What is the largest National debt to GDP ever held?

December 23, 2008 6:25 AM

What is the largest National debt to GDP ever held?

Historicaly speaking, with all relative rates of inflation applied, what is the largest national debt ever held?

I ask the question because david cameron (leader of UK opposition) recently stated that the UK is "the most indebted nation on earth, ever!"

UK national debt current stands at £1.3 trillion
divided by GDP this is 300%

US national debt is around $10.6 trillion
but divided by GDP its only 69%

Is this GDP to national debt at 300% really the largest ever?

posted by complience to work & money (8 answers total)

It hit about 120% during WWII

Chart Here:
http://www.optimist123.com/optimist/2005/01/national_debt_b.html

Also I can't find it but someone (I think NYTimes) had a graph of international debt ratios and the US was (suprisingly) middle of the pack.
posted by bitdamaged at 7:18 AM on December 23, 2008

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
posted by mezamashii at 7:20 AM on December 23, 2008

I don't know the answer to your question - but I'm thinking Niall Ferguson's book "The Cash Nexus" which is about the development of the sovereign debt markets from the 1700's to modern times has a few handy charts that will answer your question in the context of the developed world. My copy is at home and I'm at work.

I'm thinking the answer is no though. Post some of the great European wars of the 18-19th centuries there were some insane debt burdens - especially because the central government had much more limitied powers to levy taxes to pay for the military.
posted by JPD at 7:21 AM on December 23, 2008

I just used Amazon to look in the book I referenced - post the Napoleanic Wars the UK was about 270% of GNP. I guess the other question to ask is what is on the asset side of the B/S. For example the money the UK govt spent on Northern Rock and the US gov't spend on Fannie and Freddie bought they lots of home mortgages that have some value. Its not the same thing as spending that money on bullets.
posted by JPD at 7:29 AM on December 23, 2008

it's not clear to me where you're getting your numbers; by most estimates the current UK public debt is ~ £650 billion. that is about 40% of the £2 trillion GDP. even your 1.3T number, which is i think what you get when you include public pension liabilities etc., would only be about 65% of GDP, not 300%.

there are some historical debt/gdp statistics for the OECD nations here but the data only goes back to 1980. (use the drop-down boxes to select "debt as % of gdp" and change the units to percentage.)

by comparison japan's debt to GDP ratio right now is closer to 200%, which is probably the highest in recent history, at least among industrialized nations. places like zimbabwe rack up huge numbers here because of so little economic activity - from a purely mathematical standpoint the record holder is probably one of these, though i don't know how meaningful a statement that is.

as for cameron, i have no idea.
posted by sergeant sandwich at 8:17 AM on December 23, 2008

Does the £1.3 trillion figure not refer to personal debt (credit cards etc.)?

The reported national debt figures are ultimately meaningless as, like so many statistics, they are massaged to the point of irrelevancy. In the UK, for example, wizard dodges like PFI keep enormous sums off the balance sheets. No doubt similar book-cooking goes on elsewhere, and has likely done so for many years.
posted by boosh at 12:29 PM on December 23, 2008

1.4 trillion figure does include consumer debt, its from the IMF

http://news.bbc.co.uk/1/hi/uk/7794294.stm

Public debt is £650 billion which is 44% of GDP, however considering most the UK banks are inpart owned by the government, its arguable to include the two together.
posted by complience at 2:03 PM on December 23, 2008

You might find this paper interesting. I didn't read much but it seems to take a historical look at public debt in Europe and Britain especially.

I found it because I had a hunch that Weimar Germany during the Depression, as one of the most famously debt-addled regimes ever, had to top modern Britain. The tables at the end of the linked paper don't show that to be true exactly, or at least shows interwar French and British debt as at least as crushing as the German debt (though it excludes reparations, which is sort of important...). Anyway, I digress. The paper won't answer the question but maybe it's a piece of the puzzle.
posted by SuperNova at 12:36 AM on December 25, 2008