|Country||GDP (2010 est.)||Debt as percent of GDP (2010 est.)|
|United States||$14.6 trillion||92.7|
|United Kingdom||$2.3 trillion||76.7|
As we head toward a solution to the debt ceiling crisis – or to economic Armageddon – I thought it would be interesting to see how the total debt of the U.S. compares with the total debt of other major nations. (The total debt includes the amount of treasury securities held outside the government plus obligations for programs like Social Security.)
The U.S. total public debt, which will reach $14.3 trillion any day now, is the highest in the world. When put in the context of total debt as a percentage of gross domestic product, however, there are other nations in even worse shape.
The chart above shows how the U.S. stacks up against the other countries in the Top 10 for gross domestic product. As you’ll see, Japan and Italy hold the dubious distinction of outranking the U.S. on debt as a percentage of GDP. China, on the other hand, is in far better shape.
At present, our gross domestic product is about 2.5 times larger than China’s. That nation has a long way to go, but it has made spectacular strides in a short period of time. If we’re to stay competitive, we must reduce our debt as a percentage of GDP in the long term.
The world still counts on the almighty dollar for economic stability. It’s the height of folly to underestimate the impact that defaulting on our obligations would have. Let’s hope our leaders in Washington have the eyes to see that simple fact before they do something foolish.
The source of the data is the IMF World Economic Outlook Database from October 2010.