debt to gdp ratios

If national debt is unavoidable, what’s the optimal Debt-to-GDP ratio?

Ideally, “no debt is good debt.” However, in the real world countries incur national debt. What’s the maximum or optimal amount of debt any industrialized country should ever have in comparison to its Gross National Product (GDP)?

every economist will probably think differently.

Where i go to school i’ve met economists that believe this number should be below 0.5 in order to avoid drastic inflation, etc. Others believe it should be anywhere below 1.0 (which is kind of a no brainer). Most Western nations (with the exceptions of Australia and Canada) have their ratios above 0.5. There are some nations in this world that are actually debt free (such as Kuwait). But that doesn’t necessarily mean the citizens benefit or suffer… it’s just a matter of keeping the books straight. In a strange sense it’s kind of like running a household… you don’t want too much debt so you can’t pay for it… but you don’t just want to make the minimum monthly payments either becaseu you’ll end up paying three times over in interest rates.

Currently the US isn’t actually doing that bad… number is somewhere between 0.6 and 0.64. The actual monetary amount of debt in US dollars seems very high, but considering the size of the GDP it’s not enormous. Germany and France have a similar debt to GDP ratio.

You can find lots of information about this stuff on the OECD website.