I was just looking at some figures on National Debt and GDP for America and the UK and found some interesting things that I thought I would share.
For those that don't know....
"GDP" (Gross Domestic Product), it's basically how much a country makes, it's like a persons wage or how much they earn, it excludes debt or
When looking at the health of a countries economy, people like to compare how much debt they have as a percentage against how much they earn at the
end of the year, so debt against GDP in other words
If a country earns £20/$20 and they have debts of £10/$10 their 50% debt against GDP, if a country earns $20 and their debt is $20 they have 100%
debt against GDP.... America is currently at 101% give or take and the UK is at 60%
So what is the current debt of America... National Debt is around $15.23 Trillion and the UK is around £1.53 Trillion, fairly even when size etc is
taken into account, I think.
What does Americas debt look like - $15,225,738,000,000.00... What is $15 Trillion? Think of $10 million ($10,000,000).... It's 10 one millions, think
of $100 million ($100,000,000)... It's 100 one millions. $15 Trillion is 15,000,000 one millions or (to confuse things) it's 15 million... one
millions. It's like having 15 million rich people spending a million dollars ($1,000,000).
Each American would have to pay $48,500 each to pay off the debt, but worse is that every Taxpayer would have to pay $135,000 (so every working person
pays $135k).... But wait, that's just National debt the government owes, add the personal debt and business debt... and the total American debt is
£56 Trillion (every Family owes $683,420). If every person on the planet (including children, I've assumed 7 billion, is that right?) paid $1,666
into a bank account, this would pay of American debt or $56 Trillion.
Anyway, the reason for posting is because I was looking at debt in history and if we've been in this situation before.
In the UK, the Debt to GDP is 60%, has this happened before? Is this a disaster like being portrayed?
In the 320 years of having a financial system, I've calculated 215 years have been above debt to GDP of 60%??? And only 105 years have been below 60%,
in other words the UK has spent most of it's history in much worse debt..215 years out of 320 years have been worse than now in terms of debt.
In the US, the Debt to GDP is 101%, looking back in history, how does this stack up?
In the 220 years of having a financial system, I've calculated only 3 years have been higher in terms of debt
What I don't understand is why the UK is panicking when 60% debt to GDP is good considering past percentages, am I missing something? The UK has been
at 260% debt to GDP before!
America on the other hand is in new territory and I can see why the concern.
edit on 12-1-2012 by II HAL II because: (no reason given)