Debt

Wanna know how much is the US Government spending right now? Or how fast US debt growths? You should add US.Debt.Clock.org on your favourite websites.

This study is realized by Ludger Schuknecht, economist at the European Central Bank. He is making the case for the return to healthy and sustainable public finances. In that perspective, the authors identifies four central issues.

First, deficits and debts must be returned to a sustainable path. In many countries, deficits will need to fall by one percentage point of GDP per year and in some by much more. Even then, a balanced budget would only be reached in about 2015 for the average of the euro area and even later in the U.K.

A new historical database on debt and banking crisis is showing that we might be in a trivial, rather than exceptional economic situation regarding government debt. Kenneth Rogoff and Carmen Reinhart, the authors of the database and the connected study are showing that over the longer sweep of history governments regularly resorted to defaulting or at least restructuring their “uncomfortable” government debt. After the Great Depression, over 40% of the countries did so, and after the 1980-82 recession, 30% of the countries did it.