Where would you rank the US among all debtor nations in the world? (GDP ranking source: IMF, Annual GDP source: CNBC)
1. Ireland’s debt is 1267% of its GDP, or $2.386 trillion as of the second quarter, 2009. It produces the 35th largest GDP @ $267.579 billion.
2. Switzerland’s debt is 422.7% of its GDP, or $1.338 trillion as of the second quarter, 2009. It produces the 21st largest GDP @ $500.260 billion.
3. The UK’s debt is 408.3% of its GDP, or $9.087 trillion as of the second quarter, 2009. It produces the 6th largest GDP @ $2.680 trillion.
4. The Netherlands’ debt is 365% of its GDP, or $2.452 trillion as of the second quarter, 2009. It produces the 16th largest GDP @ $876.970 billion.
5. Belgium’s debt is 320.2% of its GDP, or $1.246 trillion as of the first quarter, 2009. It produces the 20th largest GDP @ $506.183 billion.
6. Denmark’s debt is 298.3% of GDP, or $607.38 billion as of the second quarter, 2009. It produces the 28th largest GDP @ $340.029 billion.
7. Austria’s debt is 252.6% of its GDP, or $832.42 billion as of the second quarter, 2009. It produces the 14th largest GDP @ $1.013 billion.
8. France’s debt is 236% of its GDP, or $5.021 trillion as of the second quarter, 2009. It produces the 5th largest GDP @ $2.867 trillion.
9. Portugal’s debt is 214.4% of its GDP, or $507 billion as of the second quarter, 2009. It produces the 37th largest GDP @ $244.640 billion.
10. Hong Kong’s debt is 205.8% of its GDP, or $631.13 billion as of the second quarter, 2009. While not an independent nation, it produces the 41st largest GDP @ $215.354 billion.
11. Norway’s debt is 199% of its GDP, or $548.1 billion as of the second quarter, 2009. It produces the 24th largest GDP @ $451.830 billion.
12. Sweden’s debt is 194.3% of its GDP, or $669.1 billion as of the second quarter, 2009. It produces the 22nd largest GDP @ $478.961 billion.
13. Finland’s debt is 188.5% of its GDP, or $364.85 billion as of the second quarter, 2009. It produces the 34th largest GDP, @ $271.867 billion.
14. Germany’s debt is 178.5% of its GDP, or $5.208 trillion as of the second quarter, 2009. It produces the 4th largest GDP @ $3.673 trillion.
15. Spain’s debt is 171.5% of its GDP, or $2.409 trillion as of the second quarter, 2009. It produces the 9th largest GDP @ $1.602 trillion.
16. Greece’s debt is 161.1% of its GDP, or $552.8 billion as of the second quarter, 2009. It produces the 27th largest GDP @ $357.548 billion.
17. Italy’s debt is 126.7% of its GDP, or $2.310 trillion as of the first quarter, 2009. It produces the 7th largest GDP @ $2.314 billion.
18. Australia’s debt is 111.3% of its GDP, or $891.26 billion as of the second quarter, 2009. It produces the 14th largest GDP, @ $1.013 trillion.
19. Hungary’s debt is 105.7% of its GDP, or $207.92 billion as of the first quarter, 2009. It produces the 52nd largest GDP @ $156 billion.
20. USA’s debt is 94.3% of GDP, or $13.454 trillion billion as of the first quarter, 2009. It produces the largest GDP @ $14.441 trillion, almost 25% of global GDP. The next highest is Japan, at $9.5 trillion less, followed by China, at more than $10 trillion less.
Surprised?
Let’s put this into context. Let’s move a couple of zeroes and turn the US into a person. This person earns $134,540 per year. She owes $125 thousand on a mortgage and $1871 on her car. Would you consider this person in an unreasonably high debt level?
Next year, she will take out an equity loan on her home for $14,573. This will increase her level of debt to $141,444 (assuming she pays only the interest on this debt during the prior year). Now she owes 105% of what she makes. Do you consider this person in an unreasonably high debt level?
At this point, compared with other nations we are 20th as a debtor. Historically, in 1944, our debt to GDP was 91.45%, in 1945, 115.95% in 1946, 121.2% in 1946, 105.77% in 1947, 93.72% in 1948, and 94.56% in 1949.
In 1949, the S&P 500 Index grew 18.79%. In 1950, it grew 31.71%. In 1951, it grew 24.02%. In 1952, it grew 18.37%. In 1953, it fell by .99%, and rose 52.62% in 1954. Not only have we been at these debt levels before, but we grew handsomely after that period.
