Some sixty percent of the world's economies will be so in debt by 2060 that their debt will be downgraded to "junk" status, effectively bankrupting the countries, says a report from Standard & Poor's ratings agency, which also warns that attempts to deal with the problem could cause social instability.
The report (PDF) -- entitled Global Aging 2010: An Irreversible Truth -- says that the proportion of the world's population that is elderly is set to explode to such a degree that many countries will simply not be able to keep up with the ballooning costs of health care and other services.
As elderly people live longer, due to better health care, the proportion of elderly to the rest of the population grows, meaning an ever shrinking proportion of working people is relied upon to fund services for the elderly. But the report warns that efforts to scale back the costs of government services could "severely test social cohesion." And the authors admit that public opinion, in general, is unfavorable to cutbacks in social services.
The S&P report states that the overall debt burden among the world's countries averages to about 40 percent of GDP. By 2050, the report predicts it will have exploded to 245 percent of GDP -- two and a half times the size of the economy. For the United States specifically, the scenario is even worse: S&P forecasts that the US's national debt will explode from around 69 percent in 2010 to 415 percent in 2050 -- an unheard-of level, exceeding even the massive debt levels seen during World War I and World War II.
For more: S&P: 60% of countries will be bankrupt within 50 years | Raw Story
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