According to The Economist Intelligence Unit the current global public debt stands at more than $40 trillion; that’s a tad over $6,000 for every child, woman, and man on the planet. Ten years ago the total public debt was a mere $18 trillion.
The magazine keeps a running total going of the increase in public debt on a website, although it cautions its totals are “not perfectly accurate.” However, even acknowledging the number may be off by a million or even a billion or two, it is still a staggeringly large amount of money.
Trying to Visualize a Trillion Dollars
Numbers measured in trillions are utterly meaningless to the average person. One trillion is 1 plus 12 zeros - $1,000,000,000,000.
Pagetutor.com has created some visual aids to help put these large numbers into perspective and posted the result on YouTube .
It points out that “A packet of one hundred $100 bills is less than half an inch thick and contains $10,000. Fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.” A million dollars in the same bank notes would fit into a grocery bag.
A hundred million would fill a standard skid up to about waist height, and a billion would need ten skids.
But a trillion? This is where it’s necessary to get into the good old football field analogy. One trillion dollars, in hundred dollar bills, stacked waist-high on standard pallets would cover two football fields. That’s Canadian football fields, not those tiny U.S. ones.
Government Debt is not evenly Shared
Writing in the Globe and Mail (“Global Public Debt: $40,660,121,927,289 (U.S.),” November 19, 2010) Richard Blackwell points out that Japan is “The most heavily indebted country in the world.” The country owes more than $10 trillion, or a bit more than $84,000 per capita. The United States comes next, but is catching up fast, with an indebtedness of $9.2 trillion ($29,730 per head). On a per capita basis, Canada outdoes the United States with a public debt of $37,121 per person for a total government debt of $1.26 trillion.
Ireland, the latest European country to fall into the financial glue has a per capita debt ($35,165) that is lower than Canada’s. While Greece, the poster child for horrible government finances, has racked up indebtedness of $33,582 for each of its citizens.
(Already, within 24 hours of Blackwell’s article being written, the Economist’s Debt Clock has added more than $7 billion to global government debt.)
Is Massive Government Debt a Problem?
The Economist asks the important question, does it matter that government finances are so far in arrears? “After all,” adds the magazine, “world governments owe the money to their own citizens, not to the Martians.”
The answer is that it is a problem because government debt has been rising, and continues to rise, faster than economic growth and that “implies more state interference in the economy and higher taxes in the future.”
If the debt gets to an unmanageable height, as it is doing in some countries, a fiscal crisis ensues. Governments such as Mexico, Argentina, and Russia have defaulted on their debt obligations in the past couple of decades.
What follows such defaults is not pretty. Factories close, jobs are lost, social services collapse, and, sometimes, civil unrest destroys democracies and ushers in dictators who promise simple solutions.
Rupert Taylor - Rupert Taylor is the editor of a magazine that provides background to current events.
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