can you look into the numbers of whats left of crude oil and as to how long until there would be any oil left at the pumps if we ran out of discovered oil pockets
When you follow a lorry that is carrying bales of hay, it leaves a trail of bits of hay behind it. How far would the lorry have to drive before all the hay had gone?
It seem like many look at debt as a bad thing but I look at it for what it really represents: Promises. When you go into debt, you make a promise to repay that promise in a certain amount of time. People are willing to lend you money if you are worthy of repaying that debt. This promise shows the trustworthiness of the borrower (in this case, the country) and is somewhat a measure of their past values, virtues and performance as well as their future potential based on their ability to make and keep promises. In my travels around the world, I have seen problems in developing nations in that there is a very low level of trust of its people to borrow and repay debts. On a national level, these same countries are corrupt and cannot be trusted by other countries. The local people cannot make and keep business deals and the country cannot keep their international promises either. It seem to me that trustworthiness in one of the key components to wealth creation. Other key components are: the rule of law, justice and generosity. Sometimes, giving a little more than you have to goes a long way towards trustworthiness.
I still believe it’s Japan on top. Especially after spending billions on the olympics only for it be ruined by the pandemic. They’re probably one of the most unlucky country in recent history.
National debt factually can NOT be paid off, ever, as long as fiat currency is around. Fiat currency is generated by offering interest on an account that has nothing in it (very broadly generalising). So, if you offer and pay interest on created national debt while you have nothing in your account, then you have to create more debt to pay the interest. That means, once you have paid off all of the base debt, there will be the compounded interest left over as debt, which in turn will generate more debt. So no, national debt can never be paid off, except by a currency reset, where effectively everyone who still owns money is disowned of that money. Thus, it is best to do such a thing directly after a war when as many people as possible have as little as possible to loose, except the clothes on their backs, and the belongings they carry with them. Cruel, yes; calluous, yes; but very efficient. Not nice, definitely not. But a very efficient way of resetting a currency's debt to zero. Because in such situations people care more about their bare survival than their luxury swimming pool not being paid off.
@@RustyDust101 dafuq are you saying? Many countries at many times in history have paid all their debt and even had reserves. It's rare because government would rather spend money instead of saving but don't come up with BS about being impossible.
There is a lot to do with WW2, most of the countries with big debts are the one that needed the biggest rebuilds after the war. Just look at Japan, Germany, Italy
Bruno Danese Also Japan has a problem with the youth generation and thus the working force. The elder plot vs youngsters there is crazy, a lot, and I mean, A LOT of old people.
Germany's current debt has little to do with rebuilding after WW2. It skyrocketed only after the Reunification with East Germany. However the debt is steadily sinking because Germany has been running massive surpluses for the past 4 years and Germany is on a course to reach the Maastricht criterion of debt-to-GDP-ratio of under 60% by 2019.
Big thing missing on all of this is the unfunded or off-balance sheet liabilities which includes all of the promises to pay (i.e social securities, unfunded medical costs, etc.). Adding all these will truly show how indebted a country is.
Can you look at the "overall" tax level? I realise this will vary depending on your income, financial situation etc but what is it approximately when we actually spend our money compared to what earned after income tax, NI, VAT etc.
Short answer - fractional reserve lending and the history of banking. I wondered about this myself for a long time. Feel free to look it up (wikipedia explains it pretty well) or take a macroeconomics course. Everyone paying everyone back would totally work if that's how the money was "loaned" in the first place... but it wasn't.
in the UK around 50% of gdp is taken in Tax. He said tax is about 80% of gdp in UK so... I would estimate it would take about 1year and 7month (50% paid 1st year, final 30% would take about 7month)
IIRC its common in greece to dodge taxes though. Heard something like 40%. Not a reliable source obviously but that kind of thing should be taken into account.
That is why, normally, the banks look at the ability to pay those debts off. Unfortunately, that is not happening in the US, because they worked out ways to offset the costs on investors, by selling off a bunch of bad dirivatives.
Matt, Shouldn't you have seen how quickly a population grows to get a running total of a per-capita rate to rank countries? This would change where quickly growing populations ranked. Also to compare countries you could see how much debt each country owes the other to balance the books and just be left with how much each country owes individuals in things like US Social Security.
Two of those nations, Greece and Italy, are in that situation because they can't issue their own currency. India, the US and Japan CAN issue their own currency, and if this is done carefully, inflation will not take too big a toll.
Well, at the moment, the US IS issuing massive amounts of money, but that money is going directly into the banks to prop them up.And they are using this to loan back to the US, and also to buy up loans, stocks, dirivatives, commodities and resources, which is inflating the prices of those things, causing the consumer prices of them to rise without any compensatory increase in personal income for the poor and middle class.
