A few days ago the IMF came out with an updated number for our worldwide debt. The world has amassed $152 trillion worth of debt. So much for the notion that the world can’t work together on anything. We have succeeded at racking up amounts that won’t be able to be paid off for generations, if ever. Public and private debt accounted for over 200% of all global output last year. If that wasn’t enough, there is an even more shocking number lying in these numbers.
The vast majority of worldwide debt is actually held in the private sector. You hear about out of control government spending on the news all the time but little focus is paid to overextended companies and citizens. The IMF noted that two thirds of worldwide debt, about $100 trillion, is held in the private sector. “Excessive private debt is a major headwind against the global recovery and a risk to financial stability” said Vitor Gaspar, IMF Fiscal Chief. I couldn’t have stated it better.
Eventually we have to stand up and say enough is enough. We are mortgaging our children, grandchildren and great grandchildrens future because we can’t balance a stupid check book. Our debt issue is the definition of insanity. How long will it take for the tide to turn the other way? How long will we play with fire and act like getting burned is an impossibility.
We can’t always control what our governments are doing but we can control our own behavior which as it turns out is the biggest problem. We must learn to live within our means. We need to put down the credit cards and learn to be content with what we have. We need to learn the difference between a want and a need. An out of control situation is continuing to get worse and we all need to control what we can. That means we need to control ourselves. Remember, solving any problem starts with controlling the person you see when you look into a mirror.