The United States has an official national debt of a mind-boggling $18.93+ trillion.
The national debts of other countries are even worse. The debt-to-GDP ratio is a measure of a country’s debt compared to its economic output, which is calculated by dividing its national debt by its GDP, which is the total output of all goods and services of a country and is the primary measure of economic growth or the lack thereof. To illustrate, if the national debt is $1.5 million and the GDP is $1 million, then the debt-to-GDP ratio is:
$1.5m ÷ $1m = 150%
Here are the top 7 worst countries in debt-as-a-%-of-GDP, as of September 2014 (Forbes):
- Japan: 227.2%
- Greece: 175.1%
- Italy: 132.6%
- Portugal: 129%
- Singapore: 105.5%
- USA: 101.5%
- Belgium: 101.5%
When your debt exceeds your GDP, the prospects of ever paying off that debt are near non-existent, unless the country experiences a sudden and enormous burst of economic productivity. The debt situation is so dire that in 2013, the International Monetary Fund (IMF) recommended to indebted governments not just higher taxes, but confiscation of citizens’ assets. More perversely still, the IMF’s recommendation of assets-seizure is intended merely to make the national debt “sustainable,” not to actually pay off the debt.