The problem is actually much worse. A significant part of the GDP is generated by borrowing money. If the government starts paying it off, assuming the private sector does not borrow more to compensate, the GDP shrinks. The same thing happens to a lesser extent if you just stop growing the overall debt, and keep it steady at something like 150% of GDP. The debt must grow forever, and it must grow faster than the GDP. This will clearly not end well.
While MaruluExploit was wrong with his statement, he was close. Almost all (90% ish) of Japan's debt is domestically owned. Some of this is via pension programs, and other social systems (governmentally owned debt), some of it is owed to Japanese Bond holders (principally Japanese citizens), some of it is owned by large Japanese banks. But very little of it is owned by exterior sources. This is one of the reasons why Japan has been able to manage their credit rating so well.
Am I the only one who' s strangely proud of seeing his country in this video? I knew we had a debt problem, but I wouldn't have suspected that, depending on the measurement, we would end up in the same scale of Japan and the US. Greetings from Italy =D
Of course now if you look at external debt, a country like the UK is in far greater debt than a country like the US. The US calculates all it's debt. So included in the 19 trillion national debt, is all foreign owned debt as well as all domestic owed debt. However the UK does not publish all its debt normally like the US does. Its national debt only accounts for domestic debt owed. But it does not account for external debt. When the last official figure for the UK was published back in 2014, the national debt was at 2.3 trillion US dollars. However in 2014 they also included the external debt in that figure like the US always does. When they did, the UK total owed debt was 9.5 trillion dollars. So the US debt was calculated at the time as being 104% of GDP. Today it's about 104 ~ 106% even 2 years later. But in 2014 the total debt owed by the UK was at an astounding 506% of GDP. Hopefully now that it's been 2 years, the external debt of the UK for 2016 will be published sometime around the 1st quarter of 2017. The external debt seems to be released only once every two years from the UK from what I can find. However the US government and the stock market here publishes it all the time. However an official published figure is only released every 2 years or so. Even though you can see approximately where it is quarter by quarter for the most part.
The total debt figures are often not that meaningful though. The U.K., especially the City of London, has both large international liabilities and large international assets, so looking only at the debt can be misleading. It is true that the U.K. is still a net debtor, but only by about 14% of GDP (compared to 570% of GDP considering debt alone). It can be even more distorted for countries like Luxembourg, which has an external debt to GDP ratio of over 3400% but is actually a net creditor (36% GDP). Similarly, in the case of the United States, the total external debt (public and private) is 114% of GDP, but the net international investment position is only 42% of GDP, far more manageable.
The measurement of how quick a country could pay off its debt with tax money doesn't really make sense. If you spent all your tax money on repaying debts, your economy would suffer heavily which would reduce your tax income. Furthermore, this measurement favors economies with high taxes and high government spending. If Sweden spent more of its tax income on debt repayment and less on social security, education and so on it would end up in the same position as the US if it just raised taxes to repay debts. The per head measurement doesn't help either since prices differ from country to country. If you think about it, national debt isn't a problem in itself. The problem is that the tax income is lower than the government spending over an extended period of time. So I'd recommend looking at the rate in which the debt is rising instead of the overall sum.
+Alex Bermann if government spending affects your economy, you dont really have an economy do you? the role of government has nothing, or rather, should have nothing to do with economy. thats the reason we have all this debt, idiot governments think they can fiat their way into prosperity but in reality you are robbing peter to pay paul.
bovinespongiformflu You oversee various factors here. On the base line: the economy will easily suffer when noone enforces the law, keeps streets intact or fight fires before they become unstoppable. Furthermore, if you don't create access to quality education for the majority of the population, you're wasting an important resource: human potential. Furthermore, let's look at this idiot governments: they rule the world. There is no successful government who doesn't "rob peter to pay paul". There is no zone on this planet which has a thriving economy without such a government (except the tax haven parasites which don't produce any value themselves and would be useless when there weren't actual taxed economies.)
Similarly, the ratio of public debt to GDP does not imply that the country ought to spend its entire product on paying down its debt until it's wiped out (as if that were even possible).
But he clearly said that there were valid reasons that a government would not want to pay off its debt at all costs and said he was "putting the economics of the matter to the side". So you're arguing against something that he already conceded
Ability to payoff debt is also important. Greece has no capacity to repay it's current debt and its creditors will eventually have to be write a lot of it off.Japan if it it decided to fix it's banking system could. The US state of Louisiana has been unable to borrow money from the London banking market for over a century after defaulting on loans and refusal to negotiate any repayment at all.
