United Nations of Debt: Visualizing $63 Trillion in Global Debt by Country

Jeff Desjardins, the Visual Capitalist posted a nice chart of global debt on his website on Friday. I added lines in blue to group the Eurozone countries for comparison purposes. Poland is not on the Euro, but rather the Zloty. Clean boundaries were visually difficult in a single shape.

US is the leader in global debt with 31.8% of the IMFs's estimated $63 trillion in total debt.

Debt Top Five

Charts from the Visual Capitalist .

On a Debt-to-GDP basis the US does not look so bad and China looks downright good. But that assumes you believe China's reported GDP and it also assumes you do not count unfunded liabilities in the US.

Mike "Mish" Shedlock

Comments (19)
No. 1-19
Medex_Man
Medex_Man

Behold the epic failure that is neo-keynesian monetary policy...

Medex_Man
Medex_Man

The US number, as Mish said, ignores at least another $70 trillion in unfunded liabilities / promises that will never be kept.

Japan's debt numbers have only increased over the last 27 years, while its medium cities turned to ghost towns, demographics went from bad to worse (not enough children to even maintain population), and Japan's "leadership" has turned fukashima into a radioactive dump for the next 4000 years.

China's numbers do not include an Enron like dependence on "off balance sheet" financing that isn't really off balance sheet at all. "Social harmony" (aka Tienamen square like rebellion) means all the shadow bank debt is really Bank of China debt. And their UST are worthless since Uncle Sam cannot (is not able to) keep promises to US voters never mind foreigners.

Italy's numbers are not believable either. The Italian people don't trust Rome and consider tax evasion as their national sport.

And France, when their comical military isn't surrendering, is so anti-business its a wonder anyone was actually dumb enough to lend to them.

It won't get better until the whole G7 admits that Keynesian policy is just plain stupid at its very core.

Realist
Realist

Nice presentation. The USA is #1 in debt. And Trump will increase it dramatically! Go USA! How long before Social Security cuts begin? After all, someone has to pay for those tax cuts for the wealthy.

pgp
pgp

This doesn't include private debt to GDP which in Australia for example is near the highest in the world. The governments may be broke but if the people don't have any money because they're hocked up to the eyeballs the effect on banking and economics may be worse.

RobinBanks
RobinBanks

I agree pgp. Private sector debt is much bigger and more important. Private sector debt in China since 2008 has grown the fastest in the history of economics and Australia is one of the highest in the world.It was the changes in private sector debt, not government debt, that led to 2008.

Advancingtime
Advancingtime

It is difficult to ignore that China's central bank has warned extreme credit creation and trouble in the shadow banking system could lead to a full-blown financial crisis. In response, they continue pumping out liquidity. Also, please note that Japan currently leads the way in a new central bank experiment to ignore debt and print their way to glory by using the money they print to purchase equities.

By doing so Japan is in effect nationalizing companies and transferring ownership from the private to public sector. Together these two large economies are distorting markets everywhere. More on this subject in the article below.

2banana
2banana

The most fiscally responsible developed country in world?

Russia.

WildBull
WildBull

Realist: High taxes are good for the wealthy, and here is why. First, discount the BIG LIE that income = wealth. Wealth is accumulated assets, NOT CASH FLOW. But, to accumulate assets you must have an income stream in excess of your spending. If the average Joe is saving 5% and his taxes go up 5%, his saving goes to zero. If Al Gore's taxes go up 15% while Joe Sixpack's taxes only go up 5%( Yeah, lets sock it to the wealthy). Al still has a very large chunk of income available to purchase assets, while his competition from the little guy is wiped out. And, because there is less competition for said assets, he gets them at a relative discount. Believe what you want, but high taxes benefit the already rich while they gut the middle class.

