Debt burden and the world
Neither a borrower nor a lender be” Shakespeare’s Polonius warns his son Laertes. Today, many Governments are borrowing money. Borrowing allows Governments to cover shortfalls without having to increase taxes or cut back public spending. But too much debt can hurt economies, especially in a recession.
The US just passed $20 Trillion in debt for the first time, while the UK owes £1.9 Trillion ($2.5 Trillion). The US and UK are not the most indebted countries, if compared with other countries.
Japan’s debt reached 221.8% of GDP in 2015, according to the OECD (Organization for Economic Co-operation and Development) Glance Report. If the Japanese wanted to pay off their National debt, they would owe $90345 each. Similarly, the Ireland, US & Italy per capita debt is around $62687, $61539 & $58693. While the OECD debt average is around $50245.
Per capita debt among OECD countries has increased at an average annual rate of 5.9% since year 2007. The following two plots below are drawn for European Countries and US showing the Percentage of Gross Debt on Governments with respect to their GDPs and similarly, the other plot presents Gross Debt per Capita in terms of Purchasing Power Parity (PPP).