my contribution to Luxembourg’s GDP
Who knew the Brits had more debt than the Yanks? This article from the Times was disturbing, particularly so since it seems to indicate that although much of the debt incurred in the Colonies is mortgage-related, the Queen’s subjects have been racking up credit card debt to pay for fox hunting gear or Pop Idol CDs (yes, we can also blame the UK for American Idol’s inspiration).
Wikipedia has an article on debt-to-GDP here although it has all of the little “this article may be full of hooey” warnings across the top of the page. It looks like the top 5 countries with the worst debt-to-GDP ratio are (the higher the number, the better):
1 Zimbabwe 189.90 (the worst)
2 Lebanon 188.00
3 Japan 182.40
4 Seychelles 143.30
5 Jamaica 134.30
And the countries with the BEST debt-to-GDP ratio are:
126. Luxembourg 2.60 (the best)
125. Equatorial Guinea 2.70
124. Oman 2.80
123. Chile 3.60
122. Estonia 3.80
The US, Great Britain and Canada came in at #65, #49, and #21, with lower numbers being worse. So Canada’s even more of a mess than the US in terms of debt? Who knew?
If you’re like me, you imagined that places like Zimbabwe and Lebanon were probably the worst because of instability in the economy or the country itself; people borrow because they have to, or interest rates are sky high, or something like that. I didn’t expect to see Japan there. Does that mean that Japanese consumers are going nuts even worse than US consumers? Or is it just the result of the long slow economic malaise that has gripped Japan for the last 15 years?
And turning around to the best, I would have guessed Luxembourg or Switzerland for #1, but the rest? Is it a lack of access to debt, or are Chileans simpler smarter about debt than Americans and Brits (and everyone else in the world who isn’t an Omanian or Equatorial Guinearianan)? It’s possible – other cultures aren’t as consumer-mad as the US. Runners-up for lowest ratio included Libya and Russia. Odd results – to me, at least.
Looking up stats like that just proves that you can’t do much in the way of guessing about economic factors, because I would have been UTTERLY wrong. With the levels of literacy, education and supposedly gung-ho zap pow entrepreneurial/capitalist knowledge in places like the US, you would think we would have collectively figured out debt is stupid, wouldn’t you? It’s amazing that places like Estonia are “frugal” countries, living well below their means, and places like the US, Canada and Britain are apparently busy putting flat-screen TVs on their 18% APR credit cards. And don’t forget – until about 15 years ago, Estonians didn’t even have an economic system where debt existed! Yet they’ve avoided incurring it in post-Soviet “free markets.”
So hats off to you, Luxembourg! I visited Luxembourg many years ago with my brother. We had just finished a disastrous trip to Brussels, and took off for the greener pastures (so to speak) of Switzerland, but detoured through Luxembourg. This was in the era of the strong dollar, and we were sidetracked – first for an afternoon but eventually for (I think) four days by the local brewhouses. Over many beers we made the repeated decision to stay “just one more day and visit just one more pub” so at least in some small part I helped pump up the GDP that year. Through my the staunch efforts of my brother and myself, we put a tiny uptick into the Luxembourgeronian economy, at least in the beer sector. I played some small part in that excellent ratio. Just my little contribution to Luxembourgishnian financial supremacy. You’re welcome, Luxembourg. I miss you and hope I’ll see you again someday.