Talk:Debt-to-GDP ratio

Adding an indication what's preferred in the top section of the article for smart-pop-up in other articles

I was reading on the SDR's of the IMF because I'd like to exchange viewpoints on what are the pro and cons of adding CO2e-certificates into the basket. I then came to the debt-to-gdp ratio in the article and wondered if one favors a low or high debt-to-gdp ratio or what it indicates. The pop-up shows when hoovering over the term "debt-to-gdp ratio", conveniently shows the main text of this article, but there's no indication of what's good. I think this should be added in the top=main section. A kick-start: A low debt-to-gdp ratio's indicates an economy that produces a large number of goods and services and probably profits that are high enough to pay back the debt. Governments aim for low debt-to-gdp ratio's and can stand-up to the risks involved by increasing debt as their economies have a higher gdp and profit margin. Pls specialists, improve and replace the insert.--SvenAERTS (talk) 07:52, 27 September 2010 (UTC) Post Grad. Eng. - International Relations

Caricologist (talk) 04:17, 19 November 2010 (UTC)

Header data versus linked list of countries

The header suggest both Germany and Japan have a public dept of 60% of their GDP, whereas the united states has close to 100%. The list of countries by public dept linked further down has Germany at 70%, Japan at 190%, and the United States at about 50%.

Unless I am missing a difference in these figures they should be corrected.

-- Eric —Preceding unsigned comment added by 155.56.68.215 (talk) 07:49, 16 November 2010 (UTC)

The data depicted for the United States is inconsistent between the two graphics and therefore require verification

The list of countries is sourced from the CIA World Factbook. I have inserted the figures given by the Factbook for the US, Japan, and Germany. I have left the US figure from http://www.usgovernmentspending.com/federal_debt_chart.html (which conflicts with the Factbook), but have removed the Japan and Germany figures, which were unsourced. The Factbook figures should be considered reliable; I would probably simply remove the figures from http://www.usgovernmentspending.com/federal_debt_chart.html because they don't make any sense. Unfortunately the links that http://www.usgovernmentspending.com/federal_debt_chart.html points to for its sources don't work for me.

174.31.245.10 (talk) 18:49, 2 April 2011 (UTC)

Caption Wrong

The caption for the map is of "government debt to GDP", while after clicking the map, the caption is "public debt to GDP". Which is correct? — Preceding unsigned comment added by 66.49.230.192 (talk) 16:48, 23 June 2011 (UTC)

Private Debt??

We've got a chart/discussion of public debt; how about a chart/discussion of private debt to GDP ratio? (Where "private debt" would be business+consumer; whereas the wikipedia article links "private" to "consumer", which can't be right...) According to this: http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/ the US private-debt-to-gdp ratio is something like 250% or 300% and I wanted to see some sort of independent verification of these figures. linas (talk) 14:57, 13 December 2011 (UTC)

Figures out of date

Is the editor who made the figures for this article still around? I noticed that the figures are (relatively) out of date after reading an article today about China's debt being over 200% of GDP. ~Adjwilley (talk)
STIMULUS SPREE

Government-led stimulus has been a major driver of China's economic growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt - now {May 2017] at nearly 300 percent of gross domestic product (GDP).

Some analysts are more worried about the speed at which the debt has accumulated than its absolute level, noting much of the debt and the banking system is controlled by the central government.

UBS estimates that government debt, including explicit and quasi-government debt, rose to 68 percent of GDP in 2016 from 62 percent in 2015, while corporate debt climbed to 164 percent of GDP in 2016 from 153 percent the previous year. http://www.reuters.com/article/us-china-economy-rating-idUSKBN18M06Z — Preceding unsigned comment added by 209.177.201.210 (talk) 13:29, 27 May 2017 (UTC)

"China's debt was 3 times the GDP in 2022" https://www.reuters.com/world/china/part-chinas-economic-miracle-was-mirage-reality-check-is-next-2023-09-03/ --FordGT90Concept (talk) 19:05, 4 September 2023 (UTC)

