Thanks again Barack – On Fiscal Matters, Estonia Beats U.S.

March 23, 2011 09:38

The analysis measured three facets of fiscal sustainability. Sovereign governments were ranked on the current level of debt as a percentage of gross domestic product, the number of years until a nation’s debt level is so high it would trigger a funding crisis and the transparency and enforcement connected with the budget process. – WSJ

By Kathleen Madigan at The Wall Street Journal


Another salvo has been shot in the battle over Washington’s debt overhang. But will trailing behind Estonia in fiscal responsibility prompt Americans to take serious action?

According to the analysis, Australia leads the pack, followed by New Zealand and Estonia. The U.S. hangs in the neighborhood populated by Italy, Hungary and Ireland. Greece was ranked last.

For the U.S., the Initiative calculated the debt level now equals 62.4% of GDP; and given current budget and economic-growth trends, the U.S. will hit a debt ceiling in 16 years. (Unlike Washington’s legislated “debt ceiling,” the analysis defines the debt ceiling as the amount of future debt a country could theoretically issue before it is almost sure to have a crisis in which few investors want to hold the sovereign debt.)


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