Later On

Comparing national debt among developed nations

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1. You shocked me for a minute as I looked at the graph. on pondering i came to the sudden realization that we are not that bad compared to many countries in Europe or combined as the EU, so no wonder everyone is worried about Europe and well yes, the USA too.

   Unfortunately my optimism was short lived as i went to a number of websites to confirm what my suspicions were on actual estimates (can there be such a term?) on US 2010 GDP. The numbers seem to suggest that 2010 GDP hauled in about 14.7 trillion dollars and as we all know our current Debt is hovering at about 14.3 trillion.

   Would that not put us closer to the top 5 or top 3 nations with the highest GDP:Debt ratio ? or about 97%

   I have never been good with numbers and noticed that you are far beyond what i or anyone else around me could aspire to be so what is about the numbers above and then in the media reading that we owe in debt 43% on every dollar, that figure also does not match up.

   Anyway, if there is a simple explanation to all this it would be appreciated.

   

   Nick

   26 July 2011 at 6:14 pm
2. Nick – I am no expert, either, but I think I can help with the 43% comment. What ;we have here is an apples-to-oranges comparison. The 43% number is NOT comparing spending to GDP of approx $14 trillion.. Rather, it IS saying that 43 cents of every dollar the US government spends (some $3.7 trillion in the 2011 federal budget) is borrowed money. Note that government spending is NOT part of GDP, which means “gross domestic product,” basically defined as the total value of goods and services produced by the domestic US economy. Govt spending and GDP are two entirely different things.

   

   Craig

   26 July 2011 at 10:32 pm
3. Craig, thanks so much ! your explanation hit the mark and boy oh boy, that’s a lot of money borrowed against revenue coming into government coffers. Really appreciated, thanks again !

   

   Nick

   27 July 2011 at 8:42 am
4. As noted, approximately 1/3 of what John Boehner reports as US debt is money that the government owes itself (e.g., lots of Social Security revenue from payroll taxes was “borrowed” to finance the totally unnecessary war in Iraq—that money was in effect taken from one government account (Social Security) and moved to another (Department of “Defense”). Of course, citizens had the understanding that their Social Security contribution would pay for Social Security. So 1/3 of the debt the government can, in effect, write off (at great cost to its citizens, but the current Administration and Congress seem to have little concern with that). That still leaves 2/3 of the total as “real” debt that must be repaid to our creditors, though apparently the GOP sees little need for that: they’re perfectly willing to renege on US debt payments.

   Obama’s willingness to slash Social Security, Medicare, and other such programs are probably because he wants to get rid of a chunk of the debt—the part the government owes to itself.

   And, as the linked article reports, the fact that Congress can’t get it together to raise the debt ceiling again (which they had no problem in raising 6 times while George W. Bush was president), how are they going to face and solve the problem of trying to have (a) no tax increases and (b) continued social programs. That cannot be done, but Congress won’t face facts. Nothing new there, of course. Look at how adroitly they’ve handled global warming.

   

   LeisureGuy

   27 July 2011 at 9:39 am

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