A ticking bomb

An electronic display near New York City’s Times Square used to track the course of the country’s public debt so that people could see the burden laid on their shoulders by each administration. After the US military raid on Iraq, the debt has skyrocketed. «Like a ticking time bomb, the US national debt is an explosion waiting to happen,» a recent Associated Press report said, as the debt is expanding by about $1.4 billion (-950 million) a day – or nearly $1 million (-680,000) a minute. I would advise Greek Finance Minister Giorgos Alogoskoufis to install a similar «debt clock» on the ministry’s facade in Syntagma Square so that Greeks can test the government’s claims of spending cuts and economic reform. Because if America’s 30,000-dollar debt per head is an «explosion waiting to happen» what can possibly be said about the debt in this country, which is projected to hover at 25,000 euros for every Greek by the end of 2008? It may seem that public debt as a percentage of GDP (also due to high growth) is going down (from 98 percent in 2005 to 91 percent in 2008), but this is largely a result of creative accounting. In absolute numbers, the country’s public debt has soared from 215.4 billion euros in 2005 to an expected 250.3 billion euros in 2008. Why is public debt going up? Why is the government amassing debts that will take over half a century to pay off? Each year the budget closes with a deficit that is transferred to and increases the public debt. Sure, to most people the public debt has a near-metaphysical quality. «I care more about my own debts to the bank, not the state’s,» people say. But where does the state find the 10 million euros a year that goes to servicing the interest on public debt? It’s all from the heavy income taxes.