The developed world has quite a mess on its hands now. While we spent billions making the overly powerful and already bloated financial sector fatter and happier, the debt to GDP ratios continued to climb higher across the G-7. Bloomberg reports that the U.S. and U.K. have suffered the largest changes in debt to GDP during the financial crisis:
While Britain’s ratio of debt to GDP has deteriorated the most, it was still the lowest in the G-7 at the end of 2009, the data show. The U.K. started the year at 69 percent, while Japan’s reading was the highest, at 219 percent.
We’ve put ourselves in an unenviable position now. As Ive long said, you can’t solve a debt crisis with more debt. Although Japan currently has the highest debt to GDP ratio the U.S. appears to be well on its way to matching their fiscal catastrophe. When will our policy makers realize – IT’S THE DEBT, STUPID!
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