Debt…it’s at the heart of the global financial crisis – a story the financial media did not see coming. As we enter the second year of a stuttering global economy our analysis of financial news coverage shows media outlets are beginning to understand just how big the debt issue truly is
We start with Nassim Taleb, author of “The Black Swan” who enlightens CNBC’s Squawk Box with his grim forecast.
“Instead of the government making a smooth transition by lowering the level of debt, because really the monkey on our back is the debt. We have a huge amount of debt. Instead of the government doing that, now they're trying to look at stimulus plans and things that may inflate assets. That may run out of control.”
And it is not just the US government running huge deficits – The Financial Times interviews EU President Fredrik Reinfeldt who weighs in on the European perspective noting current spending is not sustainable.
“We are now at a stage where nearly all European economies have larger deficits than 3% as defined by european pact. And some of them have even doubled their deficits and this of course is not long term sustainable because it pushes the debt on to future generations and creates new imbalances in European economies”
The Wall Street Journal led with Asian focused analysis - pointing out the crisis was not caused by the quote “Asian savings glut” rather it was the result of lax US financial regulations, quoting a UN Trade and Development representative.
“The real difference between Asians and Americans is that American consumers borrowed heavily to finance their spending while those in Asian nations mostly didn't.”
All this while America’s borrowing binge keeps on clocking up. At the time of this report the US government debt per US citizen has passed $37,000 US dollars with an additional US funded liabilities nearing $190,000 per US citizen. (USDebtClock.org)
Do you think American’s have grown too dependent on their foreign debt? Which nations are role models when it comes to managing their money?
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