THE fourth of July is America’s national day annually.
The nation’s President, Donald Trump, demanded that legislation containing most of his vision to “Make America Great Again” needed to be put into law by that date this year.
He broadly achieved that due to his personal control over the Republican Party, over which he seems to command supreme power.
Many would suggest that Trump is aware of the debt that is invading the USA’s ability to manage its financial affairs and his fallout with DOGE commander Elon Musk is due to this situation.
Trump’s “Big Beautiful Bill” is calculated by a number of top US economists to be creating further debt of US$3.2 trillion.
The main reason why people, companies and countries fail financially is almost always due to debt getting out of hand.
Argentina is one example which went down twice in my memory.
Many people might also remember Cyprus only being saved because its government decided to grab half of the money held on deposit by everyone as its method of reducing its runaway debt.
Establishing the debt of a country is calculated as being a percentage of borrowings in relation to its GDP.
When doing this research, I found it necessary to put national debt into three baskets for comparative purposes – huge debt, middle range debt and reasonably safe debt – so we can get an idea of which countries are able to handle their debt and those who look speculative at best.
This week I will list the big debt states with huge borrowings then complete the story in my next opinion piece.
Top of the debt list that I could find was, surprisingly, Japan, whose debt is equivalent to 234.9 percent of its GDP.
Next was Italy with its ratio being 137.3 percent.
Then it is the USA at 122.5 percent but that is before its probable US$3.2 trillion is added onto its future losses.
Then we have France with 116.3 percent, Canada at 112.5 percent, Belgium 106.4 percent, UK 103.9 percent, Spain at 100.6 percent, China 96.3 percent, Brazil 92 percent, India 80.4 percent and Argentina 73 percent.
Watching how these nations handle their huge debt issues will prove to be an interesting exercise.
By John BLACKBOURN
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