National debt vs. national happinnes
October 5, 2011
During the last couple of years there has been much discussion about debt. Is it good or not? In a family setting, common sense tell us that debt is not good. At the same time it also says that in many instances such as getting a house (or an education in some countries), it’s necessary to get into debt. For business it gets more complicated; incurring into debt or not has many variables. But what is really complex, is for a national economy. The public in general do not want their governments to get into excessive debt, in particular, to foreigners. If you have an education in economics, you know Keynes talked about it.
It’s my opinion that no matter what political orientation, politicians are not motivated to avoid debt at long term. Thus, this creates a great problems for many local, regional and national governments. Of course, this all gets very political, which by definition, ‘politics’ means how to spend our money.
Without getting very philosophical, political, technical or economic, I wondered : Are citizens happier if their countries are more in debt?
I checked real quick Wikipedia for a list of countries by external debt (public+private), and public debt by GDP. Then I compared it to the Map of Happiness. I had no idea what was the correlation going to be. I choose some countries and plot it. This of course is full of caveats, is just a quick and dirt view. I think an economists from Norway has done similar things (in a serious way), but I can’t find it now.
Well friends, the verdict is clear, and I had not idea it was going to be like this:
The more debt a country has, the more likely the citizens will be happier.