Bloomberg:Global Debt Exceeds $100 Trillion as Governments Binge
10 Replies to “In The Long Run We Are All Broke”
Nothing from nothing leaves nothing…
Now lets talk about those Unfunded Liabilities.
Only $14,286 for every man woman & child on the planet…of course, the global per capita income is just over $10,000 per year. (ratio 1.4286)
Here in Canada, with a federal/provincial debt just topping $1.2 trillion, or $34,783 for every man/woman/child, our per capita income is $51,704. Our ratio 0.6727 or 40% of the global.
Meanwhile, the USA’s debt of $55,282 per person versus their per capita income of $51,704 gives them a ratio of 1.0692, just under 75% of the global but almost 60% higher than Canada’s
I suppose I should feel better off – why don’t I?
Oh, it’s not just in the long run.
It’s now.
Johnny is right to point out that the total size of the number is meaningless. What matters is two things, the total income being used to service the debt as a portion of the total, and what no one has mentioned, the size of the debt compared to the assets it has financed. Only then do you know whether this has been good debt or bad debt. If it’s been used to finance infrastructure and other things that promote the creation of wealth, fine. If it’s been used to fund consumption, then it’s wasted.
Knight, I don’t much care about unfunded liabilities. Those are things which haven’t happened yet, and may never happen. Canada for example dealt with its unfunded liability in CPP by deferring the age of eligibility. We only care about unfunded liabilities to the extent that the political disfunction in Washington is preventing any useful steps being taken.
And hence the push for global government.
The cities blame the provinces, the provinces blame the feds, who better for the feds to blame than an unelected, non representative body like the UN.
Kleptocracy rules.
Human history shows this clearly, anytime the parasites get to steal unchecked, they destroy the economy and the civilization on which they feed.
Trust is dead.
No trust= no trade and no civil interactions.
Force is becoming the only effective means.
Dry goods, medicine and ammo.. all real good investments.
Isn’t the unfunded liability of pensions to support future consumption?
That’s their future rent & grocery money, not for infrastructure or investment which I would support. And in the USA, that tally is expected by some to surpass 100 trillion. Largely unfunded.
*not overly optimistic here.
Marc, the issue is that all pensions, CPP, US Social Security, are all supposed to be and were set up on the premise of being fully funded. Workers would contribute enough that with contributions plus fund earnings over the years that all the payouts would be from the contributions that went in.
That was then. Two things happened to tank the pension fund economic model. 1. long term investment earnings have generally collapsed over the last 10 years or so. 2. Retirees are living much longer than they did in the 1950s when the basic economic model was established.
There are two basic things which can be done to rectify the problem without dumping it on taxpayers. 1. Increase contributions from workers, which is fine for those still working but doesn’t help those already retired or nearing the end of their employment years. 2. Cut benefits, either by reducing payouts or increasing the age of eligibility. In the long run, it’s a compbination of both of those things which will have to be done. Canada has partly solved the problem by increasing the age of eligibility for OAS to 67.
But the US has done nothing, and that’s a problem. It’s also done nothing to properly fund civil service pensions. This latter will be the subject of huge fights with the public sector unions in the years to come.
To whom do I owe this money?
Seriously, if I owe it to the Ontario teacher’s pension fund for example, then I really don’t care. It’s not my fault they made bad investments in big government.
Nothing from nothing leaves nothing…
Now lets talk about those Unfunded Liabilities.
Only $14,286 for every man woman & child on the planet…of course, the global per capita income is just over $10,000 per year. (ratio 1.4286)
Here in Canada, with a federal/provincial debt just topping $1.2 trillion, or $34,783 for every man/woman/child, our per capita income is $51,704. Our ratio 0.6727 or 40% of the global.
Meanwhile, the USA’s debt of $55,282 per person versus their per capita income of $51,704 gives them a ratio of 1.0692, just under 75% of the global but almost 60% higher than Canada’s
I suppose I should feel better off – why don’t I?
Oh, it’s not just in the long run.
It’s now.
Johnny is right to point out that the total size of the number is meaningless. What matters is two things, the total income being used to service the debt as a portion of the total, and what no one has mentioned, the size of the debt compared to the assets it has financed. Only then do you know whether this has been good debt or bad debt. If it’s been used to finance infrastructure and other things that promote the creation of wealth, fine. If it’s been used to fund consumption, then it’s wasted.
Knight, I don’t much care about unfunded liabilities. Those are things which haven’t happened yet, and may never happen. Canada for example dealt with its unfunded liability in CPP by deferring the age of eligibility. We only care about unfunded liabilities to the extent that the political disfunction in Washington is preventing any useful steps being taken.
And hence the push for global government.
The cities blame the provinces, the provinces blame the feds, who better for the feds to blame than an unelected, non representative body like the UN.
Kleptocracy rules.
Human history shows this clearly, anytime the parasites get to steal unchecked, they destroy the economy and the civilization on which they feed.
Trust is dead.
No trust= no trade and no civil interactions.
Force is becoming the only effective means.
Dry goods, medicine and ammo.. all real good investments.
Isn’t the unfunded liability of pensions to support future consumption?
That’s their future rent & grocery money, not for infrastructure or investment which I would support. And in the USA, that tally is expected by some to surpass 100 trillion. Largely unfunded.
*not overly optimistic here.
Marc, the issue is that all pensions, CPP, US Social Security, are all supposed to be and were set up on the premise of being fully funded. Workers would contribute enough that with contributions plus fund earnings over the years that all the payouts would be from the contributions that went in.
That was then. Two things happened to tank the pension fund economic model. 1. long term investment earnings have generally collapsed over the last 10 years or so. 2. Retirees are living much longer than they did in the 1950s when the basic economic model was established.
There are two basic things which can be done to rectify the problem without dumping it on taxpayers. 1. Increase contributions from workers, which is fine for those still working but doesn’t help those already retired or nearing the end of their employment years. 2. Cut benefits, either by reducing payouts or increasing the age of eligibility. In the long run, it’s a compbination of both of those things which will have to be done. Canada has partly solved the problem by increasing the age of eligibility for OAS to 67.
But the US has done nothing, and that’s a problem. It’s also done nothing to properly fund civil service pensions. This latter will be the subject of huge fights with the public sector unions in the years to come.
To whom do I owe this money?
Seriously, if I owe it to the Ontario teacher’s pension fund for example, then I really don’t care. It’s not my fault they made bad investments in big government.
A picture is worth a thousand words.
https://fbcdn-sphotos-a-a.akamaihd.net/hphotos-ak-ash3/t1/1920634_452402578223909_166457200_n.jpg