3 ms·

EU debt is lower as a percentage of GDP than the US or Japan.

_0ffh 9y ago
Also quite interesting is that total EU debt stayed ~constant 2008-2016, while in the same time frame US federal debt ~doubled.
- adventured 9y ago
  The US made a huge fiscal mistake in going on a hyper government spending spree in response to the recession, whereas most European nations heavily locked down spending expansion. The US did however get new annual economic output the size of Germany's entire economy out of the 2008-2016 time frame. During that time, the EU's economy didn't hardly expand at all, with numerous nations suffering hardship (eg Spain, Italy, Greece, Portugal, Finland). France and Germany also saw essentially zero growth during that time (France lost $400 billion off its GDP due to the dollar, from 2008-2016). It's only just in the last 12 to 18 months that the EU economy is starting to pick up steam. Which approach is better? I prefer lower debt personally, I would have rather the US lock down spending to population growth in response to the recession; such that we might have closer to 60%-80% debt to GDP today.
  - _0ffh 9y ago
    Good point there. While I also think that lower debt is very desirable, the US example here seems to show that there is a positive effect to be had from spending as opposed to a strict austerity policy. It's probably a matter of degree and specific circumstances and goals how much spending exactly is most appropriate.
adventured 9y ago
The US solidly off-sets the difference with its ownership of the global reserve currency. Japan, which also has drastically more debt as a % than the US (and without the consistent growth or assets), doesn't quite have that benefit. When the US debases the dollar, a big part of that inflation is absorbed by the global economy (such as via commodity prices going up, or external dollar instrument holders taking some of the punch). When Japan debases the Yen, the hit is almost entirely absorbed by the people of Japan and its economy.
- Brakenshire 9y ago
  Yes, although an additional factor for the US is their debt figures also only include federal debt, it's more again once you include state level, which doesn't apply in the EU.

Also quite interesting is that total EU debt stayed ~constant 2008-2016, while in the same time frame US federal debt ~doubled.

adventured 9y ago
The US made a huge fiscal mistake in going on a hyper government spending spree in response to the recession, whereas most European nations heavily locked down spending expansion. The US did however get new annual economic output the size of Germany's entire economy out of the 2008-2016 time frame. During that time, the EU's economy didn't hardly expand at all, with numerous nations suffering hardship (eg Spain, Italy, Greece, Portugal, Finland). France and Germany also saw essentially zero growth during that time (France lost $400 billion off its GDP due to the dollar, from 2008-2016). It's only just in the last 12 to 18 months that the EU economy is starting to pick up steam. Which approach is better? I prefer lower debt personally, I would have rather the US lock down spending to population growth in response to the recession; such that we might have closer to 60%-80% debt to GDP today.
- _0ffh 9y ago
  Good point there. While I also think that lower debt is very desirable, the US example here seems to show that there is a positive effect to be had from spending as opposed to a strict austerity policy. It's probably a matter of degree and specific circumstances and goals how much spending exactly is most appropriate.

adventured 9y ago

The US solidly off-sets the difference with its ownership of the global reserve currency. Japan, which also has drastically more debt as a % than the US (and without the consistent growth or assets), doesn't quite have that benefit. When the US debases the dollar, a big part of that inflation is absorbed by the global economy (such as via commodity prices going up, or external dollar instrument holders taking some of the punch). When Japan debases the Yen, the hit is almost entirely absorbed by the people of Japan and its economy.

Brakenshire 9y ago
Yes, although an additional factor for the US is their debt figures also only include federal debt, it's more again once you include state level, which doesn't apply in the EU.