Wikinvest Wire

In one respect, Greece doesn't look so bad

Tuesday, February 16, 2010

There's an interesting piece up over at CNBC that ranks the world's biggest debtor nations in order of total outstanding external debt (as a percent of GDP) rather than the more common budget deficit (again, as a percent of GDP) and the results are rather surprising.

While the U.S. is number 20 on the list and Greece comes in at a respectable 16th place, the winner by a wide margin is Ireland where external debt totals 1,267 percent of GDP, a figure that converts to a whopping $567,805 per person.
IMAGE How is this even possible? They make the U.S. look like penny pinchers.

Instead of total external debt, normally you hear the financial media talking about the current year budget deficit and, lately, how badly Greece and Portugal are doing with their finances here in 2010. But, you'd think that maybe the grand total of all prior budget deficits along with the current one and private sector debt might be of equal concern.

The Economist magazine tallies the budget deficit data in this handy table and, there, you'll see that Ireland's current budget gap is 12 percent of GDP, just one percentage point less than in Greece where, in recent weeks, the shortfall has caused rampant speculation about the breakup of the euro currency block (well, the Greeks lying about it didn't help).

When looking at total external debt, it's not even close - Ireland at 1,267%, Greece at 161%.

Here's a table with the complete list of 20 nations from the CNBC data:
IMAGE However you look at it, that's a lot of money owed by a lot of governments countries and you have to wonder how you get from the current figures above to anything that would seem reasonable.

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Andrew said...

You're dead on! However, the United States should be number one on that list because the debt to GDP percentage is much higher than that.

We don't take into account the $56 trillion+ expenditures and liabilities, which would certainly increase that ratio. Greece is just the tip of the iceberg in this global debt crisis.

Once people realize that the United States has the greatest debt in the world and is the real problem then this economic collapse will not cease!

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Tim said...

There's no need for name calling. Yes, it's total external debt, but I'm not the one that lumped them together, though I did update the post above to make clear that this includes both public and private sector debt.

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