The Tinderbox of Debt and Deficits

Footnotes and Sources

¹ What does $1 trillion look like?

http://www.pagetutor.com/trillion/index.html

² http://www.usdebtclock.org/index.html

³ http://www.usdebtclock.org/index.html

⁴ How much is quadrillion? http://www.nytimes.com/2013/08/10/world/asia/japans-debt-reaches-new-milestone.html?_r=0

⁵ http://globalnews.ca/news/831176/ontario-deficit-drops-to-9-2-billion-in-2012-13/

⁶ https://www.taxpayer.com/commentaries/toronto/ontario-debt-clock-tour, and http://researchforum.ca/research-topics/economy-and-finance/public-debt/31-ontario-debt, and Royal Bank of Canada’s Economic Research publication: Provincial Fiscal Tables (September 10, 2013) http://www.rbc.com/economics/economic-reports/pdf/provincial-forecasts/prov_fiscal.pdf, and Ontario Public Accounts (2002-2013), Ontario Financing Authority at http://www.ofina.on.ca/borrowing_debt/borrowhistory.htm

⁷ https://www.ontario.ca/government/2013-ontario-budget-highlights

⁸ http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/03/ontarios-public-finances-a-fiscal-primer.html

⁹ http://www.rbc.com/economics/economic-reports/pdf/provincial-forecasts/prov_fiscal.pdf

¹⁰ http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/state-of-ontarios-indebtedness.pdf

¹¹ http://www.taxpayer.com/media/OntarioDebt_Backgrounder.pdf

¹² http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/state-of-ontarios-indebtedness.pdf

¹³ http://www.reuters.com/article/2013/08/27/us-japan-economy-debt-idUSBRE97Q05H20130827

¹⁴ http://online.wsj.com/news/articles/SB122938932478509075

¹⁵ The Japanese Debt Crisis: (Parts 1 and 2), published on CFA’s Website: Enterprising Investor, Ron Rimkus.

Part 1: Has Japan Passed the Point of No Return?  (April 19, 2012)

http://blogs.cfainstitute.org/investor/2012/04/19/the-japanese-debt-crisis-has-japan-passed-the-point-of-no-return/

Part 2: When Does Japan Cross the Event Horizon? (April 20, 2012)

http://blogs.cfainstitute.org/investor/2012/04/20/the-japanese-debt-crisis-part-2-when-does-japan-cross-the-event-horizon/

¹⁶ http://www.businessinsider.com/what-is-abenomics-2013-3

¹⁷ http://en.wikipedia.org/wiki/Quantitative_easing

¹⁸ Gross Government Debt: Bank of Japan, Federal Government of Japan Tax Revenue: Ministry of Finance, Japan

¹⁹ http://www.clearonmoney.com/dw/doku.php?id=public:japan_government_debt&s[]=japan&s[]=jgb and http://www.bloomberg.com/news/2012-07-25/world-s-biggest-pension-fund-sells-jgbs-to-cover-payouts.html

²⁰ http://www.economonitor.com/blog/2013/01/the-setting-sun-japans-forgotten-debt-problems/

²¹ John Mauldin, The Mother of All Painted-In Corners, http://d21uq3hx4esec9.cloudfront.net/uploads/pdf/20130525_TFTF4.pdf

²² http://www.businessinsider.com/what-is-abenomics-2013-3

²³ http://online.wsj.com/news/articles/SB10001424127887324576304579071251188983022

²⁴ http://www.cbo.gov/sites/default/files/cbofiles/attachments/44172-Baseline2.pdf and http://www.cbo.gov/publication/44574

²⁵ http://research.stlouisfed.org/publications/review/12/11/Thornton.pdf

²⁶ http://research.stlouisfed.org/publications/review/12/11/Thornton.pdf

²⁷ The White House, Office of Management and Budget, Historical Tables:  http://www.whitehouse.gov/omb/budget/Historicals

²⁸ http://en.wikipedia.org/wiki/Gold_standard

²⁹ http://www.forbes.com/sites/charleskadlec/2011/08/15/nixons-colossal-monetary-error-the-verdict-40-years-later/

³⁰ The White House, Office of Management and Budget, Historical Tables:  http://www.whitehouse.gov/omb/budget/Historicals

³¹ The following three studies by leading economists all confirm the detrimental consequences of extreme governmental indebtedness.

