American Government Owes More than Any Other Country in the World
Fears of default may have temporarily subsided after President Donald Trump raised the debt ceiling until December, but uncertainty continues to haunt the markets as investors worry about America’s growing debt problem.
The United States government now owes more money than any other government in the world. America’s gross debt burden has surpassed $20.0 trillion and is continuing to grow.
The latest research carried out by Pew Research Center delivers some shocking insights about government debt around the world. For instance, in addition to having the highest sovereign debt in the world, the U.S. has a national debt nearly twice that of the next-highest national debt.
Japan takes the second spot, with about $11.0 trillion in government debt. Meanwhile, China, the most populous country and the second-biggest economy in the world, has about $5.0 trillion in debt, which is around one-fourth of America’s debt.
But that’s not all!
Pew Research finds that the U.S. federal debt is growing faster than its gross domestic product (GDP). U.S. debt as a percentage of GDP has consistently grown after the 2008 Great Recession, nearly doubling in the 10-year period. The gross U.S. debt as a percentage of GDP was about 64% in 2006. By 2016, it was 107%, rising 43% over 10 years.
The sad reality is that, instead of finding a long-term solution to the country’s growing debt crisis, the U.S. government keeps looking for quick fixes that only work momentarily, such as raising the debt ceiling every time the government approaches the tipping point.
The Trump administration is now proposing to cut corporate taxes and increase military spending, while the president remains hell-bent on building a costly border wall—which the Mexican government confirmed it will not be paying for—all of which will further fatten the liabilities side of the government’s balance sheet.
Suffice it to say, America’s debt is only heading north in the years to come, and investors have good reason to be spooked.
“5 facts about government debt around the world,” Pew Research Center, September 19, 2017.