Two thousand sixty-six years ago, a learned man who lived in Rome wrote these words:
“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and con trolled, and the assistance to foreign lands should be curtailed lest (we) become bankrupt. People must again learn to work, instead of living on public assist ance.” – Cicero 55 BC
As an expansive world empire, Rome was vast as it was powerful. It began its existence as a small town on the Italian Peninsula in about 625 BC and by about 260 BC they controlled all of it. The earliest point at which everyone would agree on the Romans possessing an empire would be after their victory in the second Punic war in 201 BC. As for the fall, the date traditionally used for this is the ousting of the last emperor, Romulus Augustus, in AD 476. Decadence, military problems, imperial incompetence, economic decline, and most of all – monetary trouble, all contributed to the Fall of Rome.
So, what has humankind learned? Evidently, nothing …
THE VERDICT IS OUT
The Organisation for Economic Co-operation and Development (OECD) – to which New Zealand is a member and benchmarks (or compares) many of its national performance indicators, dates its origins to 1961.
That was a time when 18 European countries plus the United States and Canada joined forces to create an organisation dedicated to global development. Today, its 34 member countries span the globe, from North and South America to Europe and the Asia-Pacific region. They include many of the world’s most ad vanced countries but also emerging countries like Mexico, Chile and Turkey. The OECD also work closely with emerging giants like China, India and Brazil and developing economies in Africa, Asia, Latin America and the Caribbean.
Current OECD Membership ______________________________________________________________
Source: OECD Website
Stronger. Cleaner. Fairer. A more secure world?
Hmmm … but under which benchmarks? Alright then. Let’s try Cicero’s.
LEST (WE) BECOME BANKRUPT
The map displayed below shows historical data and forecast of general govern ment gross debt (as percent of GDP) in each country. Government debt (also known as public debt, national debt, sovereign debt) is money (or credit) owed by a central government to creditors within the country (domestic, or internal debt) as well as to international creditors (foreign, or external debt).
General Government Debt as Percent of GDP by Country
Gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of SDRs (Special Drawing Rights), cur rency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable.
As the colour chart on the map above suggests, the darker a country’s colour is, the more it is literally in the ‘red‘ in sofar as how much it owes others.
Based on the map above, which country today owes the most amount relative to its GDP as compared to all others in the world? The answer is: the United States of America at 84.26%. Worse still, that percentage is projected to exceed 100% by as early as 2015!
Towards the end of May 2011, America’s grand total of debt owed to foreign entities has reached a stag gering US$ 4.514-trillion! Is that number big? Well, let’s see. A trillion is defined as being the number 10 followed by 12 zeros and is expressed as an order of magnitude being 1012. The truth is, it’s not a very big number at all. It’s a humongous number! Humongous as in huge, … enormous!
Now, why is that scary if not in fact frightening? Read on.