(Note: Here is Part 2 last month, about High interest payment/GDP ratio)
My sister's auditing firm, Alas, Oplas and Co. CPAs-RSM maintains a good business and finance blog. A good entry last week was the budget balance for many rich and emerging economies in four continents -- Europe, North and South America, and Asia. It seems that instead of "budget balance", budget deficit (revenue < expenditures) has been the rule while a balanced budget or budget surplus (revenue > expenditures) are just exemptions to the rule. Here are the numbers.
Budget Balance in 2010:
Ukraine -10.6, Britain -10.1,
Greece -9.8, Spain -9.1,
Latvia -8.5, Lithuania -8.2, Slovakia -8.2
France -7.8, Portugal -7.5, Iceland -7.5, Poland -7.5,
Netherlands -5.6, Slovenia -5.6, Italy -5.1, Czech Rep. -5.1,
Belgium -4.8, Russia -4.6, Austria -4.5,
Denmark -3.9, Hungary -3.9, Turkey -3.6, Finland -3.1, Germany -3.0
Luxembourg -2.4, Estonia -1.5, Switzerland -1.3, Switzerland -0.3,
B. America, North and South
US -8.9, Venezuela -5.7
Canada -4.0, Colombia -3.6
Mexico -2.6, Brazil -2.3, Peru -1.3
Argentina +0.5, Chile +0.2
Japan -7.5, Pakistan -6.3
Vietnam -5.9, Malaysia -5.6, India -5.1
China -2.2, S. Korea -2.0, Taiwan -1.8
Indonesia -0.8, Singapore -0.7, Thailand -0.2,
Hong Kong +2.9
New Zealand -5.5, Australia -2.7
Primary data source: The Economist, February 10th 2011.
Fiscal irresponsibility by so many governments around the world, from the rich countries to the middle-income to poor countries, is indeed the trend and the rule. Governments that live beyond their means, governments that spend and spend, tax and tax, borrow and borrow to plug the annual deficit and accumulating ever-rising public debt, which requires ever-rising interest payment, which bloats the public debt further.
Limited and minimal government is still far out. Politicians, technocrats, bureaucracies at the local and national governments, bureaucracies at the foreign aid establishment, and even civil society leaders, are too addicted with more government spending and more borrowings. They are spending not their own money but taxpayers', especially those from the private sector.
They spend and spend, tax and tax, and are not around anymore when the future generation of taxpayers would shoulder the burden of past irresponsibilities.