Zimbabwe has the world's highest public debt as a percentage of the economy. Select examples and overall rank:
Zimbabwe 304% (1)
Japan 192% (2)
Greece 108% (8)
France 80% (15)
Germany 77% (18)
U.K. 69% (22)
U.S. 58%* (42)
Iran 19% (103)
Russia 7% (124)
Source: CIA
* Does not include Treasury debt held by Social Security Administration and the Federal Reserve.
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OTHER VIEWS: 'Tip of the iceberg'
The situation is particularly acute in Greece, where massive debts have forced the government to propose widely unpopular cuts in salaries, bonuses and pensions coupled with significant tax hikes. Interest rates have soared, and deadly riots have broken out in Athens.
To be sure, there are huge differences between Greece and the United States. Here, the federal government represents about 20% of the U.S. economy, whereas the Greek government is about 40% of its economy. Washington's big spending is on benefit programs such as Medicare and Social Security, rather than on compensation for a massive and militant cadre of public employees. And, perhaps most important, the USA doesn't share a currency with other countries, giving the nation more flexibility to print money if needed.
Before Americans get too smug, however, they should note the obvious: Debt is debt. If too much Greek borrowing can send world financial markets into turmoil like that of the past couple of days, imagine the damage a U.S. debt crisis would inflict.
Washington's public debt is nearly $8.5 trillion, which comes to about 58% of the U.S. economy, compared with ratios exceeding 100% in places like Greece. But the U.S. debt is rising fast, and its true size is masked by the surplus run by the Social Security trust fund. Factoring that in, the total national debt is about $13 trillion, or 90% of the economy. Including unfunded liabilities for such programs as Social Security, Medicare and Medicaid, the federal government is looking at a long-term shortfall of about $62 trillion, or about $200,000 for every American, according to thePeter G. Peterson Foundation, a group devoted to promoting awareness about public borrowing.
These numbers should come as a shock. But in Washington, there appear to be two acceptable responses — denial and finger-pointing.
Nothing illustrates this more than Congress' failure in January to create a bipartisan commission just to propose ways of reducing the debt, forcing President Obama to create such a commission with an executive order.
Many Democrats cling to the fatuous and deceitful argument that commission members should keep their hands off Medicare and Social Security, which is tantamount to saying they should do nothing. Those two programs alone consume one-third of federal spending and constitute the vast bulk of the long-term debt problem.
At the same time, many Republicans— including Senate Minority Leader Mitch McConnell of Kentucky, who had previously championed the commission approach— voted against the panel because they fear it will propose tax increases as a necessary piece of any solution.
Unless this type of petty behavior ends soon, and there are few indications that it will, the economic tragedy in Athens will simply be an out-of-town tryout for the show headed for Washington.
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