Present generations, as well as some governments, often find themselves weighed down by debt carried forward from previous years. Ordinary people too complain about their financial challenges although some may receive relatively high monthly salaries. Their life of luxury will certainly deprive many of the opportunity to save or invest for their future. Credit cards play a major role in increasing the monthly expenses of individuals and entire families.
This is also the case with some governments around the world that are accustomed to relying on foreign debt to support their budgetary requirements and enable their citizens to conduct their daily lives with some ease.
At the same time, the populations of these countries are beset with taxes while subsidies on basic services are reduced or withdrawn. Compounding the situation for such populations is the inability of their government to attract investors support economic growth. Adding to the plight of such populations are the impacts of wars, conflicts and dubious interventions.
While the year 2022 has its share of positives, the biggest downside has been job losses and the decline in the monthly incomes of many people. The reasons are many: workers could either have earning meagre wages, new tax burdens, layoffs, and the pandemic that hit businesses and caused major disruptions globally. Adding to these challenges are difficulties linked to supply chain problems, high energy prices, and others.
The outlook for 2023 is not very reassuring due to the turmoil in world markets, at a time when many countries are laden with huge debt, which threatens the global economy. Whether sovereign debt of governments, or other debt of companies or individuals, debt in general reduces opportunities for investment. After all, previous debt needs to be serviced through payments of sizable interest amounts, thereby burdening government budgets even more.
From this standpoint, civil society institutions are required to share with individuals the responsibility for this financial burden that people face through the establishment of social community institutions concerned with alleviating the debts incurred by individuals, especially those who have been laid off from business, and whose trade and business have been subjected to losses that make them hostage to lenders. Some of them have even become job seekers who cannot meet the needs of their children and families.
The world cannot look the other way when governments and individuals are laden with debt. The indebted also risk default amid high interest rates and a general decline in economic growth. Consequently, nations are at risk of a decline in their global credit rankings. This is particularly concerning as we are on the cusp of a global economic recession in 2023.
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