the world can't be "broke" in standard terms, since total financial assets has to exceed total liabilities: net worth is positive. However, it's possible that all or most of the debtors could go broke -- bankrupt -- at the same time, if they can't make debt-service payments. That would hurt the creditors, forcing them to take a "haircut."
raghu wrote: > I apologize for linking to the tabloid world of Fox news, but the > title of this story seems to me to represent everything that is absurd > about the reasoning of the deficit hawk loonies. > http://www.foxbusiness.com/story/markets/industries/government/world-broke/ > > I mean how does it make any sense to even ask if the whole world is > broke? Is this not some kind of a weird fallacy? > > When we say an entity is broke or insolvent, we mean that the > liabilities of that entity exceed the value of its assets? > > Is it not then an accounting identity that the liabilities of the > whole world must necessarily equal its assets? > > > -raghu. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine "Those who take the most from the table Teach contentment. Those for whom the taxes are destined Demand sacrifice. Those who eat their fill speak to the hungry of wonderful times to come. Those who lead the country into the abyss Call ruling too difficult For ordinary folk." – Bertolt Brecht. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
