The Fiscal Cliff is Global

We spoke last week about the US Statutory Debt Limit, the cap on borrowing that is set by Congress, reporting the official position for the end of November at $16.394 Trillion, or $16,394,000,000,000.

However, we only told part of the story. According to our friends at EWI, federal government debt, including Social Security, Medicare and federal employees’ future retirement benefits- already exceed $86.8 trillion, or 550% of GDP.

Sorry, as the word,” Trillion,” is neither understood nor alarming enough (in respect of Debt that is) we should state it with all of its 12 zeros.

$US 86,800,000,000,000.

So the next time that someone tells you that it’s a European debt crisis quote them the above. Furthermore, the debt crisis is Global.

In March this year, CNBC listed the world’s largest debtor nations. Besides the United States, here are some of those countries and their gross external debt (in U.S. dollars):

United Kingdom $10,157,000,000,000
Germany $  5,674,000,000,000
France $  5,632,000,000,000
Netherlands $  2,590,000,000,000
Italy $  2,494,000,000,000
Spain $  2,392,000,000,000
Ireland $  2,260,000,000,000
Belgium $  1,457,000,000,000
Switzerland $  1,332,000,000,000
Australia $  1,283,000,000,000
Hong Kong $     939,830,000,000
Greece $     546,920,000,000
Portugal $     511,940,000,000


Still not convinced that there isn’t much difference between a million, billion and trillion? Imagine it in terms of time, where:-

  • A Million  seconds  equals  12        Days
  • A Billion  seconds  equals   31       Years
  • A Trillion seconds  equals   31546 Years

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