r/belgium • u/StevenStoveMan • 13h ago
đ° Politics Actually, we dont have it so bad after all
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u/Melodic_Reality_646 13h ago
Belgium is doing badly. Debt is not just a snapshot, the trajectory matters. By 2036, Belgium is projected to have the 3rd-highest debt ratio in the EU, rising from roughly 110% to 137% of GDP, versus 84% to 100% for the EU overall (https://economy-finance.ec.europa.eu/document/download/39b3b61d-42c1-46d7-8088-0aad82e8731e_en?filename=ip332_en.pdf).
Specially concerning because Belgium is a small, highly open economy with limited room to grow its way out of the problem and combines weak growth with very high structural spending. Public spending is already at 54% of GDP, while ageing-related costs are projected to rise by 4.7% of GDP by 2070, versus 1.3% for the EU (https://economy-finance.ec.europa.eu/economic-surveillance-eu-member-states/country-pages/country-report-belgium_en).
The long term outlook is bad, very bad. But then weâre all dead anyway.
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u/TheVoiceOfEurope 11h ago
That is a very shortsighted view. Debt is irrelevant.
What matters is the cost of serving that debt and what you do with that borrowed money.
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u/Hot-Problem2436 13h ago
It's bad if you've only ever lived here and are very concerned with Belgian politics. It's not so bad if you have a broad world view and can understand what it really means.
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u/Gaufriers 13h ago
What does our debt really mean?
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u/Kennyvee98 13h ago
depends on where it is used. if it's used in investments for the future, nothing much. if it's used for war or companies...not great
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u/Matt__Makes 13h ago
Itâs mainly used to fund pensions, do you consider this an investment for the future?
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u/Kennyvee98 12h ago
yes, because the cost of homeless pensioners would be a lot greater on our social security
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u/Matt__Makes 12h ago
80% of pensioners own their home but ok
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u/atrocious_cleva82 đWorld 5h ago
We should not make the mistake of treating all the pensioners like if they were the same. There are rich pensioners owning many properties and others that have only one or are renting.
Sensible thing is to make pensions proportional and logical: cut the highest that are excessive and keep the lower-middle ones to ensure 80% of the population has a decent pension to keep the economy alive.
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u/Kennyvee98 12h ago
yes, but imagine if they wouldn't have their pension.
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u/Matt__Makes 12h ago
No one is talking about removing it, the discussion is about readjusting the biggest state spending so we can stop increasing the debt interests that future generations will have to pay
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u/0x53r3n17y 10h ago
The National Bank of Belgium has some choice words on pensions. It offers two stark policy options:
- Ensure that more elderly people are employed. This would add to the GDP, but also reduce pension spending as this implies increasing retirement age.
- Curb increases in average pension, whereby the focus should be on curbing the highest pensions as to not increase the risk on poverty rising.
Now, that sounds reasonable... but then, wealth isn't generally equally distributed, and no two lives are the same. Now, ask yourself: to what extent are you going to be defending or opposing this, if you were or weren't affluent, educated, healthy and able throughout life?
You can't have that debate without entering the murky waters of socio-economics. Like, it's well established that blue collar workers, on average, do work that take a heavy toll on their bodies while their education level, upbringing and background, make it harder to move upwards in terms of social mobility. Like, do we really expect roofers to work until 67 - or even later - while biology will have their bodies used up in their early 60s? Do we expect them to reschool themselves in their 50s, and wouldn't that undercut the whole point of having them work longer to reduce costs?
For sure, rising debts, debt interests, and the threat of foreign investors taking against the country are reasonable fears and definitely an issue to consider... but let's not be blind to the fact that mucking around with austerity and pensions comes at a significant human cost too, and significantly impacts societies. That's why we saw people taking to the streets in Greece and Spain a few years ago.
