BELIZE DEBT TO GDP RATIO CORRECTED TO 80%

** Central Bank of Belize building.


BELIZE DEBT TO GDP RATIO

Central Bank shows the DEBT to GDP ratio as of November, 2011 at 80%. Not the 58% Debt to GDP ratio quoted earlier this month on this BLOG. Westernbelizehappenings.blogspot.com

Some are quoting verbal cues from Central Bank, that with the appraisals of the nationalized value of BTL to be paid back, that the DEBT TO GDP ratio is now 85%.

The debt trend is rising!

WHAT DOES THIS RATIO TELL US?
What the ratio tells us; is the ability of the politicians managing the country. How good is their policy decision making, their choices of budget priorities and general behavior. Throughout history, ALL countries, other than dictatorships, run by hereditary family tyrannies have trouble balancing income and expenses. There are a NEVER ENDING list of demands by bureaucrats for more money, family and relatives to be put as freebies on the tax revenue government payroll, jobs to be created at taxpayer expense for party faithful and the privileged, connected to the managing politicians. Most governments spend more than the country will earn, via tax revenues. Balancing a budget beween revenue and spending is more difficult than it would appear. The human nature factor kicks in and EVERYBODY wants the government politicians to PAY for some pet project, or for some reason. When the political managers of the country CANNOT control the spending, the DEBT to GDP ratio goes bad and upward. When poor government political decisions ruin economic performance by the private sector, then the GDP falls, as in Greece, Italy, Spain, and Ireland in the EU, or like the USA. Either scenario forces debt load to increase. This is a vicious cycle, as debt ends up breeding more debt and if you have a bunch of idiots running the government then debt can ruin a country. So can inflation. You can tell how good the politicians are doing, running your country, by the DEBT RATIO. Ideally, the ratio should be less than 3%.