Friday, June 22, 2012

The real story on government debt...

Please see the graph below that shows the breakdown of central government debt of 10 countries as a percentage of GDP. In the case of the United States, the figure used was debt held by the public. Intragovernmental debt (the debt the government owes to itself) was not included for obvious reasons. (It's ridiculous.)

So where are we, debt-wise? Pretty far down on the list.

Who has the highest debt-to-GDP ratio? Japan. They also have the lowest interest rates and just so you know...it's not because they "save" more or any other crap like that. It's because the Bank of Japan keeps their rates ultra-low in the belief that it will help the economy, which hasn't been the case for nearly 20 years. (They still don't get it.)

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