. Now interest rate in some of these countries is as
low as 2%. At this rate individuals are encouraged to take loans from banks
which in turn they will invest back into they economy.
In Africa the case is totally
different. In Nigeria for instance it is highly not encouraging to take loans
from banks at all and saving money in the banks is also not encouraged. Why? When
you save in a savings account you get also nothing in interest. In fixed deposit
you get a maximum of 7 – 8% and in Treasury Bills you get a maximum of 10%. But
when you want a loan from the banks they ask you to pay between 20 – 30% interests.
How does a home grown business survive in such a hash business climate? How can
African economy develop in this kind of situation?
Every year in September the
United Nations General Assembly meets in New York to discuss global challenges.
Have you ever heard them discuss or even ask the question ‘how do we solve the
problem of corruption in developing countries?
Every now and then the governments
of these developed economies freeze or seize assets stolen from Africa by
African Politicians. Currently the UK government is trying to seize a 90
million pounds worth of assets owned by one James Ibori a former governor of
Delta State in Nigeria. How much of these assets do they return? You would
recall the Abacha loot that is still being returned since 1998. How much of
these loots are returned with accumulated interests? Now these are only the few
we hear about in the public domain. What about the ones we don’t get to hear
about? Every minute a corrupt government official steals billions out of Africa.
These billions of Dollars are invested in these developed economies while the
African economy suffers.
Until the world through the
United Nations comes together to fight this corruption they owe Africa. The UN
should enact a convention that would make culpable the government of any
country in which these stolen wealth is invested and all member nations must
sign and ratify the convention.
scott lee
Oct 10 2012:
If you have a pension or mutual fund with a
diverse portfolio that includes the bonds, than those countries might
owe money to you. One of the problems with having low interest rates to
stimulate the economy (which is what we are doing in Canada) is that
people who have a lot of canadian bonds in their retirement fund are now
getting lousy returns. The interest paid on those debts is the profits
of the investors who put that money up front in the first place.
Debt today is bought, sold, divided, and cumulated, and distributed among large and small investors. Sometimes those investors are billionaires, sometimes they are financial companies which include them in mutual funds to sell to small investors, and sometimes they are nations.
If countries can't pay back their debt than investors won't want to buy bonds, which makes it harder for the governments to raise the money they need.
Debt is very different for nations than for individuals. Borrowing money provides profit for certain sectors of the economy. In international relations, governments can use their own resources to support allies or out maneuver adversaries. In the case of pensions, when governments pay off their interest, they are supporting the retirees who invested in their country when they were young.
It is not always bad, but it cannot be ignored
Debt today is bought, sold, divided, and cumulated, and distributed among large and small investors. Sometimes those investors are billionaires, sometimes they are financial companies which include them in mutual funds to sell to small investors, and sometimes they are nations.
If countries can't pay back their debt than investors won't want to buy bonds, which makes it harder for the governments to raise the money they need.
Debt is very different for nations than for individuals. Borrowing money provides profit for certain sectors of the economy. In international relations, governments can use their own resources to support allies or out maneuver adversaries. In the case of pensions, when governments pay off their interest, they are supporting the retirees who invested in their country when they were young.
It is not always bad, but it cannot be ignored
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