Yes, private savings in Japan was among the highest in the world for the longest time. But as the population has aged and a new generation has started entering the workforce, the savings rate in Japan has dropped. There is an extreme generational gap in savings. And given that the older generation will start burning through their savings on Eng of Life costs, expect to see their total net of debt per person to increase dramatically over the next decade or two.
Yeah. Paying back you debt just by using taxes is not the what you want to do. The debts usually have a very set time table and you don't pay it accordingly you can (and will be) punished. This includes trying to pay the debt earlier than it's due. The way you want to pay back the debts is that pay it according to the schedule while maintaining your economy otherwise. And the whole amount you have to pay is all dependable on the interest rates (which is also dependable on the country's credit grading). And if you credit grading is bad it makes paying off the debt very expensive (and also very time consuming). So for one, I think that when thinking on how soon a country can pay off its debt you should also take into account its international credit grading. There are some other factions too. For instant in case of Greece (who has a very poor credit grading) they now pay back their debts by taking a low interest loan from Germany. Basically Germany (and other EU too) pays the debts of Greece transforming its debt from a high interest debts to a lower one which it can easier later pay as scheduled. And clearly paying off the debt like this takes decades so there is no possible way a Greece could pay off its debt in just 2 years. It's not even possible if they really wanted to, because even then they have to obey their paying schedule.
Of course what really matters is not how much debt you have - or even how much you have compared to what a country earns (it's GDP). What matters is whether you can convince your creditors that you will be able to pay them back. That in turn usually depends upon whether your creditors think other creditors will be willing to lend you money in the future that you can then use to pay off your old debts. This continues in a cycle but at the end of that cycle is a simple question: if I give you money will I get it back with the amount of interest I want? Answering that question is quite simple - because as long as an economy keeps growing faster than the debt increases through interest then it should all be fine. And we even have a quick way that we can estimate how well a country can pay off its debt - it's called a credit rating.
+Christopher Valkoinen Yes, it doesn't matter how large GDP you have. Different countries have different taxes but also different mandatory expenses. It doesn't even matter if the economy grows, Japan's GDP is around the same since the 90s (fluctuating wildly but not showing obvious growth like before) and yet it is a very good (stable A+) debtor. The real measurment is: how much do you pay compared to how much can you afford to pay? And that's really, really tricky to answer.
why not? Never heard of money printing? Abenomics is just a short-term solution, when they stop the currency will become stronger. However, if they wanted to stay low, they could just print money when abenomics ended. Easily as that, and they could use some of it to pay off their debts and return to a healthy current account surplus.
japan is in this really weird hyper-inflation state. they have a massive debt but their economy is so strong and they make so much money that it doesn't effect them that badly.
Thing about Japan though is that it owes all that money to itself, i.e. it's own citizens. It doesn't really owe that much to foreign banks etc. Which is why they are not too stressed about it and the Yen doesn't fall through the floor.
To be fair the phrase "If *country* wanted to pay off their dept" is kinda wrong. Almost implies (now watching in 2017) that the country didnt want to pay off the dept. the reality is that lot of countries were forced in dept and have no chance escaping anymore. Sad but true. Do your best out there people, try not to owe anyone and dont bother with these matters. they are beyond our reach
Yes, that was rather an oversimplification on my part. The broader point is that Americas debt is more troublesome because they don't have these sorts of policy options available. They are locked into pursuing a strong dollar strategy.
It's because of the way the Japanese market works. I'm not an expert, but I know that there are a lot of firms, companies and even a well-known mafia that have monopolies on various things. I've heard horror stories of people in Japan owing money to a company/mafia because of their inheritance (e.g. a familymember dies and their debt gets carried over to you). One way these companies and mafiosos hold their monopoly is by keeping their people and various undercompanies in debt.
You're missing the big twist on Japan's situation. 96% of its debt is held internally AND the Japanese public and private institutions have a combined 16 trillion US dollars in assets. One Japanese economist even joked that the Japanese people are actually creditors (which is technically true) only that the debtor is their high roller gov. Even if they write down the whole debt and the yen goes down to a third of its current value it's not gonna be the end of the world (on the contrary, tons of people want to see the yen back pre-Plaza agreement. A nightmare to America.)
It's all well to calculate how long it takes for a country to clear it's debts given the tax take. The problem is high taxation countries usually have to spend more on welfare and hence cannot use a large chunk of tax for tax repayment. It is a flawed measure.
