When you are spending more money than the money coming into the system, which happens with almost all socialist systems (because commerce is severely restricted), it collapses.
>>The first step was when Hugo Chávez's socialist government started spending more money on the poor, with everything from two-cent gasoline to free housing. Now, there's nothing wrong with that — in fact, it's a good idea in general — but only as long as you actually, well, have the money to spend.
I think even the article doesn't go far enough though: it's not just about whether you "have enough money", but whether you can reliably expect to keep getting that money, and you won't see increases in your spending obligations.
On that note: There's a dangerously common mentality out there that doesn't understand the concept of "good times don't last forever":
Your country has a lot of oil money coming in? Save some for when it isn't. Revenues are high because of a tech boom? Set it aside for later. Your pension fund investments returned 30% this year? No, don't pay out 23% to the managers "since they hit their 7% target"; that 30% has to cancel out down years.
And in personal lives: Your current job seems like an absurdly good deal? Save and cross-train for when it becomes obsolete or oversupplied.
Too true. I've talked to many successful small business owners that managed to make it through multiple recessions. This is usually the key to surviving.
You mean, like the USA?
The United States can spend according to their projections for the value of US Treasury Bills. US Treasury Bills, in turn, are an investment in the future US economy as a whole. The connection between them is fuzzy and distant but at least in theory the government is run on tax-receipts even though T-Bills are doing so well they are self-sustaining.
Venezuela was borrowing against their own future and their economy was tied up in energy. They are in a different situation.
If only the debt/GDB ratio wasn't growing over the years...
"Alexander Hamilton believed that a domestic debt, supported by federal taxes collected from all the states, would unify the country", a quote from
"Why the Founding Fathers Loved the National Debt"
http://www.bloombergview.com/articles/2013-01-25/why-the-fou...
How many times has the US collapsed?
"Alexander Hamilton believed that a domestic debt, supported by federal taxes collected from all the states, would unify the country", a quote from
"Why the Founding Fathers Loved the National Debt"
http://www.bloombergview.com/articles/2013-01-25/why-the-fou...
As a side note, how this figured into the creation of Washington DC is pretty interesting.
I don't think it is possible under current monetary regimes.
Net debt equals net savings, so the vast majority of developed economies run deficits because somebody has to soak up the surplus they create.
But Venezuela was a petro state. See my other post for the real reason for their collapse.
[1] https://www.cia.gov/library/publications/the-world-factbook/...
Anyway, I checked out the first country (South Korea) in your source. 2014-12-31 estimate of outstanding debt is $424.5 Billion with a credit stock of ~$2.4 trillion.
If you want to only analyze receipts over a short period of time, then I'd guess you can find a positive period for most countries.