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The Chicago Tribune had an excellent set of charts this weekend in A Tsunami of Red Ink regarding US government debt and who owns it, and also a comparison of US debt to the national debt of other countries.
Debt as a Percentage of GDP
Comparison of US Debt to Other Countries
Click on the link at the top to see foreign holders of US debt country by country. The top three US debt holders are China, Japan, and the UK.
Some will not believe those figures on debt to GDP comparisons. I don't either. For starters the numbers are from 2009.
The footnote also says, if intragovernmental debt is included the figure is 83%. That number is approximately correct in my opinion (as of 2009).
Some will want to count unfunded Social Security and Medicare liabilities out to 2050 or whatever. This is simply wrong. That would be like counting a car you intend to buy 3 years from now as part of your debt now.
Many things can happen between now and then.
- You may buy a smaller car.
- You may not buy the car at all, opting for public transportation.
- When the time arrives, you may postpone buying a car for a couple more years.
- You may save enough to pay for the car in cash so that you incur no debt.
Likewise, the plans for Social Security and Medicare might change. Costs may go up, or down. The plans may be scaled back by the next generation of US citizens who think our generation was the most greedy in history.
Things We Know
- The current path and current plans are not sustainable.
- The money has not been spent, yet.
- Costs may go up or down.
- Political promises can easily change.
- Taxes may go up dramatically, to pay for the costs.
Mike "Mish" Shedlock
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