The link you presented only refers to external debt, ie money borrowed from abroad.UWSaint wrote:Per wrote:
We're the ones who do the Keynes thingy according to the book... even if Sweden happens to have a conservative PM leading a centre-right coalition government at the moment.
(On the US)
The problem is that some countries, like Greece and the USA, entered the recession already having deficits. Thus they end up choosing between plague and cholera.
Yes, Per, I am sure the numbers will back up your analysis....
I've never really understood why some think external debt is more interesting than total public debt.
If I'm in debt I still owe the same amount of money whether I borrowed it from my Nephew or from the bank.
I guess the reasoning goes a bit like if the US government mainly owes money to US citizens, it's OK, because technically they could default on that money with impunity by making laws that render the people that lent them the money without means to ever claim it.....
To me that just sounds insane, immoral and plain crazy. Debts should be honoured and paid back whether it is domestic or foreign, and therefor the total public debt is more interesting than external debt imho. And then it looks like this:
https://www.cia.gov/library/publication ... 6rank.html
In this chart you can see that the public debt in Greece was 144% of GDP, in the USA it was 59.8 and for Sweden 40.8.
The Economist has a presentation with fresher data which can be seen here: http://www.economist.com/blogs/dailycha ... debt-guide
If you scroll to the table at the bottom you see that the countries with the worst debt problems according to their ranking would be
3 Great Britain
And of the countries that they compared, the one with the least debt problems are Sweden, Finland and Switzerland.
But really, the US debt problems aren't impossible to handle. It's just that congress for short sighted political purposes refuses to take a serious grip on it. The left wing democrats oppose all cuts and the tea-baggers among the republicans refuse to accept any raised taxes. Thus the stalemate and loss of trust in the US's ability to live up to its obligations, leading to a lower market rating. The lower rating is really not based on solid economic data but on political risk. The market does not have full faith in congress doing what is necessary to keep the US solvent.
And the Bush tax cuts were absurd. Thanks to them the richest group in the US have a lower tax rate than the middle class.
Now, I understand the reasoning behind a flat tax and I understand the reasoning behind a progressive tax system (the more you earn, the higher the tax rate) but I simply fail to understand how anyone can defend a regressive tax system, ie the richer you are, the less you pay... It just doesn't seem reasonable. Just take away all the lope holes and deductions catering to special interests and replace it with a flat tax rate across the board. Let the rich pay the same rate as the average Joe. Sounds fair to me. And it would help alleviate the debt problem.