Why Is The Cost Of Living Rising and What Is National Debt?

What Is National Debt?

National debt – also known as public, government, or sovereign debt is money owed by a central government to its creditors.

Debt is calculated as the sum of the following liability categories (as applicable): currency and deposits; debt securities, loans; insurance, pensions and standardised guarantee schemes, and other accounts payable. oecd.org

Domestic or internal debt is owed to creditors within the country and external debt is owed to international (external) creditors.

National Debt Top 5 Countries

The U.S. takes the number one spot with the highest national debt owing an estimated $30.9 trillion. China follows in second place with 13 trillion, followed by the U.K. with 9.02 trillion. France owes 7.32 trillion and Germany comes in fifth at around 5.47 trillion dollars. (See the link below for debt clock and up to the minute figures).

National Income (GDP)

Gross domestic product (GDP) is the income earned by a nation through the production of goods and services. It’s used to indicate national economic activity and is often combined with the national debt as a more realistic way to measure debt.

The graph from the Organisation for Economic Co-operation and Development OECD shows the General National Debt by country measured as a percentage of GDP.

Source: OECD (2022), General government debt (indicator). doi: 10.1787/a0528cc2-en (Accessed on 21 September 2022)

With GDP taken into consideration Japan, Greece, Italy, the U.S. and Portugal now take the top five spots with France just out of the top 5 in the 6th position, the U.K just behind them in 7th and Germany down in the 22nd position.

What Countries Have The Lowest National Debt?

Macao has 0% debt, followed by Brunei with 1.77% and Hong Kong with 2.17%. In 2021 Russia was estimated to be about 18% of GDP placing it 12th on the list of countries with the lowest national debt.

What About The U.S. and China

The U.S. and China are the two main global economic powerhouses but the U.S. is in debt to China by an estimated 981 billion dollars (Rounding up that’s a TRILLION). If China began dumping U.S. debt the result would be an increase in costs for U.S. businesses, consumers and the U.S. government all of which could damage attempts at economic recovery for the U.S.