US Budget and Trade Defecit

Quoting Wsp (Reply 23): I am sure you could look these up by yourself. But here FYI:

Thanks for the links. I'm curious where Slz is getting his numbers, because the links you provided paint a very different picture from the doom and gloom he was spreading. Actually government debt is much higher in Europe than the US.

Quote: General government gross debt in the EU-25 reached 63.4 % of GDP in 2005, compared with 60.5 % in 2002. In the euro area, the rise was of the same order, from 68.1 % to 70.8 % of GDP.

General government debt in Belgium was 93.3% in 2005. Germany-67.7, France 66.8.
http://epp.eurostat.ec.europa.eu/cac...6-001-06/EN/KS-CD-06-001-06-EN.PDF
page 162-163

Quote: For the United States, debt held by the public amounted to 37 percent of GDP at the end of FY 2005. This ratio is significantly lower than the average of 47 percent for the 1990s and has remained fairly stable since the Bush administration took office, ranging from 33 percent to 37 percent. In short, federal debt and deficits relative to GDP for the United States are both in quite manageable ranges and are in no way a fundamental threat to the U.S. economy.

http://www.treas.gov/press/releases/js4281.htm

Also you have to consider the growth rate is the US is higher, roughly twice that of Europe. Per capita income is higher, 35000 in the US compared to 2500 in the Euro Area. Germany, the biggest economy in Europe is 25700. Labor productivity is higher in the US 136 to 106. GDP is 10037 in the US compared to 799 in the Euro Area.

As for the balance of trade defecit, which is totally different from the budget defecit (some people like to conflate the two)

Quote: Another commonly expressed concern is the view that the United States, not merely the government but the country as a whole, is relying too heavily on foreign capital to finance its spending. The reliance on foreign capital is counterpart of the U.S. current account deficit, which has grown steadily over the last 9 years to reach over 7 percent of GDP. There are a number of reasons to believe, however, that the United States is capable of maintaining a sizable current account deficit for a much longer period than most other countries. The net external liabilities of the US were quite low relative to the size of the economy when the existing period of current account deficits began in 1995, rose markedly during the next 5 years to between 20 percent and 25 percent of GDP, then stabilized at roughly that level since 2002. A net external liability position of 20 to 25 percent of GDP is very manageable for the United States, and suggests that there is substantial room for it to increase before it would begin to pose a financing problem.

http://www.treas.gov/press/releases/js4281.htm

http://www.airliners.net/discussions/general_aviation/read.main/3402645/