I wonder if Matt took into account the interest rates. There are WASTLY different interest rates being paid by different countries and that is perhaps what matters most. Interests can make total repayment literally impossible. If a country can pay back 115% of the amount borrowed and pays an interest rate of 10%, then it is a way less bad debt than that of a country that can pay back 115% but pays an interest rate of 20%. In the scenario proposed in the video interest is of little importance since the accrued interest is negligible, but in real life accrued interest often ends up being a large sum than the principal amount. Michael from Vsauuce would have taken that into account! :D
I'd say that that's true as there are an effectively unlimited number of chess games. For example, with a four move loop you never hit stalemate and could repeat the sequence anywhere from once to an infinite number of times resulting in an infinite number of chess games from just this one loop. Not all of them are sensible, but that wasn't one of the parameters. On the other hand, there is a finite amount of matter-energy in the universe and thus a finite, though very large, number of atoms.
Still a bad comparison. What we should be looking for is how crippling that debt is to each country. Taking into account that Japan, for example, has a massive proportion of it's debt invested on research, development and production, which favors it's GDP... while south american and african countries use that money mainly to support their decadent populations and have their governments steal a big chunk just for the lolz. The equation should let the most corrupt and/or economically disabled on top. Leaving Japan, UK, US, etc. at the bottom of the list. Zimbabwe, Venezuela, Argentina, Russia are amongst the worst going, as it shows on their standart of life.
jesusthroughmary So, I'm sure like him, you don't know every place within your country much less the world. The local name of St. Christopher's island is just weird to me, St. Kitts? Where did they get that from!
jesusthroughmary Would that even be part of the curriculum in Britain? I'm sure learning the 50 states of the USA is mandatory in the States, I mean they may as well teach and memorize all the UN members in all countries, but that isn't even a thing in the U.S. I should know I went to school there.
Just a thought if every other country has debts to other countries? Won't that make that if everyone paid his debts, nobody would have debts left? And nobody would be short on money? I do assume countries like Japan have lend more money from other countries than they have given to loan... but how would the balance be, if you'd make a report on 'extra debt' which I define by 'Money you took from other countries - money you gave to other countries'?
they owe money that doesn't exist because of the interest on the loans. if you take a loan of 10$ at 10% interest than you owe 11$. that dollar doesn't exist and you end up with everyone owing everyone.
Japan. Land of the rising sum?
+Mick Thomas Somebody get this person some internet award!
I just, this deserves to be in the World Joke Book (if here is one).
"could you maybe call us something else?"
"like what?"
"HOW ABOUT SUMRISE LAND?"
[AX]Oblivion Guard there*
That was good
This is the first non-horrifying video about national debt.
Only because you're not from Japan.
wait... the B&W slideshow shows that US has 16 trillion FACTORIAL (notice the exclamation mark) dollars dept... that's a few dollars
+Niklas Halonen nerds be like... xp
I'm one of them btw, i'm not being mean :)
well the factorial isn't defined for negative functions.
Alwin Priven
Though the gamma function is.
yea, but it's symbol is Г(x)
@@lokegustafsson247 gamma is defined for real strictly positive values, so anything above 0
land of the rising debt
lol
can you look into the numbers of whats left of crude oil and as to how long until there would be any oil left at the pumps if we ran out of discovered oil pockets
TH-cam: shows thumbnail with Matt Parker.
Me: tripping over my feet in my rush to watch the video.
Love this video! It's not just about seeing the meaning in the numbers, but seeing the nuances.
When you follow a lorry that is carrying bales of hay, it leaves a trail of bits of hay behind it. How far would the lorry have to drive before all the hay had gone?
Nathan Lucas that's actually a good question
It'd have to go one hay-ll of a distance!
It seem like many look at debt as a bad thing but I look at it for what it really represents: Promises. When you go into debt, you make a promise to repay that promise in a certain amount of time. People are willing to lend you money if you are worthy of repaying that debt. This promise shows the trustworthiness of the borrower (in this case, the country) and is somewhat a measure of their past values, virtues and performance as well as their future potential based on their ability to make and keep promises.
In my travels around the world, I have seen problems in developing nations in that there is a very low level of trust of its people to borrow and repay debts. On a national level, these same countries are corrupt and cannot be trusted by other countries. The local people cannot make and keep business deals and the country cannot keep their international promises either. It seem to me that trustworthiness in one of the key components to wealth creation. Other key components are: the rule of law, justice and generosity. Sometimes, giving a little more than you have to goes a long way towards trustworthiness.
Loved the video!
Nice! Good news to Portugal! We are not so bad after all!!!
It would be interesting to see an updated version.
I still believe it’s Japan on top. Especially after spending billions on the olympics only for it be ruined by the pandemic. They’re probably one of the most unlucky country in recent history.
Paying off debt is a bit of a moot point because national debt doesnt function like other forms of debt and is almost never paid off
+SimplyMyAccount Exactly, it will never be paid off because it doesn't need to be paid off.
TheSuperCommentGuy
But, you do want an eye on it at all times.
