The national debt of the United States reached the $13 million mark for the first time at the end of May. The US National Debt Clock provides details, but you need to be a fast reader.
Links to other sites: US Department of the Treasury and wikipedia on the US public debt, Yahoo News
Greece’s new Prime Minister George Papandreou has promised to reduce his government’s budget deficits to below three percent by 2013 in a speech to labour and business leaders. The government deficit has grown to an estimated 12.7 percent this year, and public debt stands at €300 billion, almost 120 percent of GDP. Papandreou announced cuts to the defense budget and to bonuses in the public sector, as well as reductions to social security and general government expenditure.
Market reactions to the speech were muted, with the spread on Greek 10-year government bonds over German bunds rising to 222 basis points, compared to 207 before the speech. Commentators said there was nothing new in the speech. Last week Fitch’s, a credit rating agency, downgraded Greek sovereeign debt to BBB+.
Links to other sites: Pittsburgh Post-Journal, Wall Street Journal
The New York Times in a hard-hitting weekend article lashed out at Goldman Sachs and suggested that the bank should forget about employee bonuses and make a major donation to the US government. It points out that while the bank has repaid $10 billion, it owes taxpayers far more than that, and it calls the $16 billion the bank is planning to pay its workers to be rejigged: “A multibillion-dollar gift to the federal Bureau of the Public Debt, which accepts tax-deductible donations to reduce the national debt. The donation can come from the bonuses; that way, it would not harm shareholders, because they only get their cut after the bonuses are paid.”
Links to other sites: New York Times opinion page, Reuters
National debt: It just got a little less deep
Bern, Switzerland (GenevaLunch) – Switzerland’s debt decreased to CHF119 billion in the second quarter 2009, about CHF2.8b less than at the beginning of the year, according to figures released by the Swiss Federal Department of Finance 29 September. Swiss government debt is 22 percent of gross domestic product (GDP). This increases to 41 percent if all public debt is taken into account, including cantons and communes, but still less than the average for most G-8 countries.
Public debt may decrease CHF2b more before the end of the year if the federal government exercises its right to sell the convertible bonds it bought from UBS to prop the bank up.
Geneva, Switzerland (GenevaLunch) – Geneva’s debt has fallen CHF 2.6 billion in the past three years to CHF 10bn, according to canton Geneva finance minister, David Hiler, in an interview with the Tribune de Genève 17 August. In 2007, Hiler says, the canton’s debt was CHF12.6bn. The reduction was possible thanks to several good years for tax receipts, a change in the law to allow public companies to put their debt on their books, and more efficient state administration, he argues. Hiler nevertheless foresees a gradual increase in the debt until 2011.
