To get rich is glorious

Japan - the other major “western” economy - has total government debt of nearly 200 per cent of GDP. Its deficit is now so large that it must borrow an amount equal to the total it collects in income taxes. It is said, of course, that Japan has much debt but also much savings. The trouble is, the savings and the debt are largely the same money. Households saved. Government borrowed the money. The savings that are supposed to offset the debt have already been spent.

All together, Europe, America and Japan have total government debt of about $32 trillion, compared to total output of $34 trillion. Add $50 trillion or so of private debt, and you begin to see the bottom of the hole. In other words, the developed economies have borrowed nearly three years' worth of future output. At 5 per cent interest, (investors recently wanted Greece to pay 16 per cent!) this means the western world must give up all the output from January 1st to the end of February just to stay in the same place.

Meanwhile, back in China, last week's visit to Beijing revealed a glorious transformation. In the early '80s, a visit to China was a hardship. The streets were drab. The people were drabber, in their grey clothes and grey towns. They stared at tourists as they had never before seen a capitalist. Minders still accompanied tourists. Most of the country was off-limits. There were few private automobiles and few roads deserving of them.

In just three decades Beijing has become one of the world's most dynamic, forward-leaning cities, with new Audis and Mercedes bumper to bumper...as far as the eye can see. There are sparkling office towers with millions of earnest workers...and gleaming hotels with sleek prostitutes in the lobbies. Chinese entrepreneurs hustle deals at every table.

China is still an emerging economy. Europe, Japan and the USA, on the other hand, are submerging - sinking in a sea of debt. Getting rich is glorious. Getting poor is a damned shame.