Global Debt

The website Visual Capitalist has a chart that shows how much of the world’s debt is owned by individual countries. The image is a giant circle. What immediately strikes one when looking at it is that half of the worlds debt is held by only two nations, the United States (31.8%) and Japan (18.8%). Some nations on the list are surprising. Is it really possible that Italy’s debt (3.9%) is roughly twice that of Spain’s?

The debts are color-coded, so that the nations with the highest debt to GDP ratios are in yellow. With this approach Japan is the clear standout, a giant block of yellow on a mostly mauve chart, with the lone exception of Greece. According to this chart, Japan’s debt to GDP ratio is currently 239.3%, the highest of any major nation. On the opposite end of the spectrum, Russia is only responsible for .3% of the world’s debt, which places it in a similar category as oil powers such as Saudi Arabia, the UAE and Nigeria. One often hears that Russia is suffering because of low oil prices. It’s also important to have the context that Russia has the lowest debt of any major power. Of course, with $20 trillion dollars in debt, the U.S. is by far the largest global debtor. …

Map of Japan’s demographic decline

When Kim and I wrote the first edition of the textbook, the external reviewers asked for a number of important changes, one of which was to include more demographic information. In the second edition, we continued to draw on demography, which particularly informed our discussion in the conclusion regarding future trends in global affairs. Demographic information can be dangerous if over-simplified, and it is often cited by cultural conservatives who fear the impact of migration. Still, demographics is perhaps the most reliable means to look into the future, whether it be to foresee the decline of francophone communities in Canada outside of Quebec and New Brunswick, or the enduring power of France, which has a brighter demographic future than many European states. The major global demographic trend in the world today is towards demographic decline amongst developed nations, even as Africa’s population climbs sharply. Some nations, such as Taiwan, have birth rates that are shockingly low. Of course, there are also advantages to population decline, particular regarding environmental issues. With a smaller population there is less demand for energy and other key resources. In the short term, however, most nation-states that have aging populations will face significant economic challenges, from how to fund the pension system, to the declining number of taxpayers to service the national debt. …

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