Ty Wood But countries do pay interest on that debt, so it does matter a lot.
National debt factually can NOT be paid off, ever, as long as fiat currency is around.
Fiat currency is generated by offering interest on an account that has nothing in it (very broadly generalising).
So, if you offer and pay interest on created national debt while you have nothing in your account, then you have to create more debt to pay the interest.
That means, once you have paid off all of the base debt, there will be the compounded interest left over as debt, which in turn will generate more debt.
So no, national debt can never be paid off, except by a currency reset, where effectively everyone who still owns money is disowned of that money.
Thus, it is best to do such a thing directly after a war when as many people as possible have as little as possible to loose, except the clothes on their backs, and the belongings they carry with them.
Cruel, yes; calluous, yes; but very efficient.
Not nice, definitely not. But a very efficient way of resetting a currency's debt to zero.
Because in such situations people care more about their bare survival than their luxury swimming pool not being paid off.
@@RustyDust101 dafuq are you saying? Many countries at many times in history have paid all their debt and even had reserves. It's rare because government would rather spend money instead of saving but don't come up with BS about being impossible.
Wow that's interesting very. Great job presenting that issue
This was really good :)
There is a lot to do with WW2, most of the countries with big debts are the one that needed the biggest rebuilds after the war.
Just look at Japan, Germany, Italy
Bruno Danese Also Japan has a problem with the youth generation and thus the working force. The elder plot vs youngsters there is crazy, a lot, and I mean, A LOT of old people.
Bruno Danese not true, Russia has one of the lowest debt in the world
Germany's current debt has little to do with rebuilding after WW2. It skyrocketed only after the Reunification with East Germany. However the debt is steadily sinking because Germany has been running massive surpluses for the past 4 years and Germany is on a course to reach the Maastricht criterion of debt-to-GDP-ratio of under 60% by 2019.
Big thing missing on all of this is the unfunded or off-balance sheet liabilities which includes all of the promises to pay (i.e social securities, unfunded medical costs, etc.). Adding all these will truly show how indebted a country is.
Hey, what about the 1:4:9 ratio of the TMA-1 (from the 2001 novel). What connections or calculations can you make from this??
Can you look at the "overall" tax level? I realise this will vary depending on your income, financial situation etc but what is it approximately when we actually spend our money compared to what earned after income tax, NI, VAT etc.
Short answer - fractional reserve lending and the history of banking. I wondered about this myself for a long time. Feel free to look it up (wikipedia explains it pretty well) or take a macroeconomics course. Everyone paying everyone back would totally work if that's how the money was "loaned" in the first place... but it wasn't.
Run the numbers for offshore windmills including their DC connection to the AC power grid.
What a great conclusion sentence :D
so, on the flip side, what is the most economically stable country? and what is the most economically stable first world country?
germany, since they are the only one who don't run a deficit.
in the UK around 50% of gdp is taken in Tax. He said tax is about 80% of gdp in UK so... I would estimate it would take about 1year and 7month (50% paid 1st year, final 30% would take about 7month)
IIRC its common in greece to dodge taxes though. Heard something like 40%. Not a reliable source obviously but that kind of thing should be taken into account.
damn that short system! i was so confused by those large numbers...trillions
2:14 Uh-oh, we really didn't need that factorial sign...
I really expected Bulgaria somewhere along the lines :D
That is why, normally, the banks look at the ability to pay those debts off. Unfortunately, that is not happening in the US, because they worked out ways to offset the costs on investors, by selling off a bunch of bad dirivatives.
Matt, Shouldn't you have seen how quickly a population grows to get a running total of a per-capita rate to rank countries? This would change where quickly growing populations ranked. Also to compare countries you could see how much debt each country owes the other to balance the books and just be left with how much each country owes individuals in things like US Social Security.
can't listen to this guy while watching to that fascinating drawing... that's why i watch Number Hub twice every time :D
I was expecting to see Portugal in the list!
Two of those nations, Greece and Italy, are in that situation because they can't issue their own currency. India, the US and Japan CAN issue their own currency, and if this is done carefully, inflation will not take too big a toll.
Well, at the moment, the US IS issuing massive amounts of money, but that money is going directly into the banks to prop them up.And they are using this to loan back to the US, and also to buy up loans, stocks, dirivatives, commodities and resources, which is inflating the prices of those things, causing the consumer prices of them to rise without any compensatory increase in personal income for the poor and middle class.
I was expecting a video on county debt within the U.K.
The problem is actually much worse. A significant part of the GDP is generated by borrowing money. If the government starts paying it off, assuming the private sector does not borrow more to compensate, the GDP shrinks. The same thing happens to a lesser extent if you just stop growing the overall debt, and keep it steady at something like 150% of GDP. The debt must grow forever, and it must grow faster than the GDP. This will clearly not end well.
