We just established that the US has a debt ratio of approx. 48% if you are optimistic, and 84% if you think home values in the United States are going to $0. How does this 48% – 84% debt ratio compare with other countries in the world?
After all, I’m sure you’ve heard that the US dollar is going to collapse, inflation is going to skyrocket, and China and the rest of the world is going to stop buying US Treasury bonds. Not only that, but the US is going bankrupt, our economy is going into another Great Depression, all is doom and gloom, and it’s time to all go out and shoot ourselves…
Wait. Stop.
Before you pull the trigger, I have some good news for you!
The 48% – 84% US debt ratio is WAAAAYYYY better than some of the other countries out there. In fact, we ROCK when compared to Europe and Japan! Let’s look at some numbers that were recently published in the Economist magazine:
Germany……….64% debt ratio
France…………..65% debt ratio
Italy………………104% debt ratio!!
Japan……………171% debt ratio!!
If the US were to borrow as much as Japan relative to the size of our economy, we could be looking at total gross public debt of up to a staggering $24.7 TRILLION! This is no less than double the size of the current debt ceiling outlined in the latest US economic stimulus package.
I guess we don’t have to go out and shoot ourselves after all… (Yet)
No matter what your comparisons are in regard to US debt, the bottom line is that this country continue on an expending spree of money they don’t even have. Nothing is done to fix the housing market and financing market.
Putting a band aid on a open wound will not heal it until you closed it. Foreign investors have lost the confidence in the US treasury bond and the dollar. Americans don’t care about other countries debt ratio, they are concern with a growing socialist government with a lack of respect to capitalism.
Are you serious? When we calculate a clients’ debt ratio we divide what they earn by what they spend. Divide what our government will earn year by what they will spend and tell me what that ratio is. People don’t get loans when they’re running a deficit because they can’t pay it back.
Comparing the total output of our economy to our national debt is like comparing an autoworkers debt to the income of the entire company.