Debt Loads of G20 Nations: Japan, U.S. Deep in the Hole

by: Markham Lee

Here is a look at the debt loads of various G20 nations:

( "America, Britain and China are among the many countries that have adopted spend-now-pay-later policies to stave off economic disaster. But giant fiscal stimuluses, tax cuts and bail-outs are weighing heavily on public finances. In a paper prepared for the forthcoming G20 summit, the IMF sets out new forecasts for government debt. Japan's debt burden, which is already the largest of the world's big economies, will reach a sumo-sized 225% of GDP in 2010. Rich countries' debt is set to grow from 83.3% of GDP in 2008 to almost 100% in 2010. Developing economies will see much smaller growth from 35.7% to 37.8% in two years, but these countries also have lower debt tolerance than rich ones."

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Graphic Courtesy of

The fact that Japan has the highest debt load of any G20 nation while also being one of the nations that the U.S. is most indebted to is quite interesting, for the simple fact that it's probably not a good thing when the #1 debtor nation is owed a lot of money by the #3 debtor nation.

At the moment we're neck deep in an economic crisis caused by businesses and consumers using debt to fuel faux growth, and/or as a substitute for actual income. Don't be surprised if the next economic crisis is caused by governments doing the same thing, as the debt loans of many of these nations are unsustainable over the long-term. At some point something is going to give and the bill is going to come due.

Source "Daily Chart: Government Debt - Weighed Down" -- March 09, 2009.

Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn't be viewed as financial or investment advice.