Enlighten me on this economic stat and why its level varies so much among developed nations
>Japan - 228%
>USA - 104%
>Finland - 61%
>Australia - 29%
What do these values mean for the future of these countries?
Public debt is the aggregation of national debt and absolutely everything the nation is involved in, including social security and all communities, both stemming from local and international footholds on a pure government owned or share basis.
This public debt can be expressed in a percentage to GDP ratio. A above 100% means that public debt, what the state owes, is higher than the gross product, the sum of all the national income, generated in a year.
In the event debt is valuated as stock, its deficit is considered as a flux, therefore debt is the result of an accumulation of deficits over several years.
Public deficit is determined when the sum of all public admin budgets result a negative bottom line. The sum of all public expenses would be therefore higher than the aggregated product of public income (tax).
Public deficit is the negative balance of public budget administration. Budget deficit is the negative balance of the budget of the nation.
TLDR; In theory, low debt to GDP ratio increases global competitiveness, strengthens the conomy and creates jobs.
Because compound interest can work against you too.
More money spent towards interest means less for infrastructure
Debt based spending is positive feedback loop of broken windows.
>>1681223
its means if people want welfare, they cant have (Christian) morals
>>1681223
On the face of it the two stats GDP and Debt don't have much to do with each other. But high GDP means higher tax collection. So the ability to service debt is directly correlated with GDP, hence why the ratio is a helpful stat.
It tells an investor at a glance how likely it is that a state will be a good debtor and regularly pay interest and pay-off the initial. And if their numbers are *really* awful they might not even get any money at all which pushes them into default (Greece anyone?).
If your spending regularly exceeds your growth you're bound to run into trouble. Your income already grows too slowly to keep up with your spending, but as debt grows more and more of your income will go towards interest payments. And if you add on top that indebted countries are given worse rating and therefore have to pay even more interest, you've really got a nice vicious cycle going. Hence why a lot of economists call to avoid this situation with austerity.
The flipside of course is, if the economy already stagnates and then you impose austerity measures, GDP will grow even slower (or shrink even) leading to a different kind of vicious cycle (at least according to Keynesians).
So the numbers for the countries essentially represent their future freedom. Freedom to spend their money however they please without debtors looking over their shoulders. Freedom to fuck up their budget and correct it. Freedom to withstand a recession unscathed. Freedom to invest without worries.
As to where those values come from - that's a tale for historians to tell. The US has spent a lot in recent years but also gotten throuth the fallout of 2008 much much quicker than the EU. Japan has been in a downward spiral for two decades, but people still trust them (they also have it a bit easier since they control their own currency). Finland is your average Eurozone country. No clue about 'straya.
this thread is basically mount stupid personified. fucking paragraphs of shit you're basically aping out of a freshman text.
The value varies so much among developed nations because some countries actually produce shit relative to the amount of money they borrow to keep their governent services afloat. Japan has been stagnant since the 90s and is trapped by perpetually low interest rates. USA is basically following in their footsteps while fins and aussies are currently more fiscally sound.
>>1682714
Get fucked