While MaruluExploit was wrong with his statement, he was close. Almost all (90% ish) of Japan's debt is domestically owned. Some of this is via pension programs, and other social systems (governmentally owned debt), some of it is owed to Japanese Bond holders (principally Japanese citizens), some of it is owned by large Japanese banks. But very little of it is owned by exterior sources. This is one of the reasons why Japan has been able to manage their credit rating so well.
Am I the only one who' s strangely proud of seeing his country in this video?
I knew we had a debt problem, but I wouldn't have suspected that, depending on the measurement, we would end up in the same scale of Japan and the US.
Greetings from Italy =D
still he could of be like "hey Australia's fine but because you guys are awesome"
I was expecting Brazil!!
Of course now if you look at external debt, a country like the UK is in far greater debt than a country like the US. The US calculates all it's debt. So included in the 19 trillion national debt, is all foreign owned debt as well as all domestic owed debt.
However the UK does not publish all its debt normally like the US does. Its national debt only accounts for domestic debt owed. But it does not account for external debt. When the last official figure for the UK was published back in 2014, the national debt was at 2.3 trillion US dollars. However in 2014 they also included the external debt in that figure like the US always does. When they did, the UK total owed debt was 9.5 trillion dollars. So the US debt was calculated at the time as being 104% of GDP. Today it's about 104 ~ 106% even 2 years later. But in 2014 the total debt owed by the UK was at an astounding 506% of GDP.
Hopefully now that it's been 2 years, the external debt of the UK for 2016 will be published sometime around the 1st quarter of 2017. The external debt seems to be released only once every two years from the UK from what I can find. However the US government and the stock market here publishes it all the time. However an official published figure is only released every 2 years or so. Even though you can see approximately where it is quarter by quarter for the most part.
The total debt figures are often not that meaningful though. The U.K., especially the City of London, has both large international liabilities and large international assets, so looking only at the debt can be misleading. It is true that the U.K. is still a net debtor, but only by about 14% of GDP (compared to 570% of GDP considering debt alone). It can be even more distorted for countries like Luxembourg, which has an external debt to GDP ratio of over 3400% but is actually a net creditor (36% GDP).
Similarly, in the case of the United States, the total external debt (public and private) is 114% of GDP, but the net international investment position is only 42% of GDP, far more manageable.
.
The measurement of how quick a country could pay off its debt with tax money doesn't really make sense. If you spent all your tax money on repaying debts, your economy would suffer heavily which would reduce your tax income. Furthermore, this measurement favors economies with high taxes and high government spending. If Sweden spent more of its tax income on debt repayment and less on social security, education and so on it would end up in the same position as the US if it just raised taxes to repay debts.
The per head measurement doesn't help either since prices differ from country to country.
If you think about it, national debt isn't a problem in itself. The problem is that the tax income is lower than the government spending over an extended period of time. So I'd recommend looking at the rate in which the debt is rising instead of the overall sum.
+Alex Bermann if government spending affects your economy, you dont really have an economy do you? the role of government has nothing, or rather, should have nothing to do with economy. thats the reason we have all this debt, idiot governments think they can fiat their way into prosperity but in reality you are robbing peter to pay paul.
bovinespongiformflu You oversee various factors here. On the base line: the economy will easily suffer when noone enforces the law, keeps streets intact or fight fires before they become unstoppable. Furthermore, if you don't create access to quality education for the majority of the population, you're wasting an important resource: human potential.
Furthermore, let's look at this idiot governments: they rule the world. There is no successful government who doesn't "rob peter to pay paul". There is no zone on this planet which has a thriving economy without such a government (except the tax haven parasites which don't produce any value themselves and would be useless when there weren't actual taxed economies.)
+bovinespongiformflu except there wouldn't be a market economy without the government.
Similarly, the ratio of public debt to GDP does not imply that the country ought to spend its entire product on paying down its debt until it's wiped out (as if that were even possible).
But he clearly said that there were valid reasons that a government would not want to pay off its debt at all costs and said he was "putting the economics of the matter to the side". So you're arguing against something that he already conceded
Ability to payoff debt is also important. Greece has no capacity to repay it's current debt and its creditors will eventually have to be write a lot of it off.Japan if it it decided to fix it's banking system could. The US state of Louisiana has been unable to borrow money from the London banking market for over a century after defaulting on loans and refusal to negotiate any repayment at all.
Yes, private savings in Japan was among the highest in the world for the longest time. But as the population has aged and a new generation has started entering the workforce, the savings rate in Japan has dropped. There is an extreme generational gap in savings. And given that the older generation will start burning through their savings on Eng of Life costs, expect to see their total net of debt per person to increase dramatically over the next decade or two.
