We’ve got soil, and it’s all red

Debt: it’s on everyone’s mind right now, from the micro to macro level. I stumbled upon another excellent graphic by visualeconomics today, depicting national debt by country (as I’m sure you have seen from my posts – and performance in my economics courses in college – I can’t help but be a macro person).

A few initial observations:

Those countries “in the red” include some of the richest and some of the poorest countries in the world, GDP-wise.  But if we take a look at those countries that are resource rich (for example, Brazil, Russia, China, Chile, many southern African nations), we note that most of them are not very economically bad off at all.  In fact, most are growing.  India, for example, posted annualized GDP growth yesterday of nearly 9% through the quarter that ended on June 30th.  Australia posted 3%.

This then brings us to the US and Canada.  We are some of the most resource-rich of the debt-laden westernized countries, and yet we have some of the highest percentage of debt per GDP.  We are some of the only countries rich in resources, technology and talent that are seeing our economies continue to deflate.  Infrastructure is strong and political corruption is low.  Aren’t these typically the ingredients for success?  To me, the fact that we possess such abundant natural resources makes the current situation even more dire.  A country of this much natural wealth should not have to find itself in this position.

According to Mercer’s annual Quality of Living survey, none of these “in the black” countries even make it to the top 50 cities, whereas heavily indebted Italy, Spain, USA, and Portugal are all over the map.  Has our pursuit of life, liberty, happiness, and pensions, and quality health care, and more modes of transport, and disease eradication, and food and shelter for all, and support for poor countries, and military dominance, and debt forgiveness, and (you fill in the blank) eventually led us to a state where we can no longer live free and happy, as we are now ultimately bound by the gaping hole in our national checkbook?

A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury. – Alexander Tytler

Will the older generations of these countries, who enjoyed so many amenities that their countries could simply not pay for, look back in retirement and wish that they had not chosen the path that they did?  And more importantly, do the ideals that I currently stand for have the potential to inhibit the freedom and options of the generations that will come after me?

We must all live so that our children do not have to pay for our deeds. – Andrejs Upits