Deeper into Debt
I was over at Digg this morning and ran across an article titled Nations in Debt: It’s bad and getting worse from the CreditCave blog. The article is very well researched - but I cannot agree with the conclusions. The basic argument is that the United States has huge amounts of debt - especially when compared to other countries. Well, yes - the US has some big numbers when it comes to the national debt - $9 trillion dollars. This did not surprise me . What did surprise me was the Japan has an $8 trillion dollar national debt.
Let’s do a couple of comparisons. The US has a growing population - Japan’s population is declining and growing older much more rapidly than the US. The US economy is well over $12 trillion a year - as measured by GDP. Japan’s GDP? Under $5 trillion. So, Japan’s debt represents over 160% of their GDP, while the US has about a 75% debt-to-income ratio. I would suggest that is quite a difference and much more important than the raw numbers $9 and $8 trillion.
There are a lot of other well written articles over at CreditCave, so take a look - but engage the author when you don’t fully appreciate his position!
