Canada's Housing Bubble

Nov 15, 2010 Mish globaleconomicanalysis.blogspot.com

The Economist has an interesting Global Debt Clock that inquiring minds may be interested in.

From The Economist ...

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 shows the global figure for all (or 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 the Greek government did in early 2010, and the country can be plunged into imminent crisis. So the higher the global government debt total, the greater the risk of fiscal crisis, and the bigger the economic impact such crises will have.

Debt Comparison





The map consists of government debt, not all debt. It does not include future liabilities such as Social Security and Medicare.

Note that by this comparison Japan is the mother of all basket cases and Australia is better than all of the above.

Addendum:

Jose writes ...

I am confused with the Global Debt Clock, as reflected on your article from The Economist. I have copy of an article from The Washington Post, dated several months ago, reflecting Government debt in percentage of nominal gross domestic product. The table was reproduced from Organization for Economic Cooperation and Development, the comparison is as follows:

Country... Economist... OECD
Canada .... 82.3% ...... 82.8%
UK ............ 76.0% ...... 71.0%
Australia.... 22.3% ..... 15.9%
Greece .... 129.4% .... 114.9%
Japan ...... 196.6% .... 189.3%
US............. 62.3% ...... 83.9%

The US at 84% is what I remember as well. Note that only the US is far different in that table. If 84%+- is accurate, this Canada and the US are approximately equal in percentage terms. I will see if I can get an answer from the Economist.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com