I’m not saying that I think debt is a good thing. I don’t. I think it should be avoided, unless absolutely necessary. But, I do think that the “we can’t afford it” manta must be put into perspective. If the policy issue is critically important, we can afford it.
The question should be whether the policy issue is critically important.
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i use a combo of shea butter and aloe vera moisturizer. Works great. I use shea butter on my lips, around my eyes and nose (dry areas), My father swears by vasoline.
p.s. I dropped your name on Gina's post, Barb. ;)
I’ll simplify this: One day I was shopping for produce and grumbling to myself about the prices on fresh foods. An older lady noticing this said: “My dear, you can buy the vegetables at this price OR you can pay for the doctor later for the ailments you’ll have for not eating this stuff. What do you think will be cheaper and better?” She walked away and I bought the veggies.
If we don’t find a way to afford it now, then we will Definitely be paying to try to Doctor it up later!
You were smart for listening to the older lady. Great synopsis, Audrey. Thank you!
Do you think the health care / insurance problem causes many not to start a business for fear of a health crisis?
The cost of health care is rising at 12% per year for businesses, individuals and the government. Since health care costs are now 16% of our Gross Domestic Product, that means that, in 10 years, health care will be half of our GDP if we do nothing.
To your point, however, the longer we fail to address this crisis, the more we risk businesses outsourcing labor to countries where this cost is not such a major issue.
A trade for cost to business to pay for medical in it’s current form to the payment from taxes for the current system is no change. The cost of our medical system is the problem. Unless we stop the get rich quick system we have now it is just moving cost from one pocket to another. The same amount of money will be needed as is needed now. It is all about the cost of everything in medical from services to drugs to products and the people working in it.
Cost has had an effect on my business and not a good one. The cost of 16% is an average. For a business with older workers the cost is much greater. Of course if we throw the over 50s out the window that would bring cost down a lot. That is happening. Hiring for over 50s is not good but firing is very high. Our aging population is going to put a big pinch on everybody.
The current bills are not going to do anything but bring the cost up. If you give services to those who have none now they will use them. Those who have them now will not use less. More use will always cost more than less use. There are few winners in the Washington ideas.
It is now and will always be the cost not who is paying for it.
This article http://article.nationalreview.com/?q=NDdjZjgwNmU1OTFhYzE2OGQ3YTRmODBlNTY0MjA5YjA= , based on information from the Cato Institute, shows health care cost projections at 9.95% annual increase based on current legislation. Kaiser projected health care costs to have risen 11.96% annually from 2000 – 2007. A 2% decrease in cost acceleration is an improvement, but not sufficient to address the problem.
Predictions are always wrong. Estimates never are true. Governments make the numbers say what they want and so do Cato folks. Truth is not easy to find and impossible to know in a future time.
Still none of what is said in this article is about what would work since that is not known by any person or group.
Businesses and individuals will pay a price since we are addressing who pays not what it cost. If everybody can use everything then everybody will.
I have no insurance and know first hand the cost which is 30% higher for the same service the insured get. Doctors rarely give the self pay the same price they charge the insurance companies. Unfair is what life is.
The cost is not being thought about because third party payment means the end user never knows what the service costs.
Hi idosew, and thanks for your comment. I respectfully disagree with your conclusion that predictions are always wrong and estimates are never true.
I certainly understand that many have become cynical about having data skewed to favor a particular point of view, and acknowledge that happens often, particularly when the data are promulgated by an industry or entity that has a vested interest in the conclusion. However, I have found that we have amassed a sufficient amount of history with which to draw parallels that prove true in a statistically significant way, and there are those who make unbiased data available.
I also acknowledge that all conclusions are just a matter of probability, but Warren Buffett has consistently outperformed the S&P 500 average over a very extended period of time, and certain economic indicators point to outcomes that are true a statistically significant percentage of the time on which a few economists (such as Paul Volker, Barton Biggs, Byron Wein and others) have provided very reliable conclusions.
I will agree, to the extent that predictions are rarely provided without an agenda, that you have a right to be skeptical. But all data are not false in my opinion. What is difficult is to find those who have no agenda to serve with that data.
I agree with your statement that more people insured will cause an increase of services used. But I have to disagree with your conclusion. The more people who use the services, the more people we will have getting early direction in proper health maintenance and early diagnosis. It also would bring healthy people into the risk pool, who would not contibute more than maybe a yearly exam cost. This brings acute care costs down. It all goes back to the earlier post’s analogy. Pay a little more for the costly veggies now or pay a lot later for the illnesses that could have been prevented by eating those veggies. Additionally, we would not actually be “giving” people insurance, just subsidizing. There are many other avenues for bringing costs down included in both bills. And many hidden costs today that are related to our failed health insurance system, that would be eliminated.
