By way of comparison, you may wish to look at CMA DataVision's rankings of sovereign credit default risk from the first quarter of this year, which I rendered here.
Norway still looks good!
One thing that's different, and isn't shown here, is the additional component of private debt. Unlike government borrowing, private loans are usually expected to be paid-off, so the cost of debt servicing for the private individual is much higher. And if a lot of this debt is tied up in property that is gradually reducing in value, so that the debt may eventually outweigh the asset, the consumer-voter will be building up a head of resentful steam. Then there is the debt accumulated by companies and the financial sector. It all adds up: the graph below (from this site) compares the US and UK economies in terms of the total burden of debt-to-GDP:
Another difference is that the crisis is now global. The US and the UK are in serious difficulty, but so are many European countries and the European banking system that has tried to hold them up; and the increasingly productive East has become dependent on the profligate West.
Historically, says Schama, the pre-Revolutionary French government would partially default on its borrowing (e.g. the 1720s, and in 1770), as well as raise more taxes and find more lenders. Now, we seem to be trying hard to avoid default (perhaps because once it started in one place, there'd be so many following suit); taxation of various kinds is already taking well over 40% of our income, in return for a creaking system of benefits and services; and where are the lenders who will take on so much global debt? And if they do, at what price?
Yet international finance is so murky, anything could happen. Towards the end of Andrew Rawnsley's book on New Labour, "The End of the Party", he says (pp. 626-7) that at last year's G20 summit "it was reliably estimated that more than $10 trillion of private wealth was concealed in paradis fiscaux [tax havens]". I don't think it's all invested in BP shares. Maybe it's waiting for governments to come to heel; to co-operate with each other in some glum global deflation that will further enrich the "oofy", as P.G. Wodehouse would term them.
In a splendidly furious recent rant, American writer Joe Bageant said:
"If we decide to believe the money economy still exists, and that debt is indeed wealth, then we damned sure know where to go looking for the wealth. Globally, forty percent of it is in the paws of the wealthiest one percent. Nearly all of that one percent are connected to the largest and richest corporations. Just before the economy blew out, these elites held slightly less than $80 trillion. After the blowout/bailout, their combined investment wealth was estimated at a little over $83 trillion. To give some idea, this is four years of the gross output of all the human beings on earth. It is only logical that these elites say the only way to revive the economy, which to them consists entirely of the money economy, is to continue to borrow money from them."
Or as humorist J. B. Morton (aka the Daily Express' "Beachcomber") put it in his “A Dictionary For Today”, long ago:
“WORLD-PEACE: A state of affairs which would make it possible for the international moneylenders to get even more power than they possess at present.”
It's there to be taken from us: for except among the very poorest, there is so much wealth we still have, such a high standard of living. In the early 80s, businessmen strode into our insurance office with mobile phones the size of bricks tucked proudly under their arms; now, the primary-age children of the underclass have iPhones that my fingers are too fat to operate.
Underneath the polemic of many of the doomsters who now write on the Internet is, I think, a hope that in some way disaster or revolution will save us, because they cannot see us deliberately planning and achieving a better state of affairs. I think this is a dangerous line for the imagination to take: we might find we'd burned what we thought was the Phoenix, but were unable to resurrect it.
But change of some kind is certainly on the way, and in the course of it we must remember to hold onto the things that really matter, especially civil liberties and the democratic form of government. Perhaps the biggest mistake is for us to think that money is the main issue.
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