Great News! The U.S. $27 Trillion Debt Level Is Not Even Close To The Worst Debt-To-GDP in The World.

Although the rising debt level for the U.S. government is a lightning rod for partisan sniping, the $27 trillion, in context, is not near the top of countries worldwide.

A story at visualcapitalist.com expanded the thought to use comparisons with each nation’s Gross Domestic Product as a measuring tool, with consideration for various governments’ spending methods employed to hasten the recovery.

The story provided a graphic from HowMuch.net to show the debt-to-GDP ratios using April 2021 data from the International Monetary Fund (IMF).

The ranking takes into account the debt levels in terms of percentage of a country’s GDP.

The U.S., for instance, comes in at 133 percent.

Here are the top 10 countries in government debt with regard to the context of debt-to-GDP, along with their 2019 and 2020 values.

Rank (2021), Country, Debt-to-GDP (2019), Debt-to-GDP (2020), Debt-to-GDP (April 2021)

1,  Japan, 235%, 256%, 257%

2,  Sudan, 200%, 262%, 212%

3,  Greece, 185%, 213%, 210%

4,  Eritrea, 189%, 185%, 176%

5,  Suriname, 93%, 166%, 157%

6,  Italy, 135%, 156%, 157%

7,  Barbados, 127%, 149%, 143%

8,  Maldives, 78%, 143%, 140%

9,  Cape Verde, 125%, 139%, 138%

10,  Belize, 98%, 127%, 135%

Source: IMF

The effect down the road is anybody’s guess.

According to the visualcapitalist.com story:

“Japan’s debt-to-GDP ratio first surpassed 100% in the 1990s, and in 2010, it became the first advanced economy to reach 200%.

“Such significant debt burdens are the result of non-traditional monetary policies, many of which were first implemented by Japan, including zero-interest rates, then adopted by others.”

Government borrowing, clearly, is common and opinion is split as to whether that will lead to higher interest costs in the long run.

At the heart of the matter, the story concludes, is how long the world’s central banks can keep interest rates at near-zero levels.

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