Yeah. Paying back you debt just by using taxes is not the what you want to do. The debts usually have a very set time table and you don't pay it accordingly you can (and will be) punished. This includes trying to pay the debt earlier than it's due. The way you want to pay back the debts is that pay it according to the schedule while maintaining your economy otherwise. And the whole amount you have to pay is all dependable on the interest rates (which is also dependable on the country's credit grading). And if you credit grading is bad it makes paying off the debt very expensive (and also very time consuming). So for one, I think that when thinking on how soon a country can pay off its debt you should also take into account its international credit grading.
There are some other factions too. For instant in case of Greece (who has a very poor credit grading) they now pay back their debts by taking a low interest loan from Germany. Basically Germany (and other EU too) pays the debts of Greece transforming its debt from a high interest debts to a lower one which it can easier later pay as scheduled. And clearly paying off the debt like this takes decades so there is no possible way a Greece could pay off its debt in just 2 years. It's not even possible if they really wanted to, because even then they have to obey their paying schedule.
I don't remember. Was this made before or after Greece defaulted?
How long would it take the UK to clear its debt
Of course what really matters is not how much debt you have - or even how much you have compared to what a country earns (it's GDP). What matters is whether you can convince your creditors that you will be able to pay them back. That in turn usually depends upon whether your creditors think other creditors will be willing to lend you money in the future that you can then use to pay off your old debts. This continues in a cycle but at the end of that cycle is a simple question: if I give you money will I get it back with the amount of interest I want? Answering that question is quite simple - because as long as an economy keeps growing faster than the debt increases through interest then it should all be fine. And we even have a quick way that we can estimate how well a country can pay off its debt - it's called a credit rating.
+Christopher Valkoinen Yes, it doesn't matter how large GDP you have. Different countries have different taxes but also different mandatory expenses. It doesn't even matter if the economy grows, Japan's GDP is around the same since the 90s (fluctuating wildly but not showing obvious growth like before) and yet it is a very good (stable A+) debtor. The real measurment is: how much do you pay compared to how much can you afford to pay? And that's really, really tricky to answer.
+Christopher Valkoinen credit rating = number of missile bombs and uav hunter killer drones.
I was watching him draw the illustrations and was not paying attention to what he said for like the first half of the video
pretty much
why not? Never heard of money printing? Abenomics is just a short-term solution, when they stop the currency will become stronger. However, if they wanted to stay low, they could just print money when abenomics ended. Easily as that, and they could use some of it to pay off their debts and return to a healthy current account surplus.
Ooooh, Matt from Numberphile!
japan is in this really weird hyper-inflation state. they have a massive debt but their economy is so strong and they make so much money that it doesn't effect them that badly.
But the title asks which county has the biggest debt problem, not which country
St. Kitts (Ki As in I Kill or Kit) and Nevis (Ne is in Kneel) (vis as in Visceral)
Another thing to consider is that there are other countries that owe to them...
I think you should have looked at what the debts were over a period of find do you can see a trend...
Thing about Japan though is that it owes all that money to itself, i.e. it's own citizens. It doesn't really owe that much to foreign banks etc. Which is why they are not too stressed about it and the Yen doesn't fall through the floor.
where would Canada sit in these competitions and what is there national debt?
To be fair the phrase "If *country* wanted to pay off their dept" is kinda wrong.
Almost implies (now watching in 2017) that the country didnt want to pay off the dept.
the reality is that lot of countries were forced in dept and have no chance escaping anymore.
Sad but true.
Do your best out there people, try not to owe anyone and dont bother with these matters. they are beyond our reach
I see want you did there at the end. Hahaha
Trick question. All intergenerational debt is equally immoral.
By that logic future generations shouldn't be able to use public universities, roads, emergency services...
You see how dumb that idea is?
can you explain this?i'm curious to know..
Yes, that was rather an oversimplification on my part.
The broader point is that Americas debt is more troublesome because they don't have these sorts of policy options available.
They are locked into pursuing a strong dollar strategy.
It's because of the way the Japanese market works. I'm not an expert, but I know that there are a lot of firms, companies and even a well-known mafia that have monopolies on various things. I've heard horror stories of people in Japan owing money to a company/mafia because of their inheritance (e.g. a familymember dies and their debt gets carried over to you). One way these companies and mafiosos hold their monopoly is by keeping their people and various undercompanies in debt.
Dumfries and Galloway I think?!
So who has the best debt clearance period?
