BillShrink has posted an infographic on the growing problem of national debt. If you are concerned about the U.S. debt, then take a look at other countries. Japan has a public debt that is 172% of GDP. By comparison, the U.S. has a public debt that is about 89% of GDP. Japan’s debt is mainly financed by the citizens of Japan. Unfortunately, the Japanese population is getting older and retiring. They might not be able to internally fund their debt much longer, and may have to go to international markets.

Now, let us look at little closer at the U.S. debt level. The U.S. has a total debt of approximately $12.3 Trillion dollars, and a GDP of $13.84 Trillion, for a ratio of about 89%. That figure comes from the The Debt to the Penny and Who Holds It website, which is run by the U.S. Treasury department. Of that amount, $4.5 Trillion is held by the U.S. government, leaving just $7.8 Trillion held outside the government. Of that, $3.6 Trillion is held by foreign governments. That puts our external debt to GDP ratio at a manageable 26%.

How did BillShrink come up with the $13.773 Trillion dollar external debt figure? Probably from this U.S. Treasury site. Is BillShrink wrong? How can the U.S. Treasury have two different answers to the same question? I suspect that the difference is in how you define external debt. In the case of the data that BillShrink is using, I presume that the definition means not only the debt for today, but also the interest on that debt due in the future.

If all these numbers leave your head spinning, and wondering what to think, remember these two things. First, noble prize winning economist Paul Krugman argues in Till Debt Does Its Part that we need more debt. Secondly, let’s take a flash back to 1990 when Jack Gargan complained about a $3 Trillion dollar debt in a series of newspaper ads.

via BillShrink : The Growing Problem of National Debt

via U.S. Debt Clock: U.S. Debt Clock