One thing I seem to constantly harp on in this blog is excessive government debt, its evils, and the harm it does the citizens of those countries and the eventual impact on their standard of living and currencies. Click to enlarge the above chart and get a geographic representation of world debt levels. The worst countries at living beyond their means are marked in red. The debt PIIGS---Portugal, Italy, Ireland, Greece, and Spain---teeter on the brink of crisis, with others not far behind. Unsustainable levels of government spending on social welfare are a problem in much of the world that few politicians have the guts to solve.
It interests me that the U.S. is one of the countries moving into the debt danger zone. I'm going to be interested in reading the Newsweek article mentioned in the previous post to see if the author has a sense of our longer run fiscal situation or if its focused on the short run snap back from the housing crisis.
ReplyDeleteThe lesson humans seem to keep learning over and over is that excessive debt and risk taking is bad for their financial health.... whether it is individuals, corporations or governments. It troubles me to see the US heading in that direction with no end in sight. I haven't read the article in Newsweek, but would guess it is a celebration of central planning, using the stock market recovery and housing stabilization to say the American economic engine is back.
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