My husband has a small business with 2 others. Due to technicalities, they can’t even get group insurance that is not prohibitively expensive, due to medical underwriting. Changes proposed in both bills would allow us to get group insurance, at a lower rate collectively. So the other partners’ healthy wives could leave their menial jobs they hold, only to maintain insurance, and contibute to the company’s productivity. This would allow us to bring costly outside services in-house. (We are on a pricey, but affordable, individual policy I converted to from my previous employer, that has no pre-existing exclusions. Otherwise, I would still be working for coverage too. )
You have much more faith in individuals wanting to do what will make their lives healthy than I do. One of my daughters works as operations director for some dialysis clinics. There is an endless supply of customers even thought most die after a year or two. Look around at us. Few have healthy habits. Even fewer care. That has nothing to do with who gets health advise. It has to do with ones personal want for good health. Much information is available now if one really wants to know how to lead a healthy life.
Thank you for the concise explanation. I agree with your statement about what the policy question should be. However, my worries arise when I consider the following: Given that we all prioritize based on our own beliefs/experiences/situation and given that life is basically unfair, who gets to decide what’s critically important/fair?
Another thing I would like to know about the debt is, to whom do we owe it? As in all debts, the debtor is at the mercy, so to speak, of the lender. In other words, how much influence could our lenders have on our nation? After all, budgets/economic sanctions are how governments promote their agendas. (one recent example was when the US whithheld money from Honduras because of their political situation). Being originally from a communist country, the thought of China holding a lot of our debts is not exactly comforting to me.
Thanks for starting this discussion.
Great questions, Olga. To your first point, who decides what’s critically important/fair, right now, I’m afraid, the discussion is being led by the lobbyists for the insurance industry. According to Open Secrets, a non-partisan group referenced recently in an article by the Wall St. Journal, it is that industry who far out-contributes any other for the ear of our Congressional representatives. If we don’t like what our representatives are doing, we can aggregate our voices as their representatives and tell them so by sending them an e-mail. You can find your Senators and Representatives here http://www.visi.com/juan/congress/
As to your question regarding to whom we owe our national debt, as of the second quarter of 2009, China owns $776.4 billion of the $13,454 billion (5.7%), Japan, $711.8 billion (5.3%), UK $214 billion (1.6%), Oil Exporters $191.2 billion (1.4%). Foreign governments own 25% of our debt. Source: US Treasury http://www.treas.gov/tic/mfh.txt
United states citizens and corporations own the remaining 75% through Treasury Bills, Treasury Notes and Treasury Bonds.
Thanks so much for your thorough explanation. With respect to health care, my response to your original question is: Can our nation afford not to reform? I saw a documentary-it was over a year ago and I can’t remember the name-about children without insurance in this country. Their parents had no choice but to take them to the ER with an ear infeciton, which apparently costs about $500, instead of an office visit to a pediatrician, which is much less. So, all of us who do have health insurance are paying for this now, and paying too much-the services could be delivered at a lower rate.
Hi Jenniep, That is precisely the type of response that I think is appropriate. It is a) in thoughtful consideration of the next generation; and b) a conclusion that, to do nothing is unacceptable.
The goal of improving the cost of health care delivery is indeed vital. Good points, all.
I live on less than 1500 per month. The state provides assistance only after I pay over 850 per month. Boy are you really paying for me!!!! I have diabetes and I am bipolar. I cannot afford to see a doctor and I cannot afford medicine. So I guess your idea is to let all people like me, disabled go without medication or medical treatment so we die and get off the payroll?
I’m sorry I wasn’t more clear in my post. I support healthcare for ALL Americans-I just don’t think the current system is working. My point was that we can give everyone health care that would cost less. Because people don’t have access to doctors or medicine, we are actually paying MORE for services. I think the services could be provided to everyone for less money that we pay now. Our insurance premiums are higher because the system doesn’t cover everyone now-some people are forced to go the ER because they can’t afford a visit to a doctor. That’s wrong, in my opinion-all Americans have a right to a defense attorney and all Americans should have a right to a doctor and medications.
Thank you for your answer and the links.
