All of the major countries of the world have outstanding government debt. The United States Government’s debt as a percentage of GDP is relatively large compared with other countries, but far from the largest among the countries in the Organization for Economic Co-operation and Development (OECD). Based on historical data as reported by the OECD, the 31 OECD countries ranged in debt ratios in 2009 from 6 percent of GDP to 126 percent of GDP, with the United States in the higher echelon12. However, each country is different in how it finances its sovereign debt, how robustly its economies grow, and how fair and stable taxation and benefits are across generations and income levels, so the comparison of current debt levels across nations and what they mean for fiscal projections across nations is not well defined. Past accrual of debt is certainly important, but future action encompassed in fiscal projections is a more prudent gauge for comparison.
Several countries have begun to produce long-range fiscal projections in the last two decades. However, comparisons are difficult because the coverage of the reports and the time horizon projected vary across countries. The horizon for most of these reports is less than 75 years, and the projections are not always updated annually. Some of the countries that have produced long-range projections have shown sustainable policies in the long run, although the recent financial crisis will have worsened the near-term budget outlook in almost every country. Early developers of such fiscal projections include Australia, New Zealand, Canada, the United Kingdom, Denmark, Sweden, Norway, and the Netherlands13.
12Central Government Debt, OECD National Accounts Statistics (database) available at http://www.oecd-ilibrary.org/finance-and-investment/total-central-government-debt-2010_20758294-2010-table1 (Back to Content)
13The Organization for Economic Cooperation and Development (OECD) released a policy brief in October 2009 (available at http://www.oecd.org/dataoecd/40/26/43836144.pdf) describing the efforts of different member countries to produce long-term fiscal projections.(Back to Content)