scholarly journals U.S. Debt: The Next Financial Crisis?

2018 ◽  
Vol 2 (1) ◽  
pp. 72
Author(s):  
Paul Stuart
Keyword(s):  
Financial Crisis ◽  
Growth Rates ◽  
Environmental Protection Agency ◽  
Historical Context ◽  
Government Debt ◽  
Gdp Growth ◽  
Tax Reduction ◽  
The 2008 Financial Crisis ◽  
Manageable Level ◽  
The U.S

<p>As the U.S. economy has mainly recovered from the 2008 Financial Crisis, with unemployment below 5%, inflation below 2%, and the stock market near all-time highs, there is growing concern about the huge amount of U.S. government debt, which today stands at over $20 Trillion dollars and 106% of Debt/GDP. Could this be the next thing to derail the U.S. economy, and in so doing, negatively affecting nearly every other country in the world?  This paper reviews the size and scope of the U.S. National Debt in it’s historical context. There are three reasons to be alarmed about this, especially now. First, the annual budget deficit, which had been shrinking in the later years of the Obama administration, is once again on the rise. Second, the Republican tax reduction bill is estimated to add another trillion dollars to the overall level of government debt in the next 10 years, even with higher GDP growth rates factored in. Third, the Trump administration, while slashing other areas of government spending (State Department, Environmental Protection Agency, and more) is once again seeking major increases in military spending. This scenario is strikingly similar to the early 1980’s, where deficits soared as a result. The paper also offers some solutions as to what can be done to bring it down to a more manageable level (or at least reduce it’s rate of growth). Like many things in economics, the “best” solution is to find ways to return to levels of historical GDP growth rates (3% and above).</p>

Government Debt

2019 ◽  
pp. 81-94
Author(s):  
Keith Pareti ◽  
Rob Kennedy
Keyword(s):  
Financial Crisis ◽  
Gross Domestic Product ◽  
Sovereign Debt ◽  
Investment Decisions ◽  
Government Debt ◽  
Rating Agencies ◽  
Product Ratio ◽  
Default Rates ◽  
The U.S

This chapter focuses on the origin and functionality of U.S. government debt (Treasuries). Debt in the U.S. has been increasing for many decades, especially since the financial crisis of 2007–2008. The types of debt securities are discussed along with the auction process to obtain these investment vehicles. All investments involve risks and rating agencies attempt to rank and grade the risk associated with sovereign debt. Default rates, derivative contracts, and risk are important in making investment decisions with government debt. Investors could range from long-term investors, short-term speculators, and others. This chapter concludes with the outlook into the future and the historic high debt-to-gross-domestic product ratio.

scholarly journals GOVERNMENT DEBT OF SELECTED EUROPEAN COUNTRIES

2019 ◽  
Vol 30 (6) ◽  
pp. 1569-1573
Author(s):  
Wioletta Świeboda
Keyword(s):  
Financial Crisis ◽  
Value Added ◽  
Government Debt ◽  
Sustainable Growth ◽  
European Countries ◽  
Specific Subset ◽  
General Government ◽  
The 2008 Financial Crisis ◽  
The Government ◽  
The Impact

The purpose of this paper is to present the main data about general government debt. It is a challenge to analyze selected group of countries because they are very heterogeneous. For instance Belgium is a well-developed “old-EU” country while Spain is one of the southern European countries with specific issues like unemployment and a huge national debt. Poland, on the contrary, had a centrally planned economy, went through the transition to market economy and only subsequently became an EU member. The key point of this research is to explain how they evolved in the years after the crisis. This paper includes an analysis of the evolution of the public budget of each government.It was fundamental to implement urgent measures and policies, in order to recover the economy of these countries and return to sustainable growth after the 2008 Financial Crisis. A brief overview of these countries’ pensions systems is included, as it has a major share in their government spending and fiscal stability. It is one of the most concerning fiscal issues nowadays that is constantly being in question and probably modified in the short-term.As of 2008, the first symptoms of the international financial crisis began to manifestthemselves in the European countries. As a consequence, European countries like Spain orBelgium suffered a drop in their economic activity and an increase of the unemploymentrate. In the case of Poland, the impact of the crisis was not as dramatic as in other countries,however they also needed to react to the financial deficit.Between the period of 2010 and 2017, the countries needed to make several reformsespecially concerning the national Value Added Tax, and restructuring the provision ofcertain public services such as health funding, infrastructure, education and employment. General government debt-to-GDP ratio is the amount of a country's total gross government debt as a percentage of its GDP. It is an indicator of an economy's health and a key factor for the sustainability of government finance. "Debt" is commonly defined as a specific subset of liabilities identified according to the types of financial instruments included or excluded. The evolution of public debt and the government surplus/deficit among the years, helps to picture how was the country economy situation before the Financial Crisis and therefore helps to understand why the consequences are in some cases more extreme and dramatic than other.