I don’t disagree that something needs to be done, my question to you is, does it have to be government run, and more importantly, does it have to cost this much? (Full disclosure here, I lived throught the Castro revolution as a child in Cuba and still have family there. As a result, I am very leary of anything that even smells of individual freedoms being erroded and of government controling any part of my personal life. Additionaly, I worked for state run mental health services for 30 years and know that gov’t is not any better at providing care. In fact, in a way it is worse, because politicians are constantly involved.). Why do we believe that government can do better when it is obvious from this legislative process that it is all a matter of deals for votes. One day something’s in, the next day it’s out. IMHO, the current push for reform is not about providing quality, affordable healthcare, but about assuring [buying] a future voter base for maintaining power.
To help in the discussion, I would like to share with you the following link in which the Cato institute puts forth a free market solution (and it’s less than 20 pages long –lol):
http://www.cato.org/pub_display.php?pub_id=10646
Look forward to your thoughts.
Thanks, Olga. I am a long standing supporter of the Cato Institute, and think many of their solutions innovative and cost-effective. I appreciate you providing this link, as well as sharing your powerful past experiences that shape your opinion. It is valuable perspective to all of us.
As regards my personal opinion, I try to provide accurate, unbiased information about the economy and its effect on women (and vice versa). In doing so, I am hesitant to give an opinion, as I think it should be irrelevant to my reader. I try to give information to others to form opinions, and provide a sounding board for whether the opinion is a rational conclusion from that data.
Thanks again for a thoughtful, insightful and powerful comment, Olga. All the best to you.
WOW! I had no idea how we placed in the world.
I think I am fairly well informed but it just shows how hard it is these days to know important facts about our country and the rest of the world.
It makes me feel alot better, I am not going to worry and will put this in perspective.l The talking heads are so biased. Glad I read your post. I supported Obama and want people to get jobs and health care.
Thanks for your comment, duckyone59. Unfortunately, I think there are plenty of reasons to worry, and have discussed the other side of this issue in this article, which I hope you read http://www.vibrantnation.com/our-blog-circle/financial-planning-for-todays-woman/can-the-nation-afford-it—-part-two/
A high level of debt is a very bad thing. We must be extraordinarily careful as a nation, just as we must be as individuals, to be very judicious about the amount of, and purpose for the debt we incur.
My point in this article (and the one that follows), is that the extremist viewpoints in the press are not put in proper perspective.
Again, thanks for being part of the discussion.
Why do we allow companies such as wamart to avoid paying for their lowest paid workers healthcare needs. These needs are then paid by the taxpayers while this company makes billions in profit. If companies do not want to, or in the case of small businesses, cannot afford to, pay for health care, a portion of the profits should go to pay for a government plan
While I can understand that libertarians and Republicans may not like this plan, it would be in their economic interest and allow them to compete more effectively with companies such as japsn snd germany,
Also in your analyst of our standing in the world with regard to our dept. Do you believe that the fact that we waged a war with no allocated budget contributed to our low standing.
Hi PennyLane,
Interesting that you should ask that very important question. Until this summer, I shopped a lot at Walmart and then they decided to “remodel” !! Not only did they take out my favorite fabric center but they quietly slipped in many products “made in China”!!! I have been totally shocked that they do not offer “made in the USA” anymore. It was actually the motto when they first got into our area, I believe.
The change over has taught me that we have a lot of locally owned merchants who do offer USA products and a some great values. It seems to me that Walmart has us “brainwashed” into going there and it is time we took a look around.
It is scadalous that they have the nerve to work our local people without offering health insurance!! Maybe we should start a boycott of them, what do you think?
Jo Anne Morris
I joined the boycott several years ago, I only go their to use their bathrooms.
For the sake of accuracy, they do offer health insurance but most of their minimum workers cannot afford it. They also make sure that many of their workers are not full time and then it is hard for them to qualify.
I tried to address this issue in a previous article http://www.vibrantnation.com/our-blog-circle/financial-planning-for-todays-woman/a-woman-s-world-economic-view/#reply-26153 and would be interested in your reaction to it. It boils down to a decision of cheaper consumer prices on imported goods vs. higher prices for domestically produced items, and in the long term, a retraining of our work force to qualify for higher paying jobs, no?
well that is definitely true but we will always need salespeople etc. to run our retail industry and they deserve a decent living, especially when they work for the rone of the richest companies in the world. Only unionization (I know its a nasty word to libertarians, my son is one) will help us.
I apologise I have not read your article in depth yet, will do later but did you memtion the unfairness of the taxpayer picking up the tab for their workers who cannot afford healthcare.
Only after they were sued by the state of California for not offering insurance because the state was paying for so many of their workers to have health insurance through state run program there.
