The richest countries are spending and borrowing like never before, even when things are calm.
This is only true if you take absolute numbers.
Debt rates in comparison to the countries' GDP (in real terms, not nominal terms) are stagnating or sinking in most cases. Most of the recent increase of spending/borrowing can be explained by COVID, and since then the debt rates as percentage of GDP have lowered.
Some examples (2020/2021 to 2024):
- Euro Area: 97% to 87%
- Japan: 225% to 216%
- US: 130% to 125%
- Brazil: 85% to 76%
- India: 58% to 56%
The most significant outlier is China where public debt grew, but on a very low level (20% to 26%).
(Sources:
Statista and
Ceicdata.)
I don't say that the current debt level is healthy. I'd always opt for a small but gradual debt decrease policy in "good times". But Japan shows you can live highly indebted for decades. So I don't see any collapse in the near future. It's something Bitcoiners seem to like to overdramatize to promote BTC to "fix it" (even Satoshi in some ways did that in his famous on-chain message). But I think Bitcoin doesn't need a financial collapse to thrive, it can thrive even if fiat is doing well for decades more.
Appreciate your reply, and your facts!
Debt/GDP trends from the COVID spike, some countries’ ratios have improved a bit as economies recovered. Japan, the Euro Area, even the US, ratios have pulled back from the absolute highs. Totally fair point, and thanks for the sources. (I actually checked a few of those stats after reading your post)
Debt, on its own, is not instant doom. Japan has run with crazy-high debt for decades, and the system didn’t snap. Also, if growth stays healthy and rates stay manageable, a high debt load is not necessarily explosive. My concern is more about the "next turn". If interest rates stay up, or if another big shock hits, the cost to refinance could ramp up fast. History shows that when the rate > growth math flips, that is when things can suddenly get stressful
But you nailed it: it is not all about collapse. I do not even want a collapse! I want options. My take on Bitcoin is less "end of fiat" and more about having an alternative if/when trust in government money goes sideways
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It is not designed to keep the poor poor.
It is designed to protect the rich and keep the rich rich.
The rich know that limiting the amount of people in the rich club helps the rich stay rich.
To the rich the poor are toilet paper use them and flush them down the drain when you are done with them.
People get too focused on the "poor vs poor" fight, when it is actually about gatekeeping and protecting power at the top. You can see it in how big tax loopholes never really close, or how the rules get complicated enough that only the super-rich can afford the lawyers to avoid paying what the rest of us have to
What frustrates me is how, when regular folks start to wake up or push back, the debate always gets split:
- "It is your fault for not working hard enough", or
- "It is those people over there taking your share"
Meanwhile, the really big decisions (where the real money goes) just keep happening quietly at the top
When you look at the numbers, even in these so-called "rich countries", it is always the middle class and poor who pick up the tab, either through taxes, inflation, or lost services. Therefore, people should be starting to look for alternatives, even if those are still messy (like crypto, local currencies, or just finding new ways to support each other outside the "official" system)
I cannot say it will change overnight, but at least talking about it out loud is better than just swallowing it
It's one thing for a country to have so much debt but has also leveraged that same debt for greater productivity and better services, and quite another for a country to be buried in debt but squandered the money on pointless expenses. The former is Japan. The latter is my tiny country.
Japan is one of the world's largest economies--within the top 5--with a high standard of living. My country is poor with low standard of living. Japan has efficient public services. Bridges seldom collapse but when they do, they're quickly restored to a sturdy condition that would last for decades.
Here in mine, a newly-built bridge may collapse anytime. It takes several years to build it only to see it crumble after weeks or months. The restoration will be done for several years. It will again be serviceable for weeks. Proceeds from loans and grants are either stolen by the country's officials or spent on unsustainable and hollow programs and projects like direct dole-outs and subsidies.
Who likes to pay when there's nothing in return?
A lot of us from smaller or less developed countries feel this way, and I respect how direct you are about it. Debt in itself isn't evil. If a country borrows to build good things (roads, hospitals, digital systems, schools, whatever that actually work) then maybe it is worth the risk. Japan, as you said, is a giant in the world because they turned a lot of that debt into real progress. People can actually feel the results: strong infrastructure, safe public transport, reliable healthcare, and a generally high quality of life
But when debt just disappears into pockets or is wasted on programs that do not last, it turns into a whole different story. In my own country, you pay taxes or take on debt, but get almost nothing back. Bridges collapse, the power goes out, officials get richer, but regular people just get by. That feeling (paying, but not receiving) makes people lose faith in the system. Why would anyone want to pay more tax (or tolerate more debt) if nothing gets better?