As the United States inches closer to its current $14.3 trillion debt ceiling, policymakers are renewing the public debate over government borrowing and spending.
Earlier this year, White House economic adviser Austan Goolsbee warned that, if the ceiling is not raised, "The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008." Many top Republicans, meanwhile, are more cautious about such an increase. South Carolina Republican Sen. Lindsey Graham has expressed cautious support for raising the ceiling, but also has advocated for decreasing government spending to 2010 levels. South Carolina's junior Republican senator, Jim DeMint, is even more hawkish on the subject, calling for the passage of a balanced budget amendment. [See a slide show of the 10 countries with the most debt.]
Even accounting for inflation, the total U.S. public debt--the amount of treasury securities held outside the government, plus federal obligations for programs like Social Security--has increased more than fourfold since 1990, when it stood at just over $3 trillion. [See the 10 states with the largest budget shortfalls.]
While the United States total public debt is indeed the largest in the world, a broader context shows that other countries face even more dire debt situations. One way to put debt in perspective is to compare it to gross domestic product, or GDP. The debt-to-GDP ratio is one primary indicator of a country's economic health; a lower ratio is generally seen as more favorable, as it shows that a country is producing enough to eventually be able to repay its debts. According to figures from the International Monetary Fund, Japan has the largest debt-to-GDP ratio in the world, with government debt more than twice the size of its GDP. Also notable are Greece and Iceland, which have both suffered major recent financial crises and both have government debts that exceed their annual GDPs. The U.S. ratio of 92.7 percent is nearly 20 percentage points away from inclusion in the top 10 countries with the worst debt-to-GDP ratios, listed below:
Country Debt as Percent of GDP (2010 est.)
Japan 225.9
St. Kitts and Nevis 196.3
Lebanon 139.0
Jamaica 135.7
Greece 130.2
Eritrea 129.7
Grenada 119.1
Italy 118.4
Iceland 115.6
Barbados 111.6
Of course, many countries with such high ratios, such as the Caribbean nations of Jamaica, and Barbados, are not among the world's economic powerhouses. A more apples-to-apples comparison is to look at the United States debt situation within the context of the other largest world economies. Among the 10 countries with the largest GDPs, the U.S. ranks third in terms of debt as a percentage of GDP, behind Japan and Italy. One major outlier on the list is China, whose 2010 GDP is estimated to be the world's second-largest, at roughly $5.7 trillion. The country's debts, however, only equal 19.1 percent of its GDP--well below the rates of nearly all other major world economies.
Country GDP (2010 est., USD) Debt as Percent of GDP (2010 est.)
United States $14.6 trillion 92.7
China $5.7 trillion 19.1
Japan $5.4 trillion 225.9
Germany $3.3 trillion 75.3
France $2.6 trillion 84.2
United Kingdom $2.3 trillion 76.7
Italy $2.0 trillion 118.4
Brazil $2.0 trillion 66.8
Canada $1.6 trillion 81.7
Russia $1.5 trillion 11.1
Even accounting for inflation, the total U.S. public debt--the amount of treasury securities held outside the government, plus federal obligations for programs like Social Security--has increased more than fourfold since 1990, when it stood at just over $3 trillion. [See the 10 states with the largest budget shortfalls.]
While the United States total public debt is indeed the largest in the world, a broader context shows that other countries face even more dire debt situations. One way to put debt in perspective is to compare it to gross domestic product, or GDP. The debt-to-GDP ratio is one primary indicator of a country's economic health; a lower ratio is generally seen as more favorable, as it shows that a country is producing enough to eventually be able to repay its debts. According to figures from the International Monetary Fund, Japan has the largest debt-to-GDP ratio in the world, with government debt more than twice the size of its GDP. Also notable are Greece and Iceland, which have both suffered major recent financial crises and both have government debts that exceed their annual GDPs. The U.S. ratio of 92.7 percent is nearly 20 percentage points away from inclusion in the top 10 countries with the worst debt-to-GDP ratios, listed below:
Country Debt as Percent of GDP (2010 est.)
Japan 225.9
St. Kitts and Nevis 196.3
Lebanon 139.0
Jamaica 135.7
Greece 130.2
Eritrea 129.7
Grenada 119.1
Italy 118.4
Iceland 115.6
Barbados 111.6
Of course, many countries with such high ratios, such as the Caribbean nations of Jamaica, and Barbados, are not among the world's economic powerhouses. A more apples-to-apples comparison is to look at the United States debt situation within the context of the other largest world economies. Among the 10 countries with the largest GDPs, the U.S. ranks third in terms of debt as a percentage of GDP, behind Japan and Italy. One major outlier on the list is China, whose 2010 GDP is estimated to be the world's second-largest, at roughly $5.7 trillion. The country's debts, however, only equal 19.1 percent of its GDP--well below the rates of nearly all other major world economies.
Country GDP (2010 est., USD) Debt as Percent of GDP (2010 est.)
United States $14.6 trillion 92.7
China $5.7 trillion 19.1
Japan $5.4 trillion 225.9
Germany $3.3 trillion 75.3
France $2.6 trillion 84.2
United Kingdom $2.3 trillion 76.7
Italy $2.0 trillion 118.4
Brazil $2.0 trillion 66.8
Canada $1.6 trillion 81.7
Russia $1.5 trillion 11.1
