The subject of countries' debts came up over coffee at work today and it seems I'm not the only one who thought the US held all the markers. Only one guy didn't and he reckoned the US owed massive sums to China. That seems to be backed up by the internet - not a source I tend to rely on but quick and easy to use for idle curiosity. After the US it becomes more confusing with differing views as to whether China has debts of its own but on balance I'd say it probably does. But then who does China owe money to?
My head hurts!
Monday, 25 July 2011
Saturday, 23 July 2011
Where did all the money go?
I'm back on my soapbox. Something I can't ignore - the world economy! I'm sticking my neck out here. There were four divisions for maths in my school I was in the lowest until they decided to create a fifth, lower, division for just me and one other girl, so I'm really talking about something I'm not really qualified to talk about and don't understand. So when has that ever stopped me I hear a few voices say! So here goes, and can someone please set me right?
The UK has massive loans that cost us vast sums of money in interest. Greece is in financial crisis, Spain and Italy are not far behind. It seems every country has borrowing and they are all in trouble to some extent or another.
I've always rather assumed the US held most of the markers; a big, powerful country, but it seems not. Looking at the news tonight I find the US is also on the verge of not being able to cover it's debts.
So where has all the money gone? If the biggest, richest and most powerful of us is in trouble then it seems to me there must a round robin of money.
It's rather disconcerting to say the least. Personally I can't see the sense in borrowing money simply because governments don't want to be seen to raise taxes. How does it help? After all, it's got to be repaid at some stage and in the meantime even more money has to be found to paid the interest which makes the situation even worse.
Lets assume I'm right and we do have a round robin of money. If Peter owes Paul £10, Paul owes Patrick £15 and Patrick owes Peter £20 why not just cancel some of the debts out? Peter, Paul and Patrick all waive the requirement for £10 of the debts due them. This would mean Peter owes nothing, Paul owes £5 and Patrick owes £10. Peter's free and clear and Paul and Patrick have their interest repayments reduced.
Wouldn't it be in everybody's interests? Some would get their money back and others would reduce their borrowing and hence their repayments?
All corrections and explanations will be gratefully received.
The UK has massive loans that cost us vast sums of money in interest. Greece is in financial crisis, Spain and Italy are not far behind. It seems every country has borrowing and they are all in trouble to some extent or another.
I've always rather assumed the US held most of the markers; a big, powerful country, but it seems not. Looking at the news tonight I find the US is also on the verge of not being able to cover it's debts.
So where has all the money gone? If the biggest, richest and most powerful of us is in trouble then it seems to me there must a round robin of money.
It's rather disconcerting to say the least. Personally I can't see the sense in borrowing money simply because governments don't want to be seen to raise taxes. How does it help? After all, it's got to be repaid at some stage and in the meantime even more money has to be found to paid the interest which makes the situation even worse.
Lets assume I'm right and we do have a round robin of money. If Peter owes Paul £10, Paul owes Patrick £15 and Patrick owes Peter £20 why not just cancel some of the debts out? Peter, Paul and Patrick all waive the requirement for £10 of the debts due them. This would mean Peter owes nothing, Paul owes £5 and Patrick owes £10. Peter's free and clear and Paul and Patrick have their interest repayments reduced.
Wouldn't it be in everybody's interests? Some would get their money back and others would reduce their borrowing and hence their repayments?
All corrections and explanations will be gratefully received.
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