Discuss Question 6
6. FISCAL KNOWLEDGE: The total government debt in the United States (federal, state, and local governments combined) measured as a percentage of the economy, is higher than many of the European nations currently facing serious debt challenges.
ANSWER: True – According to the most recent data available from the International Monetary Fund (IMF), published in September 2011, the United States has higher levels of total government debt (federal, state, local combined) as a percentage of the economy (GDP), than many European countries that are experiencing serious debt challenges. Total U.S. government debt was approximately 120% of GDP, higher than estimates for Portugal (110%), Ireland (113%), France (95%), & Spain (76%). Total debt for the U.S. is lower than Italy (131%), and Greece (166%). While the total debt is higher than some of the European countries, the U.S. is certainly helped by the fact that we have the world’s largest economy as well as the world’s largest reserve currency. However, we are not exempt from the laws of prudent finance, and absent reform, we eventually will experience serious debt challenges similar to the above mentioned European countries. For more information on how the U.S. compares to other countries in terms of Fiscal Responsibility and Sustainability, view the Sovereign Fiscal Responsibility Index, developed in 2011 by Stanford University graduate students in conjunction with the Comeback America Initiative.
Seriously stop trying to make your point by adding states information in to blow up your figures… States are self sustaining… As for comparing them to countries in Europe those countries have less citizens so their rates being higher is WORSE than the United States…. They have even less opportunity to get their GDP on track.. However once the US is back on track, these countries will also come back because a large portion is obtained by visitors to those countries…
Kelly makes a good point regarding the addition of state and local debt. It is federal debt that should be used for such a comparison. However, there is on caveat, that if the federal government is willing to bail out states, then their debt should be added. Also, in my opinion, all the debt of corporations which are “too big to fail” should be added. That is why such corporations should be broken up or be subjected to fiscal discipline regulation.