www.bbc.co.uk/news/business-15748696I wanted to come back to this because I think it will help to understand the debt situation: though the difficulty of getting hard information should not be underestimated.
In the picture the arrows only refer to the banks: they show what the banks owe to governments and private debtors. So it is not possible to separate out private debt from government debt (that is public debt) even if you forget about the transfer from private to public when the banks were bailed out. The picture does not include non-bank debt either. This picture is about June 2011.
If you look at the USA the legend states:
Overall debt for the US is 10.9 trillion
GDP is 10.8 trillion
Government debt is said to be 100% of GDP
Foreign debt is noted as 101% of GDP
If you add up all the arrows shown US banks owe a total of 2,694.9 billion to the banks of the countries shown in the circle.
| country | Owes (billions) | Is Owed (billions) |
|---|
| UK | 578.6 | 834.5 |
| Germany | 174.4 | 414.5 |
| Japan | 244.8 | 835.2 |
| Spain | 49.6 | 170.5 |
| France | 202.1 | 440.2 |
| Portugal | 3.9 | - |
| Italy | 34.8 | - |
| Ireland | 39.8 | - |
| Greece | 6.2 | - |
| total | 1334.2 | 2694.9 |
The banks of the countries shown in the circle owe US banks 1334.2 billion
So the net debt of the US banks to those countries' banks is 1360.7 billion. As noted, that is both private and government debt
If the total US foreign debt is 10.9 trillion (101% of GDP) where is the rest of it? We are not told and neither are we able to say what proportion of this is government debt.
I have not been able to find figures for the same period nor figures calculated on the same basis. So it is not easy to calculate those figures. But Wiki gives a starting point. You hit the first hurdle when you compare the figures given for overall debt because the wiki number is not the same as the number in the first picture. Per wiki the total figure of US debt in Feb 2011 is 14.2 trillion. However that includes intragovernment debt and that is debt owed by the government to itself. If that is left out the figure at Feb 2011 is said to be 9.6 trillion: given the debt is growing it may be that by June that would rise to the 10.9 trillion given in the other data set: I do not know. They are close enough for my purpose I think
Accepting that is true for now the total foreign holdings of US treasury securities is given as 4439.6 billion and those are held by a variety of countries, per the list.
As I understand it all sovereign debt is in the form of government bonds (that might not be right) and so that should be the total of the government debt to foreign lenders. That seems to be broadly confirmed by the Wiki article because it says that the debt can be divided into marketable and non marketable securities. Marketable securities are bonds and notes and stuff which are held by investors at home and abroad and they can be bought and sold: non marketable ones are the intragovernmental debt which are debts for social security and medicaid and stuff like that. Again the numbers don't quite match up and wiki puts the marketable securites at 9 trillion, not at 10.9 as the first link states. I do not know how the discrepancy arises.
Of the total foreign debt in the first picture (10.9 trillion) it seems that only 4.4 trillion is sovereign. The rest must be private, I think. And this is why I am not happy to lump it together in this way: it does not seem to have very much to do with the public, and everything to do with private investors of whatever sort.
The level of government debt is further complicated by the fact that some items are "off balance sheet". We saw the effect of that with the Goldman Sachs super wheeze for Greece: but for different reasons there are a lot of obligations which arguably increase the debt in much the same way (even if for different reasons). That would probably include liabilities arising from government guarantees of junk mortgages and bank deposits. But such liabilities arise from the reckless decisions of private finance. They may well be in the realm of socialised losses because of the political decisions government takes. Iceland shows they do not need to be and so when I am trying to get a handle on what this debt is all about I do not think I need to include such obligations to get at the origins: only the outcomes, if we continue on the present incomprehensible course. So in line with how the government reports this debt I have chosen to leave out those potential liabilities: but the money paid out to actually support the banks and mutuals and whoever else has been bailed out is included: and so too is the "stimulus spending" I think.
Wiki also argues that there are enormous liabilities which should be added because of a shortfall in money for social security: but as shown in another thread that does not seem to be true so I am ignoring it
http://en.wikipedia.org/wiki/United_States...nership_of_debtIf this is correct then the true foreign debt owed by the US is 4439.6 billion as wiki says. But the private sector owes the balance of foreign debt and that is 10.9 trillion - 4.439 trillion = 6.461 trillion. So what I am wondering is why are we bothered about sovereign debt as an international problem? So far as I can tell the USA is indebted to the tune of 100% of GDP: which is far above the fetish figure of 60% bandied about (and included in the EU rules set at Maastricht). The US also has a big budget deficit. And I am left with a big "so what".
The answer is in the interest rates charged for servicing the debt: just as it is in Italy. And those are said to be an inevitable consequence of the risk attaching to such high levels of debt. But if the private sector is as indebted as this appears to show it is curious that the same does not apply to them. And that is what is puzzling me. If the interest charged to governments is high because of the risk: then why is the same not true for the private sector? Yet interest rates for them are at an all time low. The government in this country says that this is essential because everybody has a mortgage: well everybody has a government too and that government is supposed to do one of two things: act in the best interests of all the people: or, if you are a neocon, act like a business. Not all countries have control of their currency: but the US does. When it advanced all that money to "stimulate the economy" and to "bail out the banks" what interest did it charge those banks and financial institutions? They seem to have used the money they got to lend to various governments at very high rates: was that true in reverse? I honestly don't know.
