I cannot remember the exact figures, but more than 5 years back, the American debt problems was heavily discussed here because it was much bigger than the point where European countries would usually consider themselves over the edge. I'm not referring to specific EU rules or things like that.
However, there is a 60% GDP limit on budget debt, which USA has passed (and some member states in EU, too).
The balance of payments doesn't look nice, either:
The brown is the "global deviation" which indicates the fact that the sum of all trade deficits in the world is actually negative. The vertical axis is billions of dollars, and the orange is the Euro zone. These numbers are often overlooked.
According to (BIS, 2003; Freund, 2000; IMF, 2002), historical experience shows that countries should work on restoring their payment balance when it has reached a debt of 4-5 pct. of GDP. I don't know what the current value is for USA, but it's ugly (debt as pct of GDP).
These charts are from this document from the Danish CB, which may be readable using Google's English-button feature:
nationalbanken.dk
If you go enough time back in history, debt problems were solved differently. Denmark was once basically mortgaged to a German count, and when he wanted to get his money back, he was killed in 1340. Problem solved, debt disappeared.
en.wikipedia.org
en.wikipedia.org
Without that murder, the debt would probably have made Denmark be a part of Germany today.
In 1813 Denmark actually went bankrupt, which led to the loss of Norway in 1814.
Maybe it's time to sell Alaska? Russia may be willing to buy. |
