1.   
Week 4 Discussion Question 1 – National debts around the world

Instead of measuring national debts as amounts expressed in currency, economists also measure national debts as a percentage of a national economy’s gross domestic product. You can find a list of some debt to GDP ratios at the following website for the World Bank:

http://data.worldbank.org/indicator/GC.DOD.TOTL.GD.ZS

Several questions come to mind:

1. What country in the world has the highest debt to GDP ratio on this website?

2. What country in the world has the lowest debt to GDP ratio?

3. What debt to GDP ratio level do you think would be too high for a national economy?

2.   
Week 4 Discussion Question 1 – A closer look at the U.S. national debt

As noted on the Bureau of the Public Debt website, the cumulative debt of the United States government is $17,281,222,665,378.63 at present. One interesting observation about the national debt is that it has two different components: the debt held by the public (the larger component) and intergovernmental holdings (the smaller component). The debt held by the public represents debt that the federal government owes to parties outside of the government including domestic and foreign individuals, domestic and foreign businesses, and foreign governments.

What would intergovernmental holdings represent? Try to provide an example of intergovernmental holdings.

3.   
Concluding thoughts on:Week 4 Discussion Question 1

One of the consequences of a large national debt is the financial impact that the debt can have on a national government’s annual budget. For example, the annual and monthly interest payments on the U.S. national debt are rather sizable; you can find current data on these figures at the following U.S. Department of the Treasury website:

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

The size of the current budget of the U.S. federal government can be found at the White House website:

http://www.whitehouse.gov/omb/budget

Based on the current budget of the federal government, what percentage of the overall budget is taken up by interest payments on the national debt?