This whole article is BS

There is no such thing as a debt-to-GDP ratio, because debt is an absolute amount of money whereas GDP is rate of money per unit time. If you divide debt (money) by GDP (money/time), you don't get a ratio, such as 50 percent, you get a measure of time, such as 50 percent of a year i.e. six months, which means how long it'd take to pay back the debt if the entire GDP could be devoted to debt repayment. The so-called ratio can't be high or low, it can only be long or short as measure of time, i.e. more or less than one year for example. It's similar to a multi-year mortgage. For example, if you owe $300,000 on a home but you can pay back only $10,000 each year, the debt-to-repayment "ratio" is 30 years, i.e. you have a 30-year mortgage. Calling it a debt-to-repayment ratio of three thousand percent is a ridiculous way of talking about it. Likewise if a nation's debt is $2M and their GDP is $1M/yr, talking like the debt/GDP ratio is two hundred percent sounds like they're bankrupt, but actually it's more like a two-year mortgage, no big deal, just a lot of work to divert enough of the GDP to debt repayment to eventually pay down the debt. For example, if they can divert just ten percent of the GDP to debt repayment, they pay off the entire debt in 20 years, like a 20-year mortgage. I propose the top of this article should explain that the whole term debt-to-..p ratio is a misnomer, an absurdity, and then explain what you really get if you divide debt (dollars) by GDP (dollars/year) and then rewrite the rest of the article to stick to the correct meaning. 198.144.192.45 (talk) 22:52, 10 September 2016 (UTC) Twitter.Com/CalRobert (Robert Maas)

There's nothing about "Debt-to-GDP ratio" that requires it be unitless. A ratio is just the quotient of two values, and a year is a perfectly sensible unit for it to have. Many ratios are unitless, but they don't have to be. Quite the opposite of being an absurdity, debt-to-GDP ratio has exactly the intuitive (and useful) interpretation you give. This is a standard economic indicator with a clear meaning, and there's nothing weird about it at all. I do agree that an indicator like this can be misleading to non-economists without much mathematical background, but that's an issue common to pretty much all economic indicators. It would be nice if the article provided better intuition about how to think about the debt-to-GDP ratio, but I think that's hard to do without introducing bias in what is a controversial political issue. 108.53.61.249 (talk) 14:22, 9 February 2021 (UTC)

The debt is an amount of dollars counted at a certain point in time.

GDP is an amount of dollars counted over one year.

Their ratio (Debt-to-GPP ratio) is hence unitless.

GDP growth rate has units dollars/time. Not GDP. Tdziemia (talk) 12:24, 5 August 2024 (UTC)

Inset chart from FRED misleading

Why does the inset chart start at the low point in the 70s? That's a really weird starting point for an example of debt to GDP when the data goes back much further. Debt to GDP was never lower than the low point in that chart in the last hundred years. 73.170.156.225 (talk) 21:49, 12 September 2016 (UTC)

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External debt denominated in foreign currency

Wikipedia contends, without citing a source, that, "all of the money used to service foreign currency debt has to come from a country's balance of payments transfers." I do see the connection but I'm not at all sure "all" as opposed to potentially "a proportion" is applicable, and even then why the "balance of payments transfers" per se? Where does "all" come from? Sources please - I think the current text is possibly overstating the case.Colin McTroll (talk) 00:23, 25 April 2017 (UTC)

Debt-to-GDP ratio is a duration, not a percentage

Sorry, the talk page discussion I wanted to refer to in my edit summary about removing the "Units" section is over there → Talk:National debt of the United States#Debt-to-GDP ratio is a duration, not a percentage. — jmcgnh^{(talk) (contribs)} 03:41, 8 September 2020 (UTC)

But it is related to this sentence in the current article, which should be removed:

"The debt-to-GDP ratio is technically not a dimensionless quantity, but a unit of time, being equal to the amount of years over which the accumulated economic product equals the debt."

This makes no sense at all to anyone with training in math or economics. Debt is a number of dollars and GDP is a number of dollars. Their ratio is hence unitless, and when multipled by 100% it gives the "Debt-to-GDP ratio as a percentage."

This is why no citation will ever be found to support the statement and it should just be removed to improve the credibility of the article. Tdziemia (talk) 12:43, 5 August 2024 (UTC)

Your math is wrong. Debt is $, GDP is $/t (Time in years, "measured in units of currency per year") so: $ / ($/t) = t. ---Avatar317^(talk) 22:54, 7 August 2024 (UTC)

Does a high debt-to-GDP ratio reduce the effectiveness of fiscal stimulus?

I've heard a couple of people mention recently that the higher a nation's debt-to-GDP ratio gets, the less effect that fiscal stimulus has on the economy. (This has usually been said in the context of the US federal stimulus of 2020-2021.) So I came to Wikipedia to find out whether this was a notable issue, but can see no mention of it in the article. I did come across a study and journal article titled "Fiscal Stimulus in Times of High Debt: Reconsidering Multipliers and Twin deficits" published by the European Central Bank that does seem to indicate that there's some truth to this idea. I'm not an economist, however, so perhaps someone with more knowledge than I could look into this issue and add a summary to this article, as I think it's an important issue for the world in this post-Covid-19 recovery season. -- SimonEast (talk) 09:51, 12 February 2021 (UTC)