Click for interactive experience
Graphic
Source: WSJ

Category: Economy

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6 Responses to “Global Debt Dynamics”

  1. billybob says:

    Much better visualization. The temporal slider allows for some nice interactive comparisons. Amazing to watch US private debt balloon under the Bush regime, and public to do the same under Obama’s.

  2. Angryman1 says:

    Public debt ballooned during the last Budget of the Bush regime.

  3. Iamthe50percent says:

    That’s the effect of TARP transferring private debts from the banks to the public.

    And is is, indeed, a very good visualization.

  4. sellstop says:

    Of course. We, the U.S. bailed out our banks. We put the private debt on the public ledger.
    Don’t worry. We are working on that little problem. We are the worlds reserve currency. (So far)
    And that has been our downfall in this mercantilist world…..

    In biblical times there was a provision for a debt jubilee. A time when debts were forgiven. This could occur every 25 to 50 years. In my humble opinion it was an acknowledgment of the power of money to make money. And early recognition of the tendency of capitalism to concentrate money. “It takes money to make money”.

    Nowadays, since we are not a religious society, and neither am I, our democratic system will still, through the social tendencies of people to adopt what works, engage in a forgiveness of debts. Even if we have to make up some legal reason that fits in with our “modern” mindset. So we put up with the Federal Reserve system and Mr. Bernanke who will despite our puritan impulses( that are only superficial) enable us to inflate our way out of our debts. And we will have the upper hand if we choose to do so since we own the reserve currency of the world!

    Does anyone have any doubts that a government “of the people and by the people” will not in the final analysis inflate their currency in order to minimize the debts they have incurred as the result of the mercantilist manipulations of the centrally controlled economies of the rest of the world??

    I have few doubts. We will make it look like we prefer to pay our debts in good money, but the fact remains that we all rejoice as our assets are inflated by the debasement of our currency.

    And don’t think that I do not approve. We have been schmucks. To put it mildly. To have the power of the reserve currency was wonderful as we needed to import our energy from the rest of the world. But it led to the hollowing out of our manufacturing base with the financialization of the world and with the emergence of the emerging market central banks who did not shrink from the task of a manipulation of their own currency.

    But we have Bernanke and we will in the end best them at their own game through necessity.
    gh

  5. Chad says:

    Nice chart. My only issue is that the X and Y axes are not proportional.

    Based on this chart, you would have to say that paying for a useless war and subsidizing your rich people (US) is more expensive than national healthcare and a ridiculous socialized system (France).

  6. marsilk says:

    This chart is nice, but still somewhat confusing. I am grateful for putting it in terms of percentages of GDP, but there still seems to be some sort of heteroscedasticity problem (big economy, big percentages of both private and public debt, small economy, small percentages of both private and public debt). It’s hard to believe Switzerland is worse off than Mexico in terms of indebtedness, yet that is the impression you get from the graph. Would it be possible to do some sort of non-capital public spending debt (i.e., debt for transfer payments) vs. assets, or some other revision, to try to resolve this? It may be that Switzerland gets the money because it has a well-developed and internationally recognized banking system, and then loans the money out and this is what is recognized as debt. I grant that it is also possible that the Swiss have borrowed more than the Mexicans, and the impression of Swiss thrift is misleading. But it’s hard to tell.