Debt to GDP ratio

[Questor]

I was just listening to an interview on the radio about the financial crisis in Greece. The person interviewed said that the government deficit in Greece is about 14% of GDP while the debt is about 120% of GDP. I think he said something about some bonds coming due and that has precipitated the crisis, but I'm not so interested in that.

A few years back, before Cretien and Martin went slashing and burning government programs, it was said that Canada was hitting the debt wall, with annual deficits growing since the Trudeau years. Does anyone know what the debt and deficit to GDP ratio was back then, and also what it is now?

Edit: I've been searching around a bit. Most web sites like to put up big numbers and "debt clocks" to try to scare people. You can see they have an agenda.

One site said this: It (the debt) broke the $100-billion mark in 1981 and the $200-billion mark in 1985. While the growth slowed in 1988, our federal debt continued to climb, breaking $300-billion in 1988, $400-billion 1992, and $500-billion in 1994. It peaked in 1997 at $563-billion.

Big numbers are always scary because people relate it to their personal finances. But in my mind, its the debt to GDP ratio that is the meaningful number.

 

[red]

in the mid 90's the federal debt to gdp was over 60% and is now mid 30's. all based on recollection

 

[fuji]

in the mid 90's the federal debt to gdp was over 60% and is now mid 30's. all based on recollection

I think that was federal debt only, when you added in the provincial debt as well (after all, ultimately, the same tax payers) it was and is more:

 

[onthebottom]

Here are a list of countries by debt as a % of GDP: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

You'll find Greece at #8, Canada at #20 and the US at #42

For the one person who cares, Denmark is at # 67

OTB

 

[Huron]

Lucky Equatorial Guinea.

 

[toguy5252]

Canada sees debt/GDP ratio climbing again

http://www.reuters.com/article/idUSN1151927220090611

 

[markvee]

Those who seek to avoid federal debt repayment would rather see the task go to their children.

Some would like to continue living beyond their means through deficit spending.

Some feel entitled to live beyond their means, referring to the entitlements as rights, such as a right to universal health care.

But it is your children that you would have live beneath their means.

Explain to them why the absolute government debt doesn't matter.

 

[red]

I think that was federal debt only, when you added in the provincial debt as well (after all, ultimately, the same tax payers) it was and is more:

that might be why I said federal debt to gdp?

 

[red]

Here are a list of countries by debt as a % of GDP: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

You'll find Greece at #8, Canada at #20 and the US at #42

For the one person who cares, Denmark is at # 67

OTB

too bad they dont give the details of the calculation so you can see the components of the debt.

 

[flubadub]

Canada sees debt/GDP ratio climbing again

What do expect to happen with the conservatives in power.

Mulroney - big deficit runner
Harper - took the country from near record surplus to near record debt in near record time

 

[Victor Lazlo]

What do expect to happen with the conservatives in power.

Mulroney - big deficit runner
Harper - took the country from near record surplus to near record debt in near record time

And in the face of the worst recession in 50 years you would have done what as Finance Minister?

 

[Keebler Elf]

It doesn't matter what your particular country owes, it matters how your country compares to others. I've heard convincing arguments that you don't want to pay off all your debt because in the event of a global catastrophe where countries are defaulting left, right, and centre, you'd be left holding the bag.

 

[SkyRider]

Isn't all or almost all Canadian government (federal, provincial, municipal) debt owed to other Canadians (e.g. CPP)? This means interest paid on this debt stays in Canada.

 

[slowandeasy]

I
Big numbers are always scary because people relate it to their personal finances. But in my mind, its the debt to GDP ratio that is the meaningful number.

Big numbers are scary not just because we relate it to personal finances. They are scary because they are such big numbers, and they are debt. If we had a huge surplus, no one would be scared.

I do agree that it should be a ratio, but DEBT tio GDP is not necessarily the right ratio.

 

[mac]

What do expect to happen with the conservatives in power.

Mulroney - big deficit runner
Harper - took the country from near record surplus to near record debt in near record time

Cretien's surpluses were generally the result of Mulroney's GST initiative and Harper was in office when the worse recession since the great depression hit which was the fault of US deregulation and crap housing carket versus anything his goverment did. As every economist in the world would tell you when no else spends the governemnt has to.