Webej
Webej

This overview is BS:

Webej
Webej

For the following reasons:

  1. The amount of <B>private debt</B> in the economy is much more important than government debt (Spain had low debt:GDP but was one of the hardest hit by the GFC because of mortgage debts; Greek debt:GDP was lower than that of the US at the start of the GFC, but they didn't have enough tax revenue to service it).
  2. The calculation of government debt is always <B>apples to oranges.</B> For instance, US govt debt only counts the federal debt, leaving out state and local debt, as well as contingent liabilities such as Freddy, Sally en Ginnie. In the EU, for instance, the debt is calculated in terms of a consolidated balance that includes lower forms of government and other public liabilities.
  3. The GDP:debt ration is not the most important metric. <B>Revenue:Debt is far more telling</B>. Debt are serviced from your income, not from your turn-over. Revenue:Debt rations for the US fed govt are around 600%, more than double that of most European nations.
theOtherRight
theOtherRight

That Japan's debt is largely held domestically is irrelevant. Each debt involves a borrower and a lender. The lender expects to be paid back. If Japan's domestic debt ends up being written off, the rest of the world can write off Japan as a trading partner. Think that will have any consequences? The "we just owe it to ourselves" argument doesn't hold water.

JonSellers
JonSellers

@theOtherRight: because the Bank of Japan is running a non-stop QE operation, I don't think "we owe it ourselves" really reflects what's going on. It's more like the government of Japan owes it to itself.

Maximus_Minimus
Maximus_Minimus

So...you cannot be a highly developed superpower without an astronomic debt? The debt will get worse because noone gives a damn; it is so big it defies the senses of most peeps. At some point, the owners of debt will have to write it off, and the dominoes will fall.

Stuki
Stuki

@WildBull: +1

All Activity taxation is a transfer of wealth: From those who produce (mostly middle classes), to the idle (by lack of ability) rich, and the idle (by lack of opportunity) poor.

Money printing/bailouts/asset pumping/zoning and land use laws/excessively broad interpretations of IP laws…. and the rest of the idiocies aimed at keeping asset prices high, pull in the same direction: Steal from the productive who do, to prop up the idle who don’t.

TheAntiqueSage
TheAntiqueSage

Webej's post above is correct. This chart only includes sovereign debt at the national level. Private debt levels are far more important. I suspect that China's debt numbers would look far more outrageous if shadow banking liabilities and local government debts were accounted for.

Realist
Realist

Hey Wildbull. I agree with your statement "income does not equal wealth". However, I don't know what to make of your statement "high taxes are good for the wealthy". First, you only seem to mention income taxes. But taxes can be leveed on investment income, capital, property, estates, etc. Second, define what you mean by "high taxes"; 50%, 70%, 90%? What's your number? In general, "high" taxes are rarely good for the person being taxed (wealthy or not). Finally, my post was merely about how the US government is struggling to implement tax reform, and how this relates to the discussion on US debt levels. My point was that in order to pay for tax cuts, the US debt would be going up. Later on, when debt payments become unmanageable, then the little guys trying to live on Social Security could get whacked with cuts to their Social Security.

MorrisWR
MorrisWR

Increasing debt is no surprise in a debt based monetary system.

WildBull
WildBull

Realist, my point is that high taxes hurt the middle class much more than the wealthy. First, consumption taxes are harder on lower income earners, as low and middle income earners spend a greater proportion of their income on necessities. Graduated income tax as the rates exist in the US is harder on the middle class than on the already wealthy. The limousine liberals beg for higher taxes, but that is self serving crap. (See post above) If the income tax rates are adjusted to make it also impossible for the already rich to save, what is the point of working hard and taking risks? Better to enjoy the beach. This is the problem with using taxation as a means to redistribute wealth. There is no way to do it that doesn't kill the goose that lays the golden eggs. Lower taxation helps everyone, but the bottom more than the top.

WildBull
WildBull

The US doesn't have a taxing problem. It has a spending problem. If congress continues to make promises it can't keep, it is only a matter of time before we become another Venezuela.