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If you actually look at the country's debt compared to its tax revenue, most of these countries situations become much more severe: A better comparison is to e

If you actually look at the country's debt compared to its tax revenue, most of these countries situations become much more severe: A better comparison is to examine each country’s debt to government tax revenue, since that is the government’s income. This also offers a better comparison because different countries have very different levels of taxation. A country with high taxes can afford more debt than a low tax country. Debt to GDP ignores this difference. Comparing debt to tax revenue reveals a much truer picture of the burden of each country’s debt on its government’s finances. When I compute those figures, Japan is still #1, with a debt as a percentage of tax revenue of about 900 percent and Greece is still in second place at about 475 percent. The big change is the U.S. jumps up to third place, with a debt to income measure of 408 percent. If the U.S. were a family, it would be deep into the financial danger zone. To add a bit more perspective, the countries in fourth, fifth, and sixth place are Iceland, Portugal, and Italy, all between 300 and 310 percent. In other words, these three are starting to see a flashing yellow warning light, but only three developed countries in the world are in the red zone for national debt to income. The U.S. is one of those three. source: http://www.forbes.com/sites/jeffreydorfman/2014/07/12/forget-debt-as-a-percent-of-gdp-its-really-much-worse/ http://www.forbes.com/sites/jeffreydorfman/2014/07/12/forget... Many Scandinavian countries economies have slowed somewhat recently. Norway has been nicked from gas prices coming down since its such a big oil exporter. Even with the slow down, most countries still have robust economies.

bjornsing 11y ago
An important difference between Greece those other countries is that Greece is borrowing in a currency it does not control...
Amezarak 11y ago
> If the U.S. were a family, it would be deep into the financial danger zone. But the US government is not a family. Neither is the Japanese government. This analogy is disingenuous and one that should be eradicated from all economic thinking. When in debt, the rational thing for a family to do is always cut expenses to the greatest extent practicable (or to declare bankruptcy, I suppose.) This is decidedly not the most rational thing for the government to do in every situation, because it can crash the economy and actually worsen the relative debt load of the country. The US is not in danger. Interest rates are very low, sometimes still trending into negative territory. [1] The US is a sovereign nation that issues its own currency. The US can inflate its debt away, just as it did with an almost equally large debt in the late 40s and 50s. Granted, the economy needs to be growing more than it does now; in part because of anemic growth, the Fed is struggling to meet target inflation rates of 2%. http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield http://www.treasury.gov/resource-center/data-chart-center/in...
- chii 11y ago
  > trending into negative territory i dont get how interest can be negative - i get paid money for borrowing?!
  - Amezarak 11y ago
    > i dont get how interest can be negative - i get paid money for borrowing?! Yes, that is how negative interest works. I should have qualified that, though, with "real interest rates", meaning that inflation is accounted for. Rates in the US at least are nominally not negative. But the net effect is the same: a borrower with a negative real interest rate is being paid to hold your money. This implies that investors are looking for very safe places to keep their money, so much so that knowing you're going to lose a little bit is OK.
    - jcranmer 11y ago
      At times during the Great Recession, nominal interest rates on US (and German) bonds did actually go negative for brief periods of time.
- realityking 11y ago
  > The US is a sovereign nation that issues its own currency. Note that only major economies with a history of having a stable currency are able to finance all their debt in their own currency.
- taejo 11y ago
  Even in a family, if the breadwinner loses their job, they should not sell their car if that's the only way they'll get another job.

bjornsing 11y ago

An important difference between Greece those other countries is that Greece is borrowing in a currency it does not control...

Amezarak 11y ago

> If the U.S. were a family, it would be deep into the financial danger zone. But the US government is not a family. Neither is the Japanese government. This analogy is disingenuous and one that should be eradicated from all economic thinking. When in debt, the rational thing for a family to do is always cut expenses to the greatest extent practicable (or to declare bankruptcy, I suppose.) This is decidedly not the most rational thing for the government to do in every situation, because it can crash the economy and actually worsen the relative debt load of the country. The US is not in danger. Interest rates are very low, sometimes still trending into negative territory. [1] The US is a sovereign nation that issues its own currency. The US can inflate its debt away, just as it did with an almost equally large debt in the late 40s and 50s. Granted, the economy needs to be growing more than it does now; in part because of anemic growth, the Fed is struggling to meet target inflation rates of 2%. http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield http://www.treasury.gov/resource-center/data-chart-center/in...

chii 11y ago
> trending into negative territory i dont get how interest can be negative - i get paid money for borrowing?!
- Amezarak 11y ago
  > i dont get how interest can be negative - i get paid money for borrowing?! Yes, that is how negative interest works. I should have qualified that, though, with "real interest rates", meaning that inflation is accounted for. Rates in the US at least are nominally not negative. But the net effect is the same: a borrower with a negative real interest rate is being paid to hold your money. This implies that investors are looking for very safe places to keep their money, so much so that knowing you're going to lose a little bit is OK.
  - jcranmer 11y ago
    At times during the Great Recession, nominal interest rates on US (and German) bonds did actually go negative for brief periods of time.
realityking 11y ago
> The US is a sovereign nation that issues its own currency. Note that only major economies with a history of having a stable currency are able to finance all their debt in their own currency.
taejo 11y ago
Even in a family, if the breadwinner loses their job, they should not sell their car if that's the only way they'll get another job.