Debt Crisis Central: Let’s Not Forget About America

| |

burning dollar dollar photo club

As the situation in Puerto Rico has recently revealed, Greece is not alone. The world is filled with debt laden nations, many of which may never be able to pay down their liabilities. All told, the world is $200 trillion in debt, of which $57 trillion was accumulated in the past 8 years. And for the record, all the wealth in the world, including assets, amounts to $241 trillion (as of 2013). It’s safe to say that the human race is on one massive debt bender, and there won’t be any easy way out.

As for which countries are worse off than others, a recent article from The Guardian happens to reveal which of the world’s nations are on the fast track to a debt crisis. As I read it however, there was a country that was suspiciously missing from the list. Can you spot this missing debt junky? (hint: it’s America. The answer is always America.)

New analysis by the Jubilee Debt Campaign reveals that Greece’s plight is far from unique: more than 20 other countries are also wrestling with their own debt crises. Many more, from Senegal to Laos, lie in a debt danger zone, where an economic downturn or a sudden jump in interest rates on world debt markets could lead to disaster…

…Jubilee’s analysis defines countries as at high risk of a government debt crisis if they have net debt higher than 30% of GDP, a current-account deficit of over 5% of GDP and future debt repayments worth more than 10% of government revenue. “We estimate that 14 countries are rapidly heading towards new government debt crises, based on their large external debts, large and persistent current account deficits, and high projected future government debt payments,” it says…

Countries at high risk of government external debt crisis

■ Bhutan

■ Cape Verde

■ Dominica

■ Ethiopia

■ Ghana

■ Laos

■ Mauritania

■ Mongolia

■ Mozambique

■ Samoa

■ Sao Tome e Principe

■ Senegal

■ Tanzania

■ Uganda

Countries currently in government external debt crisis

■ Armenia

■ Belize

■ Costa Rica

■ Croatia

■ Cyprus

■ Dominican Republic

■ El Salvador

■ The Gambia

■ Greece

■ Grenada

■ Ireland

■ Jamaica

■ Lebanon

■ Macedonia

■ Marshall Islands

■ Montenegro

■ Portugal

■ Spain

■ Sri Lanka

■ St Vincent and the Grenadines

■ Tunisia

■ Ukraine

■ Sudan

■ Zimbabwe

And yet, the United States gets a pass. How on Earth did that happen? Currently it’s estimated that the US has the same debt to GDP ratio that it had during the middle of World War Two. Not to mention that our unfunded liabilities rest at around $127 trillion and rising.

There’s no way that we will ever pay that off, which means that the United States, while perhaps not in the same boat as Greece, is definitely in the same fleet. Our debt to GDP ratio may not be the worst, but that debt is larger than any other in human history. And unlike Greece, our economy is more connected and codependent on the global economy than any other. Once we go down, we’re taking the whole world down with us.

You’d think we’d be worth mentioning, but I guess our debt is a hard pill to swallow.

Delivered by The Daily Sheeple

We encourage you to share and republish our reports, analyses, breaking news and videos (Click for details).


Contributed by Joshua Krause of The Daily Sheeple.

Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger .

Wake The Flock Up! Please Share With Sheeple Far & Wide:
  • Nathan Togain

    And this ship is sinking VERY soon.

  • Dearest sky is falling editor; how bout you chat about the CAFR account and how it can EASILY ‘pay’ off the so called debt? ehhh??

    • jim_robert

      Dear Head-in-the-Sand Farley: Thanks so much for letting us know we can borrow even more. Y’know, I have a mortgage for $8 million dollars, and I work at Wal-Mart for $10 and hour. HOWEVER, I **do** have a thousand bucks squirreled away for emergencies – should also be listed in your CAFR website – so everything will be just fine. Right?

  • tom

    As a Britisher, it looks to me as if austerity has set in in a big way throughout the USA. It just isn’t called “austerity”. And it is somewhat concealed by the antics of the super-rich, the posturing of Hollywood and TV, and of course the military-industrial-congressional-security spree that spends $1 trillion or more every year.

    Mind you, Greece is still spending inexplicably high sums on “defence”. If it took a holiday from defence spending for a couple of years, it could probably solve its financial problems.

    • It isn’t austerity, it is authentic poverty settling in for a long stay.

      • tom

        My point was that it’s not CALLED austerity. It’s a kind of “creeping under-the-radar” austerity, because the establishment cannot admit that the USA needs an austerity program. (Although it is at least as broke as Greece). But all the features of austerity are there. Workers’ pay down – check. Massive unemployment – check. Pensions being cut, and possibly vanishing in a puff of smoke a little down the road – check. Hundreds of billions being transferred to the pockets of rich swindlers – check.

        • You have a totally different definition of austerity than any economist has ever voiced. Austerity is a deliberate, planned reduction in one’s standard of living. None of the failures that you consider features of austerity are either deliberate or planned, they are all consequential and unanticipated.

          • Doral Hemm

            They (the features that Tom pointed out) are all planned and executed by the central banks. Central banking is a gigantic ponzi scheme and like all ponzi schemes it will inevitably collapse. Unfortunately, when the central bankers ponzi scheme fails, the perpetrators will not be prosecuted.

