Three Countries With the Most Debt

Three Countries With the Most Debt
Three Countries With the Most Debt

When you think of debt you might normally think about your mortgage, your student loan, or the bank loan you took out to buy that car. However the amount of money owed by individuals is truly very small when compared to the huge debt owed by many countries. With the economic crisis as serious as it is now, many countries owe huge amounts of ‘external debt’ meaning they have huge amounts of public (public debt meaning debt owed by the government) and private debt (debt owned by individuals, households and private companies) – plus interest – that they owe to non-residents – organisations, individuals and governments in other countries.

To put this in perspective, the United States currently has a gross external debt of $13.45 trillion which really makes most mortgages seem not that bad in comparison. However the number alone really doesn’t mean that much as owing that much money is fine as long as you have the resources to pay it off. This is why the best way to calculate a countries debt is to look at the debt to GDP ratio where ‘GDP’ stands for ‘Gross Domestic Product’. Sometimes called ‘GDI’ – Gross Domestic Income – this is the total market value of goods/services that are produced in a year made within that countries borders. This tends to correlate with standard of living as it means that both the public and private sectors have more income.

So if the external debt is high, but the GDP is high then this isn’t quite as serious – the more a country earns the more it is expected to spend and in fact spending is necessary for a country to earn. The real problem is when a country has a high external debt, but not the GDP necessary to repay this. That big number that the US owed? The ratio of that is only 94.3% as the US has an annual GDP of $14.26 trillion.

The countries with the highest external debt then are the United States, the United Kingdom and Germany. With $13.45 trillion (USD), $9.08 trillion and $5.20 trillion respectively. However in a survey of the world’s top 75 economies, it was found that the top three were Ireland (1,267%), the UK (408%) and Switzerland (422%) had the worst external debt to GDP rates in the world – these are the countries currently in the most trouble. Of course these figures though leave out smaller economies that may be outliers due to their smaller populations/lack of produce.

10 thoughts on “Three Countries With the Most Debt”

  1. It does not surprise me that the US is the first in debt. Maybe that is why so many Amercians are in debt. I was surprised that the second was the UK. I would have thought that it would have been someone else.

  2. When I first read the title I knew the USA would be listed as number one. I am not surprised. It is no shock that so many people have trouble with debt because they are learning it from good leaders. Who like to put our country further and further into debt.

  3. I knew that the US would be the first in line for debt. NO surprise or shock to me at all. I think that we put too many other countries first before us and that is why we are so far behind. And our politicans do stupid things.

  4. No surprise at all that the US is the first in line for debt. I knew that we would be before even reading this article. I agree with Candy on this 100%. Put us first and then maybe we would not be in as much debt.

  5. The US has been in debt for so long we do not even know what it is like not to have any. That is probably why so many Americans are in debt. A country that sees nothing wrong with it so whey would its citizens? We as Americans are just following along in our countries footsteps.

  6. Wow, Switzerland is part of top three countries with the most debt, related to GDP. I didn’t see that coming. I thought they had a strong economy.

    PS: thanks for creating this blog. As I can see, it contains a lot of interesting information! Thumbs up!

  7. I knew when I saw the headline that the US would be in the list. We have been in debt for so long as a country that I can not see us ever really getting out of debt. I think when we talk about the US and its money, the word debt just comes to my mind.

  8. The USA? Being the number one in debt? That is so not hard to believe. That is why we think we can live so greatly because our country does that. We have no problem borrowing from others.

  9. Imagine the US being in debt. No surprise here. I knew when I saw the title the US would be number one. We will always be in debt.

  10. I agree with Sid on this one. The USA will always owe someone money. Pretty soon no one will want to lend up money. We need to get out of debt.

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