In the United States, a highly controversial issue right now is the debt ceiling limit.
The current debt ceiling of the US, set by law, is $14.3 trillion. According to the United States Treasury, this limit was reached in May 2011 and, if the limit is not raised, the US could fulfill all its obligations only until August 2, 2011 — less than a week from now.
Thus, the US government insists, the debt ceiling must be raised in order to avoid damaging repercussions to the US economy and, consequently, to the global economy. Not raising the limit would result to a drastic reduction in the country’s spending and a possible default on its loan obligations.
At $14.3 trillion debt as of May 2011, the United States has the biggest external debt among all countries worldwide. The United Kingdom is second with $8.98 trillion, while Germany follows next with $4.71 trillion.
External Debt refers to “the total public and private debt owed to nonresidents repayable in internationally accepted currencies, goods, or services.” Simply stated, external debt is the combined total debt or loan of the public (government) and private sector, payable in a foreign currency.
The list of selected countries with their total external debt is shown below.
TOTAL EXTERNAL DEBT OF SELECTED COUNTRIES
|Rank||Country||Total External Debt (in US Dollars)||As of||% of GDP|
|1||United States||14.3 trillion||16 May 2011||95%|
|2||United Kingdom||8.98 trillion||30 June 2010||400%|
|3||Germany||4.71 trillion||30 June 2010||142%|
|4||France||4.70 trillion||30 June 2010||182%|
|5||Netherlands||3.73 trillion||31 December 2009||471%|
|6||Japan||2.44 trillion||30 September 2010||45%|
|7||Ireland||2.25 trillion||30 September 2010||1,103%|
|8||Norway||2.23 trillion||30 June 2010||538%|
|9||Italy||2.22 trillion||30 June 2010||108%|
|10||Spain||2.17 trillion||30 June 2010||154%|
|11||Luxembourg||1.89 trillion||30 June 2010||3,443%|
|14||Australia||1.17 trillion||31 December 2010||95%|
|15||Canada||1.01 trillion||30 June 2010||64%|
|19||Greece||532.9 billion||30 June 2010||174%|
|22||China||406.6 billion||31 December 2010||7%|
|28||India||237.1 billion||31 December 2010||15%|
|30||Indonesia||196.1 billion||31 December 2010||28%|
|42||Thailand||82.5 billion||31 December 2010||26%|
|44||Malaysia||72.6 billion||31 December 2010||31%|
|47||Philippines||59.78 billion||30 September 2010||32%|
Another debt statistic that is of utmost importance is the country’s level of public debt. Public debt is the “cumulative total of all government borrowings less repayments that are denominated in a country’s home currency.” In layman’s terms, public debt is the total loan amount of the sovereign state’s government.
Comparing the level of public debt with the country’s Gross Domestic Product (GDP) produces the Debt-to-GDP ratio. A low debt-to-GDP ratio indicates that the county’s economy is generally healthy because it produces a large number of goods and services that are high enough to pay back its debts.
Below is a table showing the public debt-to-GDP percentage of selected countries.
PUBLIC DEBT OF SELECTED COUNTRIES AS A PERCENTAGE OF GDP
|Rank||Country||% of GDP||As of|
|2||Saint Kitts and Nevis||185.0%||2010|
Source: The World Factbook, US Central Intelligence Agency