Download HOW AmericA`s nAtiOnAl DeBt stAcKs UP

graph national
HOW America’s national DEBT STACKS UP
A
JAPAN
ITALY
UNITED STATES
FRANCE
UNITED KINGDOM
CANADA
GERMANY
INDIA
This graph shows national
debt as a percentage of
gross domestic product
(GDP) for the 12 nations
with the largest economies.
SPAIN
BRAZIL
CHINA
RUSSIA
0%
50
100
150
200
250
Government Debt as a Percentage of Gross Domestic Product
source: International Monetary Fund, 2011 estimates
NATION
s the article
“Washington’s
Gridlock” (p. 8) notes, the
U.S. faces a mounting
national debt. To put
this debt in perspective,
economists often look at
it as a percentage of gross
domestic product, or GDP.
GDP is the dollar value
of all goods and services
produced in a nation in a
given year. The higher the
debt is as a percentage of
GDP, the tougher it may
be for a country to pay up.
analyze the graph
1 Canada’s national
2 Which country has
debt is about
______ percent of
its gross domestic
product.
a national debt
that is more than
two times its gross
domestic product?
a
b
c
d
a
b
c
d
60
70
80
90
3 The U.S. and
Italy
Japan
United States
Canada
China have the
world’s two largest
economies. What
is the approximate
difference, in
percentage points,
between the two
nations’ debt-toGDP ratios?
a
b
c
d
about 30
about 50
about 70
about 80
4
he U.S. national
T
debt is about
$14 trillion. Based
on the graph data,
the U.S. gross
domestic product is
about _____.
a
b
c
d
$100 billion
$750 billion
$3 trillion
$14 trillion
5 Brazil and Italy
both have a gross
domestic product
of about $2 trillion.
You can infer from
the graph that
Brazil has ____
than Italy.
a
ore goods and
m
services
b fewer goods
and services
c less debt
d greater debt
discussion questions
1
I n 2000, the U.S. national debt was 57 percent of its gross domestic product. What percentage of the GDP is our debt now? What
factors and expenses do you think might have contributed to this monumental rise?
2
apan uses 60 percent of its tax revenues to pay interest on its national debt. That causes a shortfall in funding for government
J
programs, forcing the government to borrow even more. Do you think Japan will ever be able to break this cycle? If so, how?
3
hat are some reasons that families and businesses take on debt? Under what circumstances, if any, should a government be
W
willing to take on debt? Explain.
4 •
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