Old Utopias, New Tax Havens

2019 ◽  
pp. 85-98
Author(s):  
Stefan Eich
Keyword(s):  
Financial Crisis ◽  
Historical Context ◽  
Global Politics ◽  
The Political ◽  
2008 Financial Crisis ◽  
Tax Havens ◽  
Bretton Woods ◽  
The Past ◽  
New Form ◽  
The 2008 Financial Crisis

Cryptocurrencies are frequently framed as future-oriented, technological innovations that decentralize money, thereby liberating it from centralized governance and the political tentacles of the state. This is misleading on several counts. First, electronic currencies cannot leave the politics of money behind even where they aim to disavow it. Instead, we can understand their impact as a political attempt to depoliticize money. Second, the dramatic price swings of cryptocurrencies challenge their self-fashioning as a new form of money and reveal them instead as speculative assets and securities in need of regulation. While the preferential tax and regulatory treatment of cryptocurrencies hinges on their nominal currency status, it is ironically precisely their success as speculative assets that has undermined these claims. Finally, far from heralding a radical break with the past, electronic currencies serve as a reminder of the unresolved global politics of money since the 1970s. To support these three interrelated theses this chapter places the rise of cryptocurrencies in the historical context of the international politics of money between the end of the Bretton Woods system and the response to the 2008 Financial Crisis.

scholarly journals IS THERE A “LOW INTEREST RATE TRAP”?

Ekonomika ◽  
2012 ◽  
Vol 91 (1) ◽  
pp. 7-23 ◽  
Author(s):  
Kui-Wai Li
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Output Growth ◽  
Theoretical Discussion ◽  
2008 Financial Crisis ◽  
Investment Returns ◽  
The 2008 Financial Crisis ◽  
The U.S

This article stylizes the monetary policy features applied during the chairmanship of Mr. Alan Greenspan and condenses statistical discussion into the “low interest rate trap” in the U.S. economy. Data from the U.S. in the decade prior to the 2008 financial crisis are used. A monetarist solution to the “low interest rate trap” is provided. The paper challenges the theoretical discussion on the Keynes’ interest rate – output relationship, and poses the question whether difference in investment returns would present a different picture in output growth.

scholarly journals Does the UK economy grow faster under a Conservative or Labour government?

2021 ◽  
Vol 10 (2) ◽  
pp. 95-101
Author(s):  
Amr Saber Algarhi ◽  
Alexander Tziamalis
Keyword(s):  
Financial Crisis ◽  
Gdp Growth ◽  
2008 Financial Crisis ◽  
Quarterly Data ◽  
The United Kingdom ◽  
Real Gdp ◽  
Consistent Performance ◽  
The 2008 Financial Crisis ◽  
New Policies ◽  
The Uk

We use quarterly data from 1955 to 2019 to examine the performance of Conservative and Labour administrations in terms of real GDP growth in the United Kingdom. To account for fiscal lags in the legislation and implementation of new policies by each administration, we explore up to lag 8 in addition to an overlapping technique. Our main finding is that the UK economy has grown with a similar pace under both parties, however Labour governments seem to do better in tackling recessions and achieve a more consistent performance. Labour’s advantage becomes more pronounced if we discount the effect of a large external shock, the 2008 Financial Crisis.

scholarly journals What Determines Capital Flow Dynamics for Russia

2019 ◽  
Vol 14 (6) ◽  
pp. 8-35
Keyword(s):  
Interest Rates ◽  
Growth Rates ◽  
Capital Inflow ◽  
Capital Flow ◽  
Real Effective Exchange Rate ◽  
Gdp Growth ◽  
Push Factors ◽  
Financial Account ◽  
The Impact ◽  
The U.S

The paper studies the impact of external supply or “push” factors (global economic and financial indicators, oil prices, sanctions etc.) and internal demand or “pull” factors (actual and expected GDP growth rates, institutional indicators, openness indicators etc.) on private sector capital flow components (foreign direct, portfolio and other investments) and capital flow aggregates (gross capital inflow and outflow, net capital inflow) in the Russian case, based on regressions utilizing 1994–2018 quarterly data. Among the external factors, the VIX volatility index, the real effective exchange rate of the U.S. dollar and the sanction intensity index prove to be consistently significant. The impact of sanction shocks is found to weaken over time, probably reflecting adaptation to sanctions. Among the internal factors, only the expected GDP growth rates prove significant. In contrast to existing literature on emerging markets as a whole, no significant impact of the interest rate and GDP growth differentials (with respect to advanced economies) is established. It is demonstrated that the push factors account for the larger share of explained variance of gross capital inflow and outflow as well as net capital inflow. In addition, capital flow volatility indicators are analyzed, with positive correlations found for the VIX index, the U.S. interest rates, the oil price volatility, and the financial account openness index.

