World near economic collapse?
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FXGalvatron
Galvanizer
This is gonna be a very, very dumb and ignorant question, but why don't countries clear debt? Like helping each other out (ignoring political reasons)
Because they can't due to various reasons. It's like asking farmers to pay they dues when there has been droughts or floods or his crop failed. If you think logically, farmers are like businessmen but always in the red and always asking for money. Yes, they should learn new techniques etc but they dont. Cant force them. Govts are similar where a major part of the loans are taken away by ministers and everyone in between and funneled to offshore accounts in the west. That money is not coming back. World bank knows, lending banks know. They dont care because ultimately the nation will have the bill in hand.
a better question would've been:
"This is gonna be a very dumb and ignorant question, but why do countries land up in perpetual ever increasing debt, in spite of each major country enjoying long bouts of continued economic growth over decades (Which mean tax money should be enough to fund all spendings)"
Mr.J
Innovator
Many times debt is also raised by selling government bonds. You can't just clear that willy-nilly.
roadrash99
Forerunner
These are tiny countries that are insignificant to the world economy. All this will cause is consolidation of power for the geopolitical big guns like US and China.
Over the past few decades, countries like US and China have onboarded significant debt compared to their GDP. Basically they realised that they have a free pass at getting funding because of their relative stability.
Then you have China which in turn is economically colonising weaker countries by loading them with debt, mostly possible because of corrupt leadership in smaller countries that take on the debt to enrich themselves or build infra for political brownie points while knowing those who succeed them will be screwed with the debt burden.
Honestly, it is a vicious cycle all around and no country is in a position to or has any willingness to clear debts.
why do you think they are insignificant to world economy? bangladesh makes majority of fmcg goods like cotton jeans, clothes, shoes etc which are sold for thousands of dollars in usa or europe. Similarly, Europe subsidized wheat production in Europe to sell to African countries so that african countries cant become self sufficient. Imagine european wheat being cheaper than locally grown african wheat! If africa cant buy their wheat what do you think will happen? wheat prices wil fall down and many farmers in europe will suffer. African people will die of starvation since UN does not do anything unless they see dead bodies on the streets.
china is on the brink of housing industry collapse and China makes most of the worlds products. Chinese govt will try to get their country in order first if anything goes south there. they have enough power to reduce exports and make the world suffer for years. China now owns more companies in germany and other european countries than 10 years ago. Imagine all of them shutting down?
All the western countries have chosen to export all their manufacturing to such economically weaker countries to make more profits. If the weaker countries die, everyone is going to feel it. World is more complex than rich and poor countries now.
roadrash99
Forerunner
In numbers they are insignificant. Let's say Bangladesh implodes tomorrow, what you will see is the chip shortage equivalent for clothes. In a few years companies will adapt and do something to ride it out. Yes if a bunch of countries crumble together at the same time then it will be a problem, like the video is saying. But regional economic downturn is something we have seen multiple times like asian economic crisis and latin american economic crisis in late 20th century. It's not a good thing sure but is not a doomsday scenario either.
Now, most of these nations are going to default toghether on their debts within a couple of years. When a nation's economy is depressed, a war spurs it on due to the increased economic activity. That is a big incentive for nations to go fight a war, so they look for excuses (or secretly create an excuse) to launch/join wars. That means we are just of few years away from a World War.
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