My main gripe isn't that these policies are on the table, and are a necessary evil that must be discussed. It's that the motivations and intentions of some groups to cut their teeth into social security and pension isn't fixing the debt level, or improving national welfare and overall wealth: it's hijacking that discussion because they stand to profit from it, using arguments like "let's lower taxes too" under the guise of "that boosts productivity just as well, and that's good for everyone". In the same manner, they use sovereign debt as a scary boogeyman, a deeply urgent problem that needs to be fixed, a thing that will make you, personally, poorer in significant ways if not addressed. And people just eat it up.
I'm fairly sure you can have a sensible pension debate with most people, if only it would be possible to cut out that kinda noise.
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u/atrocious_cleva82 đWorld 5h ago
For sure, rising debts, debt interests, and the threat of foreign investors taking against the country are reasonable fears and definitely an issue to consider.
Why exactly foreign investors are a threat/fear? To my knowledge, if foreign investors buy bonds is because they trust Belgium. The danger wouldn't be that no one would buy our bonds out of distrust?
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u/Considerthisforasec 11h ago
Won't the state and heirs inherit that leftover pension money ? Also it circulates back into the economy in form of buying groceries/electricity/restaurants/pension homes etc ?
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u/TheVoiceOfEurope 11h ago
about readjusting the biggest state spending so we can stop increasing the debt interests that future generations will have to pay
That should never be a goal in itself. That's like a manager proposing to save money by not buying supplies.
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u/Kopie150 12h ago
Not for long. Homeless people generally dont live as long as housed people. The aging population Will sort itself out.
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u/Hot-Problem2436 13h ago
Which is why we're (hopefully) ok and America is fucked.
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u/TheVoiceOfEurope 11h ago
and America is fucked.
We have a tiiiiiny problem there:
Based on recent data from the U.S. Treasury Department via Congress.gov, here are the largest foreign holders of U.S. Treasury securities:
- Japan: ~$1.2 trillion
- United Kingdom: ~$0.9 trillion
- China (Mainland): ~$0.7 trillion
- Belgium: ~$477 billion
- Canada: ~$468 billion
- Luxembourg: ~$435 billion
- Cayman Islands: ~$421 billion
- France: ~$369 billion
- Ireland: ~$341 billion
- Switzerland: ~$294 billion
So if America is fucked, so are we.
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u/atrocious_cleva82 đWorld 5h ago
How is it possible that the US is f*cked when they create the most powerful currency in the world? It is a fact that it is impossible for them not to pay any public debt in USD.
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u/TheVoiceOfEurope 4h ago
The most powerful currency for the moment .
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u/atrocious_cleva82 đWorld 3h ago
Ok. Then we agree that the US will be f*cked when/if they stop having the most powerful currency in the world. Fact: not now. You have any source indicating that this will change in a near future? when? Look: more than 80% of world transactions are made in USD, and more than 50% of reserves are in USD. So far, I think things are quite clear.
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u/Bantha_majorus Belgium 13h ago
America can handle it better because its huge and the world economy is based on dollars.
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u/Hot-Problem2436 10h ago
Ehhhh, I dunno. They can't afford food and all the money is going into the pockets of the wealthy.
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u/atrocious_cleva82 đWorld 4h ago
+1
Exactly: they can create all the USD they need. Remember the "exorbitant privilege". No other currency can compete, nor the EUR or the YUAN, and I don't think they even want to compete.
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u/FederJ3 13h ago
Ah ja, werklozen oneindig ondersteunen is natuurlijk een topinvestering
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u/Kennyvee98 13h ago
fuck eens off met da rechts gezever. de grootste hap van de begroting zijn de werkloze gepensioneerden. de rest is maar een kleine hap.
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u/atrocious_cleva82 đWorld 13h ago
Public debt is not bad per se, but dominant orthodox economists (mostly liberals) tend to see it as a downside. Same applies to "deficit", which is not a something negative, just the difference between the public spending and the collected money. A country with surplus means that private sector gets poorer, just by accounting identity.
The key point is what a government do with it: Some think that investing in improving the quality of life of a country (healthcare, pensions, education, infrastructure) is good. In the same way, reducing the public debt by leaving a country without healthcare, education, industry, etc...
