GDP to Debt

[tali1]

How come Greece is bankrupt and spain is facing ruin with 87% GDP to Debt? and yet UK has same and is not going bust and many other nations have far worse than Greece and Spain - with Japan highest at over 200%?
Is GDP to Debt the realistic indicator of collapse? -or does it have to be used with other stats?What about debt per head?
Thanks

[Newc]

You do have to consider a few other things, in particular domestic savings rate, absolute size and breadth of economic activity, ability to control its own currency and exchange rate, and likely future growth prospects. All these things are in favour of the UK and Japan when compared to the smaller squeezed EZ economies.

Nonetheless your base assessment is correct. Japan is going bust, but very very slowly. There are no positive trend items for the Japanese economy at all, unless the offshore gas fields they reported recently do turn out to be viable.

The UK is already bust and going buster, because public spending is still growing. At some point, and sooner rather than later, the bond markets will say "enough" and interest rates will jump. While it's clear that UK individuals and corporations are paying down debt, the ratios are still at historic highs and a return to 7%+ base rates is really going to make a mess.

[Art0ir]

We have control of our own currency.

[Newc]

Meant to say: just to give you an idea of the scale of the problem, UK public spending needs to be cut across the board by 5% per year, every year for 5 years, just to break even with tax revenue. And then further cuts are needed to give a budget surplus, and only then can the massive accumulated debt start to be paid down.

[Kudos]

Cash flow?

[jeff m2]

Helps to be a member of the club.

[Lawrence5]

Own currency and much of the debt is between the government and the Bank of England, owned by the government. Not the same as owing Germany and the zero flexibility and clueless policies of the ecb

[ringram]

BOE can QE on demand.

PIIGS cannot.

Look at Japan debt to GDP to see that debt is a useless metric for countries that control their own currency.