North Carolina Finance

Jul 4 2018

World debt comparison: The global debt clock

#who #can #help #with #debt


World debt comparison

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.

  • This interactive graphic displays gross government debt for the globe. The clock covers 99% of the world based upon GDP. It uses latest available data and assumes that the fiscal year ends in December.
  • Debt figures are derived from national definitions and therefore may vary from country to country.
  • The clock shows the estimated debt at the point corresponding to the current date and time in whatever year you are viewing; this is why it increases even when you view past or future years.
  • All data is mapped on modern borders (Montenegro split from Serbia in 2006, Kosovo in 2008. South Sudan split from Sudan in 2011. Data for these countries are included in their parent nations’ prior to these dates).

It appears from the chart that the more assets of a country are distributed among its citizens the more the country is in debt. If this is true, then advanced economies serve the individual (i.e. Capitalism) while dictatorial economies serve the boss/dictator. Is there any solution?

CJ Lives Oct 6th 2010 16:02 GMT

I would say it matters.

When you owe someone thirty-nine hundred dollars, that’s your problem. When anyone owes anyone thirty-nine TRILLION dollars, I think it’s the problem of the debtor, the creditor and pretty much anyone else in any way associated with the global economy, i.e. all of us.

As we saw in 2008, when lots of people have been operating on the expectation of receiving payments from other parties which suddenly prove unable to meet their obligations, the result is messy even when no “real” value has been created or destroyed at any point in the process.

Global debt is not a very meaningful figure since it is all – quite obviously – owed to earthlings. If we’d borrowed from aliens then “global debt” would be cause for alarm. Suppose the aliens came collecting?

D. Sherman Oct 6th 2010 16:16 GMT

This is an interesting figure, and one that would be more interesting if we were given more information on how it was calculated. For example, in the US, does “public debt” include only that of the federal government, or also that of the states, which as I understand it is collectively on the same order as that of the feds. Also, if we’re looking at the overall indebtedness of all the world’s governments, shouldn’t debts owed by one government to another be excluded, since they’re essentially internal to the system we’re studying?

Either way, in round numbers this works out to around $10,000 for each person on the planet. If we were ever to consider paying this debt off, that’s how much we’d have to collect, on average, from each person. Given that we’d do well to collect $10,000 apiece from the richest few people in the richest few countries, and given that over half the world’s people have no income at all at a level that would interest a tax collector (less than $1000 per year gross), paying off this debt seems patently impossible. So, we will never pay it off, but we may continue to pay interest on it forever, which will result in significant international cash flows with attendant distorting effects on economics, politics, and society. Interest might be estimated at $500 per year per person, which is probably manageable, on the average, for a while, especially since the richest countries owe the most. The problem, of course, is that debt is growing faster than population or prosperity which means that eventually something must change. Pinpointing when that will happen is an exercise that will be left for the reader.

willstewart Oct 6th 2010 16:20 GMT

In fact it would be much better if we owed this to aliens; then we could default!

As it is we can only default by impoverishing ourselves. In fact one could surely see the phenomenon in that way; we are just less wealthy than we think we are. And our children will be less wealthy still – unless they decide to default by not paying our pensions/health bills.

doublehelix Oct 6th 2010 17:00 GMT

I don’t know what criteria the authors used to define ‘debt’, but the total unfunded liability of the US Federal government alone is somewhere on the order of 130 to 140 trillion dollars when all entitlement spending obligations are considered (give or take a few trillion). This completely eclipses the paltry 40 trillion number touted above as the entirety of global debt.

All lovely things will have an ending, All lovely things will fade and die; And youth, that’s now so bravely spending, Will beg a penny by and by.
– Conrad Aiken

Raise the retirement age for social security.
Freeze medicade/medicare spending.
Force revisions to pension contracts help by government employee labor unions.

Problem solved in the US.

Remember folks, government employment is nothing more than an extension of welfare.

ZenchL Oct 6th 2010 17:57 GMT

my understanding from this chart is that political stability decides economical stability. Governmental complexity decides public spending. Democracy borrow more than oligarchy.

TRHart Oct 6th 2010 18:13 GMT

“Remember folks, government employment is nothing more than an extension of welfare.”

What? This makes zero sense. Most government workers are performing some task that they are getting paid for while people on welfare are not working at all. These have zero correlation.

By your logic, the president, all our soldiers and all US diplomats are on welfare. I guess this should all be done by the private sector right. LOL!

naco22 Oct 6th 2010 18:35 GMT

Guys, come on! “Fight Club” already told us how to fix the problem! Something about blowing up the credit card buildings to reset the debt record back to zero.

Kidding, of course. The point is, clearly a revolution in thinking about finance, and even value creation itself will be required. Whatever shape the solution takes doesn’t matter so much as that we navigate the transition without violence, for a change.

What about the opposite side, the global public credit?

China has debt, but even largest credit.

Algeria shows negative values in 1999? His debt was reduced to half in 2001, but colored worse (clearer).

Argentine debt increased 22% since 2001, despite being “financially isolated”, and despite it, is colored clearer than in 2001.

This chart “predicts” that argentine debt will jump to 40% over 2001 value in 2011. Who will lend 20 billion to Argentina this year? It’s obviously false.

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