Central Government Debt as Percentage of GDP

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Crusade Against Big Government!! This was the battle cry for more than a few U.S. politicians while campaigning for the 2010 November midterm elections. They promised to scale back government spending, to cut waste, and to reduce taxes.

This message obviously struck a chord. U.S. voters responded, sweeping fiscal-hawk Republicans into office across the country. A Republican even won the race for Pres. Barack Obama’s old U.S. Senate seat in Illinois.

It’s easy to see why voters would be so attuned to the idea of a smaller government. The U.S. government simply continues to grow. And as it grows, it continues to rack up debt. The U.S. national debt as of the November midterm elections was greater than $13 trillion. $13 TRILLION! And there were no signs that it was going to drop any time soon.

But when you take a closer look at the debt carried by the U.S. government, a startling truth emerges: The country’s debt is certainly at astronomical levels. But so is the United States’ Gross Domestic Product. In fact, the U.S. national debt equals only 55.7 percent of the U.S. Gross Domestic Product.

Many other countries have debts that gobble up a much higher percentage of their Gross Domestic Product.

Italy, Jamaica and Greece: What’s Going On?

As the infographic attached to this story explains, many countries around the globe are struggling with national debts that surpass their gross domestic product. This is a more serious problem than having a high national debt in the first place.

Consider the case of Italy. It’s national debt =106.3 percent of its gross domestic product. Jamaica, where the debt is 112.9 percent of the gross domestic product, and Greece, 114.1 percent, are in even worse shape.

Simply put: If you’re a country, you don’t want your debt to exceed your gross domestic product. It’s like running your household. No one wants high debt. But if your debts are high, you better hope, at least, that your monthly revenues, the money you bring in, are even higher.

Is Estonia a Role Model?

For an example of a country where the national debt isn’t anywhere near the level of its gross domestic product, look at Estonia. Located in the Baltic region of Northern Europe, the small nation of Estonia has a national debt that is only 4.1 percent of its gross domestic product.

The Democratic Republic of the Congo, located in Central Africa, does Estonia even better. Its national debt is just 0.2 percent of its gross domestic product.

Of course, this isn’t necessarily a fair comparison. The United States is a superpower, making and borrowing money at a manic pace. Whatever you want to say about Estonia and Congo, you’d never classify them as superpowers, right?

But what about other countries that are more similar to the United States? How do some of them rank when it comes to their national debts and their gross domestic products?

Mexico is doing better on this front than is the United States. National debt of Mexico is just 23.2 percent of its gross domestic product. Australia is doing even better: Its national debt is just 19.5 percent of its gross domestic product.

Of course, while the politicians might be stomping their feet about the national debt, it is just one measure of a country’s overall health. Yes, it’d be better if the United States owed less money. But don’t let the soaring national debt sour you on the health of the country. The United States owes a lot, it’s true, but it’s still a major financial force in the world.