          • Austerity cannot be imposed by anyone but those who will live under it without it winding up as poverty.
            I have lived under an austerity program since the mid 80’s, consisting of living in a van. I do not have features common in campers. No grid-delivered electricity, water, telecommunications, or septic system. This has been by my choice, not imposed by anyone. Government bureaucrats who have tried to improve my living standards have always run into the fact that they will have to pay for everything, including maintaining whatever they provide, and I will respond as if their every offer is an attack on my personal freedom, because they are. A large minority of Americans are about to find themselves living in similar situations by default. They will find themselves living in their cars, because there will be no other place. They will not benefit from preparing for their change in lifestyle, as I have.

          • WinstonSmithy

            Reminds me of a song by the Who called “going mobile.” “Watch the police and the tax man miss me…” https://m.youtube.com/watch?v=kxoO5yrabfc

          • That is one of several songs that I regard as theme songs. Although, the police know me very well here, and the IRS gets only what is withheld. Because I am exempt from Obamacare’s individual mandate and fines, I don’t bother to file. If they locked me up, I’d come out with a JD:-)

          • Doral Hemm

            I accept the Merriam-Webster definition of economic austerity. M-W states that it may be imposed or voluntary. I do not wish to debate the meaning of the word. The fact is that austere conditions can be imposed on an individual, or a nation or most of the world. Of course austere living for some people today would mean giving up their ten mansions and their executive jets.

          • Is that the same source you used for your specious premise that fractional reserve banking was based on the gold standard?

          • sunshine

            I wish I lived in a van, that seems so awesome. The only downside would be the inability to grow your own food and have livestock. Can I ask where you spend most of your time?

          • 40 hours at work. Asleep and not in a restaurant or the library, in the van. I live in a very agricultural area with a smidgen of energy with an oilfield surrounding a refinery, so the region is totally self-sufficient, and will probably adapt to be such in food, away from agricultural support crops.

          • sunshine

            But where do you park the van? Do cops or anyone hassle you?

          • Usually at Walmart. The only contact I’ve had with the local police was triggered by a snoopy employee of a business, because s/he said that they were concerned about the van, even though it wasn’t parked there until after they’d left for the day. It was parked across the street, behind a dually pickup that had been in the same space for a week. They were using the big picture window in their office for more than looking at the mountains… I had a very pleasant 1/2 hour conversation with the cop, “van”, who explained that they have a must respond policy with citizen calls. I don’t park across from that business anymore:-) There are a lot of places on local streets that are no where near houses or businesses, so sometimes I park closer to where I’m going in the morning.
            The police here truly serve and protect the citizenry.

          • tom

            “Austerity is a deliberate, planned reduction in one’s standard of living”.

            Actually, it is a deliberate, planned reduction in someone else’s standard of living. Austerity is imposed by governments and central banks, and those who do the imposing are not usually short of a dollar or two. Indeed, just as CxOs who lay off thousands often get big salary hikes and bonuses themselves, they may do very well out of it.

          • You don’t think that individuals are capable of planning and controlling their own economies well enough to impose austerity on themselves?
            You must know nothing but those on the dole.

  • jim_robert

    Dr. Lawrence Kotlikoff, former Treasury official under Reagan, put the unfunded liabilities figure a year or two ago at $222 trillion in the US alone (googgle Kotlikoff+unfunded liabilities, or see this one, for starters http://www.realclearpolicy.com/blog/2012/12/01/economist_laurence_kotlikoff_us_222_trillion_in_debt_363.html

  • jim_robert

    Learjet leftists, limousine liberals, rich Hollywierd hypocrites of the world, UNITE!

    The story goes Leonid Brezhnev’s aged mother came for a visit
    once when he was leading the USSR. He showed off all that he had to her – multiple sumptuous dachas, a fleet of limousines, and much wealth and possessions the average Russian could only dream about in their wildest dreams. When he was finished, and his executive retinue had left, his mother pulled him aside and whisper in his ear: “This is all very fine, but…. WHAT IF THE COMMUNISTS COME?”

    Or, as Orwell said, we’ll all be equal in the socialist workers’ paradise – only some of us will be ‘more equal’ than the others”

    Socialists won’t get any of this, of course….

  • The problem is that we are the biggest, so we’ll be among the last to fall. If you don’t have your ducks in a row before it spreads to the western hemisphere, you may as well start planning your own bankruptcy.

    • sunshine

      How do you think people should prepare for this? What do you think will occur, will people have jobs still?

      • Financially, get out of debt as much as possible, and don’t leave anything in any kind of account that isn’t designated to fund a transaction in the very near future, within days. Anyone who has a marketable skill will be able to market it in the spot cash market. I doubt that any business that operates on debt will survive the bail-ins, but there are lots of mom and pops that don’t take plastic because of the service charges, and they probably won’t notice much change if they don’t have debt to service.
        I’ve been living in a van, off of all grids, since the mid 80’s, and I highly recommend it to those who can work out the logistics. It would be very difficult for more than two with a very close and amiable relationship.
        I saw several 4 member families living in truck sleepers while I was longhaulling in the first half of the 90’s. Mom would take care of the kids and truckschool them. Dad would drive the truck and earn the money. There was no other debt to service but the truck, if that. I ran into one where both parents held CDLs and the son, who had never attended a school, was considering getting a degree in something online while driving intrastate when they were there (you have to be 21 to drive truck interstate, he was 17).