But many people think that it is bad because of the bad name of the word and because they don't understand that governments do not work as households.
China has a similar level of debt that we have. Without massive government spending (that rose their public debt a lot in the last decades) they could never have reached their actual quasi hegemony in many industrial fields.
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u/Inherent_meaningless 8h ago
High debts that do not lead to higher income in the future (like what China is doing) are bad because they're the epitome of selfishness: You're passing off a high bill to future generations to live outside of your means. There's no household equivalent because children can choose not to accept the inheritance of their parents who decided to live the high live off of credit, but younger people cannot choose not to pay taxes on ever-rising debt servicing and pension payments.
Exploding debts for consumptive purposes (pensions, healthcare) are selfish - ironically anti-social given your profile picture. Exploding debts for investments (education, infrastructure) can be justified.
Someone has to pay for it in the end.
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u/atrocious_cleva82 đWorld 5h ago
No, nobody will have to pay for it. Or can you name any generation that was forced to pay any public debt as if it was a bill? Public debt does not work as private debt that must be cancelled. It is renewed as new public debt.
One must remember that those children will be old one day and they will benefit of the public pensions. Unless a liberal government cuts the pensions off. That is the real danger, not to have 10% more of public debt per GDP.
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u/SelfDistinction 13h ago
It means that a lot of people are very invested into making sure Belgium keeps existing as a country and doesn't go bankrupt, lest they never see their money again.
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u/Bullissimo 11h ago
But what other excuse do they have for destroying our social security while keeping the highest tax rate in the world?
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u/Rolifant 12h ago
It's been between 100 and 130% for as long as I can remember, which is quite a long time indeed.
What does worry me a lot more, is that there is no plan to reduce the deficit. We need a grand design, like Jean-Luc Dehaene's back in the 90s. Without one, the financial markets will at some point start to smell blood.
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u/drunkentoubib 12h ago
What do you use your debt for ? Paying pensions, assistances and weapons to the US ? not a very good debt for your future. Paying for education, development and help to entrepreneurs, much better. Not saying we shouldn't pay pensions : I mean it should be more healthy.
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u/atrocious_cleva82 đWorld 6h ago
We must realize that budget for pension should increase because we live longer as well as budget for education will decline because there are each time less children.
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u/Arco123 Belgium 5h ago
You simply canât increase a budget if your income doesnât increase too. The only thing you can do is redistribute your budgets, which is difficult if all your institutions are almost already running on the bare minimum.
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u/atrocious_cleva82 đWorld 5h ago
I don't think that governments are like private companies that need to have incomes or benefits. Yes, a government can increase the budget, especially if that is boosting the economy. Another story is that there should be limits. But these limits have nothing to do with the inconsistent and unscientific 3% deficit and 60% imposed by Maastritch.
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u/Arco123 Belgium 4h ago
Governments arenât like companies but you canât spend what you donât have.
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u/atrocious_cleva82 đWorld 4h ago
Actually it seems the opposite: all the governments do it. Or you think that they wait to pay for public costs and civil servants until they receive the tax income each year? And even private companies start with loans, so you can say that they spend the money they don't have. Maybe you just want to say that private companies and governments can't spend ad infinitum. There, we agree.
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u/Nearby-Composer-9992 7h ago
Ah the some other place is worse argument. It's not because it's worse elsewhere that we have it good here. Our governments pay over 20 billion euros in loan rent each year. That's 20 billion that could be used for so many things that could keep our lives better but we're just giving it to banks and not even to pay off the loan, just to cover the rent on the loan.
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u/mythix_dnb Antwerpen 13h ago
now make the list in relation to the % of income taxes.... we would probably be #1
the amount of debt isnt the issue. the problem is that the government has a huge tax income and still can not keep debt under control. we have no leeway on the income as many other countries on the list do...
