Completed 2020 brought many new trends to the global economy, one of which was recorded values of budget deficit and public debt indicators in most developed countries. Although the final results have not yet been summarized, it can be said that the US federal budget deficit exceeded (given the anti-crisis act of $ 900 billion adopted in December, 20.4% of GDP, Japan - 20.2% of GDP, UK - 16.6% of GDP And only Germany last year managed to keep it at 4.8% of GDP. These values became the highest in the entire post-war history and radically went beyond the scope of those landmarks that in recent years were established by the authorities of the respective countries (in the Eurozone there were assessed 3% of GDP, in the United States for 2019-2020 oriented by 4.9% of GDP, In Japan, 5.8% of GDP).
At the same time, there is nothing catastrophic in all the countries mentioned. Inflation remains under control, and, despite the economic recession (according to preliminary data, the US GDP decreased by 3.5%, Germany - by 5.0%, Japan - by 5.5% and the United Kingdom - by 10.3%), The accumulations of the population even grew, and citizens adapted to "survival" in a pandemic. A huge monetary proposal caused a sharp drop in interest rates, stimulating both investments and consumption of durable goods, buying housing and cars. Almost all forecasts for 2021 talk about the restoration of the economy and excession in 2022. Levels of 2019. In other words, the real sector, as expected, will quickly restore its position, despite the horrible indicators of the deficit and public debt.
The events of the last year were unique in another aspect. Despite the frontal collance of the economy, grown unemployment and catastrophic position of many industries, stock markets have demonstrated exceptionally rapid recovery: S & P500 closed a year by 16.3% higher than the end of 2019 and 70.5% higher than the lowest point of fall in March; Dax - by 3.7%, respectively, and 62.5% higher, Nikkei is 15.2% and 82.3%. At the same time, many assets were ruling - so, the 2020th was the only year, according to the results of which, with a reduction in GDP, real estate had fallen in any of the developed countries. Most of the other capital assets also did not fall in price.
Wealth and CreditThe result was a very specific situation of the simultaneous growth of public debt and public wealth. If you assess the example of the United States, it turns out that public debt has increased by $ 4.6 trillion last year, while the total capitalization of the stock market is $ 6.55 trillion, and household assets are more than $ 7.8 trillion. The notorious state debt counter suggests the growth of debt burden on the Middle American - but the attitude of households' debt to GDP decreased by more than a quarter over the past 12 years. Although the mortgage is currently recorded today, the share of borrowers with the highest credit rating in the third quarter of 2020 became the highest in 20 years - and the share of disposable income, which comes to pay mortgage debts, has decreased by twice and is located at the beginning of the beginning 1970. ГГ.), and debt on credit cards decreased over a year by more than 14%. If you still take into account a decline in the cost of government borrowing, it turns out that the budget spends 7.8% of total expenses to maintain its obligations, and in 1999-2000, when the US federal budget comes down with a surplus, it was 11.2-11.0%.
All said prompts to put one rather obvious question: how much the previous methods of assessing the dangers of deficiency and debt can be considered adequate today? Any Bank, making a decision on the issuance of a loan to a private borrower undoubtedly takes into account its current income (a kind of analogue of GDP, if we are talking about states), but it is also focused on the market value of assets that can be transferred to the provision (in some way resembling national wealth). Is it not obsolete to compare the debt and deficit with GDP? Does it reflect today significant economic proportions or is rather a tribute to the crining conservatism of our consciousness?
Not so badThe events of the last 10 years are forced to seriously think about the significance of traditional indicators of the economic success of individual countries. So, for example, in GDP, China, the world's most developed over the past 20 years, has reduced the gap with the United States - if you consider on GDP at current prices, then from $ 9.1 trillion to $ 5.9 trillion, and if taken into account Currency purchasing ability, China even came forward, overtaking America for $ 3.5 trillion. But the gap in the National Wealth (National Net Wealth) even grew - $ 42.8 trillion in 2020 against $ 39.5 trillion in 2000. Moreover, despite all the arguments about the offensive of the "Chinese era", since 2015, the gap between The United States and China on this indicator growing faster.
If you return to our direct topic - in particular, to public debt, it turns out that over the past 10 years (and for these years there are huge borrowings in connection with the preceding crisis, and several waves of "quantitative mitigation") of its size in relation to The national wealth of the United States practically did not grown (25.4% in 2020 against 22.7% in 2010). It is likely that it is too early to make far-reaching conclusions from this, but the trend clearly indicates that the situation in developed economies, even without taking into account the ease, with which they can emissive the money necessary to overcome the crisis, in recent years is not so bad how this sometimes seems.
How to compare nowNational Wealth (and under it is understood as the total value of assets belonging to citizens of the relevant countries for a minus of their obligations) - an indicator of economic development is clearly undervalued today. Considered in the dynamics, it indicates several very important trends, without taking into account the economic picture of the modern world looks at least incomplete.
- First, and we started, this indicator makes doubt that high budget deficit and public debt rates in developed countries are a source of increased danger: they remain at a relatively low level and in relation to the volume of national wealth do not have trends to growth.
- Secondly, he says a lot about the quality of catching development: since 2000, only China (+6 positions) and India (+7), while Asian "Tigers" demonstrated in the country's rating of countries : South Korea, Hong Kong, Taiwan, Singapore - or retained their rank, or descended compared to other countries (and Germany, France, Italy and Spain retained their positions on the results of these 20 years).
- Thirdly, Russia is assessed from this point of view, it turns out to be much worse than in the case of the application of GDP comparisons for PPS or at the current rate: it accounts for only 0.8% Global Wealth against 3.08% of global GDP on PPP and 1.74% of the current currency courses; Moreover, according to this criterion, Russia falls into a group of long-staging economies of the type of Italy and Japan, whose well-benefited peak did not come to the past 2020, and on (which is quite expected in our case) 2013, - exactly with him, like me Long predicted, we will have to compare our economic achievements as long as the Bolsheviks since 1913
The crisis, which is now still experiencing the global economy, although directly provoked by the Pandemic of Wuhan virus, at the same time reflects both those problems and not new trends that were formed throughout the last 10-15 years (and largely on For the last 50 - more, see Inomertsev, Vladislav. Economy without dogma: as the United States has created a new economic order, Moscow: Publishing House "Alpina", 2021). And we will commit an unforgivable mistake if we continue in new conditions to evaluate economic problems and achieve data on the basis of data and proportions, which for a long time have been successfully applied to the economies, by the degree of their complexity and methods of their regulation are completely dissimilar to the current one.
The author's opinion may not coincide with the position of the VTIMES edition.