scholarly journals Exploring Systemic Risk of Chinese SIFIs using a Simplified SRISK Model

2018 ◽  
Vol 15 (3) ◽  
pp. 469
Author(s):  
Muhammad Jamal Haider ◽  
Adrian Hemmes ◽  
Gao Changchun ◽  
Tayyaba Akram
Keyword(s):  
Financial Crisis ◽  
Financial Institutions ◽  
Systemic Risk ◽  
Risk Index ◽  
Historical Context ◽  
Risk Exposure ◽  
2008 Financial Crisis ◽  
Increasing Trend ◽  
Economic Slowdown ◽  
The 2008 Financial Crisis

The exposure of banks to systemic risk has been rising in an ever more financialized and interconnected economy. In China, economic slowdown and more non-performing loans mean that the financial system has operate in an increasingly stressed environment, strengthening the vulnerability of future systemic shortfall. In this study, systemic risk in Chinese systematically important financial institutions (SIFIs) is analyzed using a simplified SRISK model. The results are set into historical context, its characteristics are illustrated, and compared to an existing risk index. With that the study contributes to the existing literature by exploring application the SRISK model from a regulatory framework and illustrating some of its implications on Chinese SIFIs. The key findings include (1) an increasing trend of systemic risk exposure and (2) evidence for a divergence between volatility and systemic risk since the 2008 financial crisis.

“Trump”—What Does the Name Signify? or, Protofascism and the Alt-Right

2018 ◽  
Vol 14 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Matthew Flisfeder
Keyword(s):  
United States ◽  
Financial Crisis ◽  
Historical Context ◽  
The United States ◽  
Right Wing ◽  
2008 Financial Crisis ◽  
Contemporary Politics ◽  
Politics And Culture ◽  
The Media ◽  
The 2008 Financial Crisis

This article examines the rise of the alt-right and Donald Trump’s successful campaign for president of the United States in the context of three overlapping contradictions: that of subversion in postmodern culture and politics, that between the democratic and commercial logics of the media, and that of the failure of the Left in the wake of the 2008 financial crisis. The article looks at the rise of “Trumpism” and the new brand of white nationalist and misogynistic culture of the so-called alt-right in its historical context to show how it is consistent with but also distinguished from previous right-wing ideologies. More generally, the three contradictions presented here are proposed as explanations for understanding the mainstreaming of the alt-right in contemporary politics and culture.

scholarly journals Economic Growth and Government Debt of Six Large National Economies before and after the 2008 Financial Crisis

2018 ◽  
Vol 7 (4) ◽  
pp. 30
Author(s):  
Jean Loo ◽  
Haihong He
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
Empirical Studies ◽  
Government Debt ◽  
The United States ◽  
2008 Financial Crisis ◽  
Before And After ◽  
Negative Effect ◽  
The 2008 Financial Crisis ◽  
National Economies

This paper investigates the causal relationship between economic growth and government debt of six large national economies ten years before and ten years after the 2008 financial crisis. There have been numerous studies on whether government debt has any negative effect on economic growth. The results of most empirical studies are mixed depending on the levels of government debt, the countries included in the sample, the sample periods chosen, and the methodologies employed. This paper focuses on six large national economies, namely, the United States, Japan, Germany, the United Kingdom, France, and Canada during the periods ten years before and ten years after the most recent financial crisis of 2008. It is found that there are significant increases in the level of government debt and decreases in economic growth during the ten years after the financial crisis for all six countries. Our results show that the hypothesis that government debt does not Granger-cause economic growth is rejected for all six countries combined for the pre- financial crisis sub-period and the whole sample period, but not for the post financial crisis sub-period.  The hypothesis that economic growth does not Granger-cause government debt is also rejected for both the pre- and post- financial crisis sub-periods as well as for the whole period. In short, our investigation documented a bidirectional Granger causality between government debt and economic growth during periods ten years before, ten years after, and the combined periods before and after the 2008 financial crisis. The evidence also suggests that economic growth reduced government debt for most countries during all three sample periods.

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