The Organisation for Economic Co-operation and Development (OECD) has warned that the world’s 30 leading industrialized economies will see their indebtedness grow to 100% of output in 2010, a near doubling from the percentage 20 years ago. (via Public debt imperils world economy – International News – livemint.com).
Till the fat lady sings
The debt spiral is not ended yet.
Like the Dubai crash shows, the world economy is not yet out of the woods. Struggling firms, in the face of a weak consumer and industrial markets, may just keel over. A domino effect may set off yet another round of closures, bankruptcies, mergers, and defaults.
More importantly, are Western Governments. With public debt (read that as Government debt) exceeding 100% of GDP for every Western Government – Ireland at more than 1000%, Britain at nearly 200%, US at more than 100%, they are the vulnerable soft-spot of the global economy.
I want more
The shopping bill for Western welfare state is not going away – except up. Welfare bills are getting more ambitious – and the domestic lobbies want more ambitious schemes. High cost economies are being protected by barriers and stockades.
Run … hide … but you can’t turn your back
The political constructs of the West have hit a wall – and there is no way but down! Since the West is busy hiding elephants in the room, the need for a different political ideology remains unaddressed.
- Moody’s puts Japan debt ratings on review (theglobeandmail.com)
- Chinese public debt: Coming clean (economist.com)
- Moody’s reviewing Japan rating for downgrade (seattletimes.nwsource.com)
- How to illustrate U.S. public debt? (ask.metafilter.com)
- Japan disaster may hurt world economy (politico.com)
- Debts, Debts, Debts (businessinsider.com)
- Moody’s Threatens To Warn About Cutting US Debt Rating (businessinsider.com)