After the Global Financial Crisis, there is some reduction in the private sector debt in some countries, notably in the US. However, the levels of government debts have continued to rise. Before the Global Financial Crisis, the US federal debt was $ trillion. In 7 years’ time, the federal debt increased by almost 100% to $ trillion. This is equivalent to an increase from 63% of GDP to 103% of GDP. In the euro-area, the level of public debt was 100% of GDP prior to the eruption of the European Sovereign Debt crisis in 2011, and it went up by another 2.7 trillion Euros and reached 120% of GDP in Q3 2014. In Japan, the situation is even worse. Public debt to GDP ratio went up steadily in the last twenty years and now reaches a stunning level of about 260%. Together with private-sector debt, the total debt of Japan adds up to about 480% of GDP, the highest in the developed world. So we don’t have a pretty picture in the developed world as a whole. 9. Such rapid growth of public debt in major advanced economies reflects the lack of fiscal discipline and unrestrained spending behaviour of their governments. Except for Germany, most European governments have never been able to record fiscal surplus in any year since the early 1980s, with average annual fiscal deficits amounting to about 3–8% of GDP.
To push my point further, not only we should not spend now and ask our children to pay later, I would argue that our generation, like our parents and grandparents before us, must seek to protect our children and grandchildren by standing ready to make sacrifices from time to time for the benefit of a better Hong Kong in the future. 21. 6  Thank you for having me this evening and thank you for your patience. BIS central bankers’ speeches