You're missing the big twist on Japan's situation. 96% of its debt is held internally AND the Japanese public and private institutions have a combined 16 trillion US dollars in assets. One Japanese economist even joked that the Japanese people are actually creditors (which is technically true) only that the debtor is their high roller gov. Even if they write down the whole debt and the yen goes down to a third of its current value it's not gonna be the end of the world (on the contrary, tons of people want to see the yen back pre-Plaza agreement. A nightmare to America.)
It's all well to calculate how long it takes for a country to clear it's debts given the tax take. The problem is high taxation countries usually have to spend more on welfare and hence cannot use a large chunk of tax for tax repayment. It is a flawed measure.
where do these countries get their loans?
Isn't this Headsqweeze??
I see Numberphile now :P
I wonder if Matt took into account the interest rates.
There are WASTLY different interest rates being paid by different countries and that is perhaps what matters most.
Interests can make total repayment literally impossible.
If a country can pay back 115% of the amount borrowed and pays an interest rate of 10%, then it is a way less bad debt than that of a country that can pay back 115% but pays an interest rate of 20%.
In the scenario proposed in the video interest is of little importance since the accrued interest is negligible, but in real life accrued interest often ends up being a large sum than the principal amount. Michael from Vsauuce would have taken that into account! :D
Japan's debt though is almost all internal (ie to it own people).
May I ask who's illustrating?? Is it Matt?
I'd say that that's true as there are an effectively unlimited number of chess games. For example, with a four move loop you never hit stalemate and could repeat the sequence anywhere from once to an infinite number of times resulting in an infinite number of chess games from just this one loop. Not all of them are sensible, but that wasn't one of the parameters.
On the other hand, there is a finite amount of matter-energy in the universe and thus a finite, though very large, number of atoms.
You have no clue about chess, there is a 3 move repetition rule and a 50 move rule that prevents infinite games. They cannot happen at all.
He says counties in the title but he’s talking about countries
Still a bad comparison. What we should be looking for is how crippling that debt is to each country. Taking into account that Japan, for example, has a massive proportion of it's debt invested on research, development and production, which favors it's GDP... while south american and african countries use that money mainly to support their decadent populations and have their governments steal a big chunk just for the lolz. The equation should let the most corrupt and/or economically disabled on top. Leaving Japan, UK, US, etc. at the bottom of the list.
Zimbabwe, Venezuela, Argentina, Russia are amongst the worst going, as it shows on their standart of life.
This guy is Norman Gunston's younger brother.
Switzerland, Sweden, Germany are probably on top list.
why do you want to clear the debt?
"If there were no debts in our money system, there wouldn't be any money." - Marriner
Eccies
St. Kitts & Nevis is one of the 16 Commonwealth Realms! I'm an American and even I know that.
Damn it! His a mathematician, not a geographer!
sion8 But he's a subject of the Crown first.
jesusthroughmary
So, I'm sure like him, you don't know every place within your country much less the world. The local name of St. Christopher's island is just weird to me, St. Kitts? Where did they get that from!
sion8 Come on, he had to learn the names of the Commonwealth Realms at some point.
jesusthroughmary
Would that even be part of the curriculum in Britain? I'm sure learning the 50 states of the USA is mandatory in the States, I mean they may as well teach and memorize all the UN members in all countries, but that isn't even a thing in the U.S. I should know I went to school there.
Who has the least?
He did say putting the economics aside...
And that's numberwang!
Argentina: hold my beer
Just a thought
if every other country has debts to other countries? Won't that make that if everyone paid his debts, nobody would have debts left? And nobody would be short on money?
I do assume countries like Japan have lend more money from other countries than they have given to loan... but how would the balance be, if you'd make a report on 'extra debt' which I define by 'Money you took from other countries - money you gave to other countries'?
Canada paid all its debt in moose and beaver pelts as well as maple syrup subsidies. It is now debt free, therefor did not make the list.
Belgium O.o god damnd
The future. A debt is a promise to repay in the future.
Japan could clear its debts almost instantly by simply devaluing its currency so it's not exactly comparable.
So would I be right in thinking Japan has a lot of debt?
Japan has a very large domestic debt
Now do one who has the least amount of debt!
The title is wrong, it says county instead of country.
they owe money that doesn't exist because of the interest on the loans. if you take a loan of 10$ at 10% interest than you owe 11$. that dollar doesn't exist and you end up with everyone owing everyone.
The english Jason Segel.
How can all (Most) of the worlds countries be in dept??
Where has all of our money gone?
The tax is interesting but you have to pay for hospitals and other things with tax
Question: I have been hearing this for a while. Is it true that there are more possible chess games than there are atoms in the observable universe?
Australia's debt is tiny in comparison to these countries, so it doesn't even deserve a mention. Our politicians love to make it a big issue though :P