I’m confused by why you object to products made in China. We live in a global economy. We are struggling to come out of a global recession, which was close to depression in many countries. The Asian market has out paced our market during this recovery. Some of the sectors in the European market are doing very well-better than some of ours. Brazil is booming. The American economy is now, through the global market, dependent on the world wide market place to purchase our products. China will be (or already Is) the largest, most diverse market on the globe. The citizens of China, especially the younger, educated citizens are buying American made products in record numbers. They see our culture on TV and the internet and would like to own some of our technology, fashion, ect. -we’ve bought a lot of theirs. It puts hard-working, family oriented, regular American citizens, to work. We all know that we have the best work force on the planet. We care about our families and providing for them. We can no longer sell all our products only to Americans. Maybe we could at one time-but not any more. To advocate being opposed to Chinese products is harming our ability to sell our products on the open market. There are so many hard-working Americans that are currently unemployed and one of the shining lights at the end of the tunnel is the Chinese population. They are forging forward into the purchasing of “things” that we take for granted and manufacture here on American soil. We set the standard for the “Best”. They want our goods.
I would appreciate anyone explaining to me why we should be focused on buying only American products.
Hi Jeanniep, and thanks for your question. Some of the issues raised with buying foreign products are based in the equality of standards, from safety (e.g., lead paint in children’s toys) to safe working conditions (e.g. child labor, living wages, etc.). Many bring up the point that the US provides standards for workers and the environment that other countries do not, causing jobs to be shipped overseas. On the other hand, many argue that such unskilled jobs are ones that we can afford to lose, and we should re-train our workforce to qualify for higher skilled positions for which we are competitive on a world-wide basis. Both sides have valid arguments, and both sets of solutions have difficult problems.
What are your thoughts?
What a thought-provoking question, pennylane100! I do think that the low interest rate policy in the last decade under the Greenspan Fed, allowed both excesses in the banking system and cash in the economy that made it easier to justify a war than it would have been had the nation been under a gold standard, with a (relatively) stable dollar. That would necessitate taxing the citizenry for the cost of the war, which would, in my opinion, caused a much more rigorous debate.
Fascinating question. Thank you for raising it.
If you get down to the bottom line on anything a government does, it is really about what the tax payer is willing to pay since the government has no money. Of course they do have a printing press. Stable governments happen when there is a large middle class in a country. We are squeezing the middle class out. They are more moving to lower income brackets. The wealthy are never hurt badly. They also rebound in ways lower classes can’t do because money is power. If you have no money you have no power. Laws that are made are always in favor of the powerful, i.e. rich.
We should all have to read or reread ”The RoadTo Serfdom” by Hayek. It is the best way to understand why government spending always hurts more than it helps. The only thing you can really hope for from your governmnet is to make laws that will stop unfair competition, whether international or internal. We no longer have statesmen in government. We have power hungry people seeking wealth thus power running for office or being appointed.
Can we afford any of this..maybe if we want much higher taxes.
we could have afforded this twice if it were not for the bush doctrine.
Thank you, thank you, thank you.
You raise an excellent point, idosew. The government has no money. We the people fund our federal government and therefore it is our House of Representatives that must approve any expenditure for which we must pay. It is up to all of us that our represenatives know that it is to us – not lobbyists – to whom their loyalties must lie. Thanks for being a part of the conversation.
It is not an option in my opinion, healthcare is not only a public policy issue but a huge economic issue for this country. If we don’t do something to change the system then it will be unsubstainable at all in the near future. It’s strange to see people who “have something” like insurance call for change because usually if you have it you are not worried about other who don’t. I think most of us, if we have done our research and listened to both sides of the argument know that while we cannot do a 180 overnight, we do need to start taking steps – pretty large steps to make healthcare affordable and take it out of the hands of a few for-profit insurance companies (one a few in my state) and make it more competitive. Just because you deny a problem doesn’t mean it doesn’t exist and the chickens do eventually come home to roost. I think Americans are seeing this now with the economy.
Thanks, Pamela, for your thoughtful conclusion.
The problem is that ANYTHING the government tries to control INCREASES the cost and DECREASES the service. Why would healthcare be any different from any other government program. We have historical perspective – why do we ignore it and hope for a cure…or reform?
You make a good point, Sassy Senior. The problem is, that health care is currently 16% of our GDP, and growing at 12% per year. At this rate, in 50 years, it will be half of our GDP, and will bankrupt our nation. With a problem of this magnitude, we must take some action. What would you propose that we do?