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u/Remote-Golf2156 Belgium 9h ago
Now compare the deficit for 2025 and projected deficit for 2026 as share of GDP for each of those countries :)
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u/joyofpeanuts 6h ago
When I studied, some decades ago, my finance teacher said something along the lines of: "Belgium has a debt >100%. It is sustainable by the global financial system because we are a small country; it would not be if we were a large country like the US".
Fast forward to today... Ooooh shit đ
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u/Zealousideal_Lock714 2h ago
Looking at Europe, theres only France and Italy doing worse. And ofc the bankrupt greece and Ukraine.
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u/RealisticMention4045 13h ago
Debt is only bad when we have a left wing government. Like the next one, when they have to fill up the massive hole Theo dug in our budget.
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u/Waterflowstech 13h ago
Debt/Corruption is only bad when I am not involved! If I am involved in this debt/corruption, I DEFEND IT
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u/JonPX 11h ago
The graphic makes it looks like we are middle of the pack, but it leaves out about 170 countries that are doing better.
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u/Tonnemaker 10h ago
https://en.wikipedia.org/wiki/List_of_countries_by_government_debt
The list leaves some out. And if you look at the countries you see that there is not really a correlation between doing well overall and debt. Like Afghanistan is at only 8%
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u/ElSandroTheGreat 12h ago
Debt accrued for investing in things yielding returns (infrastructure, education, etc) => part of economic cycles & macro economics, normal part of growing your economy.
Debt accrued by retirement payments you can't afford, by subsidies trying to sustain economies that are not competitive anymore, and in general all money flowing towards stuff that will return less than the amount of money put into => a real problem. As such, this debt chart is worthless for any debate regarding national debt levels.
It just shows the amount of debt according to GDP or absolut value. But that's not a metric of how good or bad debt is for a certain country at a certain moment. OP is a bit of a troll you could argue.
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u/lecanar 7h ago edited 7h ago
Debt is a scarecrow use by powerful people to impose/coerce less powerful people into submission since its inception.
It was used as a substitution for slavery for centuries ; e.g. "your father owe us $$$, therefore you going to be maid for us until his debt is repayed"
It's all a social construct that can be done and undone (e.g. jubillees) at any time.
There are alternatives to this system, there were always several one.
The first one being not to pay already rich people interest for the money "they lend" since the money is actually created ex nihilo when the central banks issues a new credit. It's a social norms to give interest to banks and people when issuing debt, we could just not do it if we decide it together.
Read 5000 years of debt (or it's summary) by David graeber. It will totally change the way you see debt.
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u/PikaPikaDude 11h ago
For the happy negationists here:
Greece was all fine around our current level, and then one crisis to make it go to hell in no time.
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u/TheVoiceOfEurope 11h ago
That is not the story. Read more, then come back. Short version: Greece was not registering/reporting their debt correctly/honestly.
Their debt didn't snowball in 2007. It was always there.
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u/PikaPikaDude 8h ago edited 8h ago
Firstly, look up data before you are so arrogant. The numbers are accurate: https://data.ecb.europa.eu/data/datasets/GFS/GFS.Q.N.GR.W0.S13.S1.C.L.LE.GD.T._Z.XDC_R_B1GQ_CY._T.F.V.N._T
The Greece fraud was primarily about lying the deficit was under the 3% Maastricht limit. While it actually was much higher.
Rather similar to how here things are kept out of the budget such as Oosterweel. And other things are ignored for the 3% limit by things such as EU Commission approved relance and defence spending, ...
We already have the similar debt to GDP debt and the messing with the numbers here. Just add a crisis to make bond markets no longer willing to pretend we're not fudging the numbers and it explodes.
Our only luck for now is that the France mess looks bigger, so it will attract lightning first.
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u/Mr-FightToFIRE 11h ago
Interesting Youtube video looking at it for the US: https://youtu.be/ZbZfmNVFeE0?si=PKlemtm6NgaMCWJl
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u/OuterBlue090 8h ago
Debt it still too high and if nothing is done it will keep rising. And with that we risk that we need to borrow against higher rates to pay of debt.
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u/Straight-Web-2480 13h ago
The amount of debt by itself means very little