1. Debt Overhangs: Past and Present, by Carmen M. Reinhart, Vincent R. Reinhart, and Kenneth S. Rogoff, National Bureau of Economic Research, Working Paper 18015, April 2012. http://www.nber.org/papers/w18015
2. Government Size and Growth: A Survey and Interpretation of the Evidence, by Andreas Bergh and Magnus Henrekson, IFN Working Paper No. 858, April 2011; Page 2 Quarterly Review and Outlook Second Quarter 2012. http://www.ifn.se/wfiles/wp/wp858.pdf
3. The Impact of High and Growing Government Debt on Economic Growth – An Empirical Investigation for the Euro Area, by Cristina Checherita and Philipp Rother, European Central Bank, Working Paper Series 1237, August 2010.  http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1237.pdf

³² http://www.nytimes.com/2013/04/26/opinion/debt-growth-and-the-austerity-debate.html?_r=0  and  http://www.amazon.ca/This-Time-Different-Centuries-Financial/dp/0691152640

³³ http://www.heritage.org/research/reports/2013/08/federal-spending-by-the-numbers-2013

³⁴ http://www.heritage.org/research/reports/2013/08/federal-spending-by-the-numbers-2013

³⁵ http://www.cbo.gov/sites/default/files/cbofiles/attachments/44602-LTBO_Testimony.pdf

³⁶ MSCI ACWI ex USA in local currency vs. MSCI USA in USD http://www.msci.com/products/indices/country_and_regional/all_country/performance.html

³⁷ http://en.wikipedia.org/wiki/Quantitative_easing

³⁸ http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans

³⁹ http://www.amazon.ca/Ubiquity-Why-Catastrophes-Happen/dp/0609809989

⁴⁰ http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans and http://www.caseyresearch.com/articles/federal-reserve-policy-failures-are-mounting

 

Chart Sources

Chart 1: Ontario’s Net Government Debt (FY1982-FY2013) – Ontario Ministry of Finance

Chart 2: Japan’s Gross Government Debt (1982-2012) –

1. Gross Debt – Source: Bank of Japan
2. Japan Nominal GDP – Source: OECD (http://stats.oecd.org)

Chart 3: Japan Gov.’s Revenue & Expense (1965-2013) –Ministry of Finance, Japan (http://www.mof.go.jp/english/budget/budget/fy2013/02.pdf)

Chart 4: Japan Real GDP Rolling 5-Year Growth Rates (1965-2012) – Source: World Bank; Data starts in 1960, with the first 5-year point starting on the chart above in 1965

Chart 5: Source: Bloomberg

Chart 6: Source: The White House, Office of Management and Budget, Historical Tables – http://www.whitehouse.gov/omb/budget/Historicals

Chart 7: Source: The White House, Office of Management and Budget, Historical Tables – http://www.whitehouse.gov/omb/budget/Historicals

Chart 8: Source: World Bank; Data starts in 1960, with the first 5-year point starting on the chart above in 1965.

Chart 9: U.S. Congressional Budget Office (CBO)

Chart 10: Source: Bloomberg for S&P 500 Index; Federal Reserve Bank of St. Louis for Fed Balance Sheet

Chart 11: Source: World Bank; Data starts in 1960, with the first 5-year point starting on the chart above in 1965

Chart 12: Japan Surplus/Deficit as % of GDP, Source: Ministry of Finance, Japan

U.S. Budget Surplus/Deficit as % of GDP, Source: The White House, Office of Management and Budget, Historical Tables – http://www.whitehouse.gov/omb/budget/Historicals

Chart 13: Japan Gross Government Debt, Source: Bank of Japan

U.S. Gross Government Debt, Source: The White House, Office of Management and Budget, Historical Tables – http://www.whitehouse.gov/omb/budget/Historicals

Chart 14: Source: Ned Davis Research Group

Chart 15: Source: Bloomberg

Page: