The global debt problem

There is a widespread global debt problem which was inevitable after paper money had been introduced. Almost every country in the world is in debt.

Global debt

Debt is a fascinating concept as governments need money in order to run countries. It’s an obvious fact that running a country costs a lot of money. Governments obtain money from the people they govern. Governments are not profitable entities, nor do they own profitable businesses or any other ways of earning money. This money is assigned as taxes, and it is the obligation of the citizen of a country to pay their taxes in order to provide their government with enough funds to run the country.

Essentially, the government uses these funds (taxes) to run the country. They should spend all tax money on the country, but governments often surpass the amount of these funds. Government expenditure is similar to the spending of people because it usually exceeds their financial means. Governments printed more money and referred to this money as debt to justify the spending of more money. They use this money to pay for everything that taxes would have paid for. This money though is debt.

Spending money that does not belong to the government is a widespread global economic problem. Global debt has increased so much and is now more than one hundred trillion dollars which is growing at an increasing rate every day.

This massive debt has placed the global world economy on the edge of disaster. The tiniest movement could cause a huge change, something that Italy has experienced. Italy was a pillar of the European economy and became a beggar state due to an increase in the interest rates by only two per cent. If interest rates change drastically, entire countries could go bankrupt. This system is essentially faulty as it involves the attribution of monetary value where there is no value.

Money has a much greater value than the paper it is printed on, and from the time it became cheap to make money, governments have been spending a lot more than they actually had.

No one knows the consequences of this, but when the balance changes, natural order will resume suddenly in an aggressive way.

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