Campaign

When people talk about debt, they often have a very misguided viewpoint.  In simplistic terms, debt is bad and any country who has lots of debt are doing something wrong.  In contrast any country who runs surpluses, in effect that helps fund these other countries are seen as well run and in some ways morally superior.

Many of us economic students were brought up with tales of badly run, Latin American nations who ran up huge debts.  Yet now some of those culprits are seen as guiding lights in an era of recession, Argentina still manages to completely opt out of normal financial regulations however and the US still has the biggest deficit on the planet.

The idea that you have a better run society if you run a surplus is of course completely untrue and is easily disproved by Saudi Arabia. This country runs a huge surplus simply because it has lots and lots of oil.  In most other respects the country is very much in the dark ages, actively oppressing all sorts of minorities and has an organisation called The Commission for the Promotion of Virtue and Prevention of Vice (which I think is explanation enough).

There are countries who have lots of money who do try and exercise some sense of moral responsibility of course – Norway and Germany are two.  However inequalities like these, and the huge credit surpluses cause lots of problems in the weaker economies and hence global instability. In many cases a country’s prosperity is largely due to luck, oil and mineral resources can make a huge difference to an economy for obvious reason. More developed countries like the USA and the UK obviously have a huge advantage over developing ones.