 

[Rockslinger]

Trudeau is the father of Canada's debt and deficit.

Going bust is nothing new for Greece. This is their 4th or 5th bust in the 200 years since the Ottoman Empire.

 

[Questor]

Thank you all for your responses.

Here are a list of countries by debt as a % of GDP: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

You'll find Greece at #8, Canada at #20 and the US at #42

For the one person who cares, Denmark is at # 67

OTB

Canada sees debt/GDP ratio climbing again

http://www.reuters.com/article/idUSN1151927220090611

The first link puts our debt at 72.3% of GDP. The second link puts it at 33.4% of GDP. It looks like the difference is that the first number includes provincial debt, while the second number is federal debt only. I am really surprised that our percentage is higher than USA. It could be, as one poster suggested, that our debt is largely to other Canadians. That does make a difference, but the stats don't show that.

The debt-to-GDP ratio, which measures how important the debt is in proportion to the overall economy, will rise to 33.4 percent at the end of the current fiscal year next March, from an estimated 28.8 percent at the end of the 2008/09 year and 29.8 percent the year before.

The ratio had steadily decline from the peak of 68.4 percent in 1995/96.

Those who seek to avoid federal debt repayment would rather see the task go to their children.

Some would like to continue living beyond their means through deficit spending.

Some feel entitled to live beyond their means, referring to the entitlements as rights, such as a right to universal health care.

But it is your children that you would have live beneath their means.

Explain to them why the absolute government debt doesn't matter.

I don't think it has anything to do with my children, since I don't have any. And if you are equating support for universal medicare as being the same as wanting to live beyond one's means, that is not so. I fully support universal medicare, but I do not believe in continued deficit spending.

What do expect to happen with the conservatives in power.

Mulroney - big deficit runner
Harper - took the country from near record surplus to near record debt in near record time

And in the face of the worst recession in 50 years you would have done what as Finance Minister?

Well, I wouldn't be cutting the GST, that's for sure. Harper is running such a large deficit because he cut taxes. Those taxes are needed to pay for government programs. But Harper doesn't like any government programs except the military. So he cuts taxes. Then when there is a deficit and escalating debt, he shrugs and says sorry, we can't afford those programs.

 

[markvee]

"Democracy is two wolves and a lamb voting on what to have for lunch." The wolves will vote for entitlement after entitlement and perhaps join a burgeoning public workforce with generous pay and benefits. But the government must ultimately find someone else, a lamb, to tax in order to pay for it all.

Some taxes are obvious: the income tax that was supposed to pay for World War I, the GST that was promised to be removed with a change in ruling party, the employment insurance surplus that got re-imagined as tax revenue, and the proposed carbon tax. But there is a limit to this form of taxation beyond which people hide their money and participate in black markets.

The government can print money, which is a tax on savings, but there is a limit here too. Hyperinflation will lead people to engage in barter and to use other currencies.

The remaining tax is to tax the future through borrowing against the children, the weakest lambs of all, who are largely unaware and do not even have a vote to protest being robbed.

 

[JohnLarue]

It doesn't matter what your particular country owes, it matters how your country compares to others. I've heard convincing arguments that you don't want to pay off all your debt because in the event of a global catastrophe where countries are defaulting left, right, and centre, you'd be left holding the bag.

That is exactly the misguided type of thinking that precipitated the recent sub prime crisis.
JimBob saw that BillyBob, Cousins Clem and Zeke were levered up with more debt than they could afford and justified his own irresponsible borrowing in order to "own a home" he could not afford.

Left wing thinking always want to transfer responsibilities to others.

 

[flubadub]

And in the face of the worst recession in 50 years you would have done what as Finance Minister?

I wouldn't have cut the gst and corporate taxes, which took the country from surplus to debt before the recession even hit.
And I wouldn't be in the process of cutting corporate taxes on banks, when they are still having near record surpluses.
And on top of that, I wouldn't be the only country in the G8 trying to stop taxes on international banking.