Skip to comments.Skyrocketing debt figures don't tell the whole story
Posted on 01/12/2010 10:15:56 AM PST by Lorianne
Some take comfort in pointing out that the national debt is "only" 60 percent of gross domestic product. That ranks the United States about 25th in the world. By comparison, Japan's public debt is 180 percent of its GDP. So we are at least better off than the Japanese, right?
Wrong, says Robert D. Arnott, chairman of Research Affiliates, an institutional money management firm based in Newport Beach, Calif. Our debt burden only appears to be lighter than Japan's because we don't count all of it.
State and local government debt is not included; neither is corporate debt nor household debt. Social Security and Medicare obligations? Not a penny is counted.
He has done a little ciphering to come up with a more realistic picture of the crushing amount of debt the United States has incurred. The public debt is actually 141 percent of GDP when the state and local government debt is included.
Our corporate debt is 317 percent of GDP, and household debt is 100 percent of GDP. Add it all up and the nation's real debt burden is 558 percent of GDP, according to Arnott. That's the kind of debt levels you typically see in Third World countries, such as Zimbabwe.
(Excerpt) Read more at dallasnews.com ...
The answer of course is trillions in new stimulus spending with borrowed dollars.
it would be easier to understand if government accounting was like corporate accounting.
I heard they include future social security bills in japan’s account which skews the matter by quite a lot.