Well, I can't imagine why, can you?:
Global debt levels continue to rise, and that could mean trouble for economies and financial markets, according to a new report from McKinsey.
"Could".... <chuckle>
From 2007 through the second quarter of 2014, global debt grew by $57 trillion, raising the global debt-to-GDP ratio by seventeen percentage points to 286%, the study says. [emphases added]
Put another way, the entirety of human civilization would have to do nothing put pay down debt for three years - no "luxury items," no transportation, no medicine/health care, not food, no nothing - for three years without interruption to get out from under that insane debt burden. The ultimate (to date) "mindless austerity". Care to speculate on how politically popular that would be? Human civilization would up in this predicament in the first place, didn't it?
"This is not as much as the 23-point increase in the seven years before the crisis, but it is enough to raise fresh concerns," the report states.
Do tell, Babaluga.
Governments in advanced economies have borrowed heavily to fund bailouts and boost demand. Private sector debt also has climbed rapidly in many countries.
Wasted their capital ("seed corn") on futile statist macroeconomic gimmickry instead of taking their "medicine," enduring the economic dislocations necessary to get public debt back under control, shrinking the size of their public sectors, and putting in place free-market economic policies ("supply side") that are the only genuine means of "boosting demand".
As a POTUS whose birthday we celebrated last week once said, "Government is not the solution to the problem; government is the problem".
"Absent additional steps and new approaches, business leaders should expect that debt will be a drag on GDP growth and continue to create volatility and fragility in financial markets," the study notes.
Do you want "new" approaches or do you want approaches that actually work? Because those wouldn't be "new". Similarly, do you want an accurate diagnosis of the "patient"? Because that would entail coming to grips with the fact that there isn't any GDP growth, there's GDP shrinkage (another reason the debt-to-GDP ratio keeps spiraling upward), and that might, must might, explain why there's so much "volatility and fragility" in financial markets. To the degree that that those "markets" are actually allowed to function, since downward adjustments are part of the equation.
"Policy makers will need to consider a full range of responses to reduce debt as well as innovations to make debt less risky and make the impact of future crises less catastrophic."
Want to make public debt "less risky"? Stop running up so damned much of it, and stop impeding the "advanced" economies from functioning with so damned much government. That'd be a good start.
The increasing global debt "slows the recovery, raises the risk of new crises and it limits the ability to respond to them. While significant deleveraging may prove elusive for many countries, effectively managing the growth of debt — and reducing it where necessary — is an imperative." [emphases added]
"Reducing debt where necessary"? It's necessary everywhere, Skeeziks.
To reiterate: There ain't no such thing as a free lunch. Nothing can be done with wealth before it is first created. What "advanced" economies have done is crushed their wealth-creators, squandered their existed wealth, destroyed their currencies, all the while deceiving their citizenries into believing that all was well, everything is fine, and it's "prosperous" business as usual. A malicious fantasy world that can only end one way....
....except when this implosion happens, nobody will be "clear".
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