        • sunshine

          We have thought of RV living…sounds like you have it all figured out and it sounds amazing! When do you think this will happen, in a few days? What should we be looking for, as far as warning signs?

          • I’ve been waiting for over two decades, so I doubt there is any way to know exactly when it will happen. My philosophy calls for preparedness and austerity, so when it happens, it happens. I don’t think it will be catastrophic, more like a lava flow than falling over a cliff. Everything I’ve heard from those I think are most credible says to watch for trouble in this hemisphere, probably in south america, but Mexico may be too late to do anything you haven’t already. Get ready now and don’t worry about it.

          • sunshine

            What kind of trouble down there? Isn’t Argentina on the brink, and hasn’t it been, for a while? Where do you go to keep up with this kind of thing?

          • I don’t keep up with it, since it doesn’t affect me or my plans.

          • GenEarly

            IMO, we will all experience a different reality by Sept-Oct this year. Maybe not a melt down, but a definite shift in reality for everyone to what will become another “new normal”.
            The downward spiral continues. CYA.

  • Half of the OPEC countries are already refusing the dollar, so what more will it take to stop it? It doesn’t matter how many you have of what nobody is accepting.

  • The watcher

    Lunatic fringe
    We all know you’re out there
    Can you feel the resistance

  • Doral Hemm

    Whose pocket does the newly created (printed) money go to? Think about it for a couple of minutes.

  • Jonn

    Wait, I’m confused.

    Debt is defined as “Something, typically money, that is owed or due.” The article says that “All told, the world is $200 trillion in debt…”

    So…who exactly is the world in debt to? Aliens? The planet Mars?

    Then the article says that the world’s total wealth is “…$241 trillion…”

    Okay then. Check my math on this one. I might be a bit rusty. 241 minus 200 equals…41, right?

    So, if all the wealth were used to pay all the debt, the “world” would still have 41 Trillion dollars left in wealth, right?

    The reality is this, folks: It’s not paying off all the debt that’s “impossible.” It’s where that left over wealth would reside that makes it “impossible.” It would create a shift in power from those who currently have it to those who do not.

    And the ones in power don’t want that to happen.

    • Money is gold and silver.
      Currency is issued, backed by something, The Federal Reserve Note is backed by debt, self evidently because a “note” is an instrument of debt.
      When you deposit funds into a bank, that gives them the backing to issue debt several times that much, through fractional reserve banking. There is never enough currency in circulation to fund what the banks do, let alone pay the interest on what is borrowed. 70% of the Federal Reserve Notes circulate outside this country.
      There is on budget and off budget debt. On budget debt is currently budgeted and owed. Off budget debt is that to which the government has committed itself but not paid out yet. Our off budget debt is somewhere north of $200 trillion. The only place I trust with the truth is shadowstats.com

      • Doral Hemm

        Fractional reserve banking, or the gold standard, is a just a fond memory. It went down the memory hole with the introduction of privately owned central banks. Today, if you have a dollar bill in your pocket it means that you owe the central bank, though your government, one dollar plus interest.

        • Fractional reserve banking couldn’t occur if we were on a legitimate gold standard, they being polar opposites.

          • Doral Hemm

            Yes. I mistakenly wrote “or the gold standard” when I should have written “AND the gold standard”

  • The watcher
  • john ruby

    these problems are an illusion.
    the monetary amounts owed are ledger entries, that were created with a keyboard entry and can be removed just as simply, by pressing DEL.

    The solution is simple … it is not by “Bail In’s” nor by “Bail Out’s”.
    Those methods protect the money creators….
    The solution is a “Bail Down” …. put the debt down and protect the people…. “zero the debt by decree”…

    This is what the God of the Bible commands His people to do every Jubilee (7th) year.

    • Doral Hemm

      There were no unmanageable public debts before the creation and legalization of privately owned central banks.

  • Our debt? I didn’t spend that shit, not my debt.

  • Gearmoe

    As American’s we know how crap our economy is compared to yesteryear. Yet the Dollar is still the cornerstone. With this in mind this means everyone else is worse off than we are. Think about that for a couple minutes.

    • sunshine

      We might be worse off actually, in the long run. Look around you, how many Americans know anything about taking care of themselves, let alone living in a Depression type situation? I read an article by a Russian guy once, he said that when the Soviet Union collapsed, it was hard, but they were used to having nothing and hardship, so they got by. Here in the US we are so used to an overabundance and an easy life, how will people handle that kind of situation?

  • Ryan Clough

    If every dollar in existance has been lent out with intrest atteched then the debt can never be totally paid off creating a world of slaves. Welcom to reality