fancythat
MaizieD As Dinahmo's figures show, states can manage perfectly well when running deficits.
I would like to return to this.
And this that I said
*Italy and Greece - well known countries for running into huge financial difficulties.
US - its national debt is now nearly the same percentage to GDP as it was in the 2nd world war years. Anyone fancy having the same national debt as the US? No, I thought not.*
That is the danger of debt.
Governments are not immune.
And QE does not always help either. Else no country would run into financial trouble.
Which ever way anything is sliced and diced, debt can lead to danger. Sometimes.
Countries and local authorities[I read that about 8 more besides Birmingham, are in financail difficulties], and households and individuals, are not immune.
After the end of the Napoleonic Wars the UK's debt ratio was 200% GDP. As I mentioned above it was around 30% at the beginning of the 20thC.
You ask who would like to live with the same national debt as the US. After the end of WW2, in 1946 it was 106%. The UK's at the end ofWW2 was around 200%.
Both countries recovered from that high level to much more manageable figures and did so during earlier centuries.
The US and UK govts during the last 3 centuries were immune to debt. Despite 3 centuries with very expensive wars the UK and the USA have survived and are amongst the richest in the world.
Local authorities are a different case - they have suffered from the lack of govt contributions, especially during the last 13 years of Tory austerity. Covid and the Ukraine war has played a part in this too, but we are now over the covid period. In an ideal world, the Ukraine war end and that would result in a reduction of spending on armaments and other aid. Monies that could be diverted to investment in the country's economy.