Chart of manufacturing production by the top 10 manufacturing countries (2000 to 2010). The chart was created by the Curious Cat Economics Blog. You may use the chart with attribution. All data is shown in 2010 USD (United States Dollar).

In my last post I looked at the output of the top 10 manufacturing countries with a focus on 1980 to 2010. Here I take a closer look at the last 10 years.

In 2010, China took the lead as the world’s leading manufacturing country from the USA. In 1995 the USA was actually very close to losing the lead to Japan (though you wouldn’t think it looking at the recent data). I believe China will be different, I believe China is going to build on their lead. As I discussed in the last post the data doesn’t support any decline in Chinese manufacturing (or significant moves away from China toward other South-East Asian countries). Indonesia has grown quickly (and have the most manufacturing production, of those discussed), but their total manufacturing output is less than China grew by per year for the last 5 years.

The four largest countries are pretty solidly in their positions now: the order will likely be China, USA, Japan, Germany for 10 years (or longer): though I could always be surprised. In the last decade China relentlessly moved past the other 3, to move from 4th to 1st. Other than that though, those 3 only strengthened their position against their nearest competitors. Brazil, Korea or India would need to increase production quite rapidly to catch Germany sooner. After the first 4 though the situation is very fluid.

Taking a closure look at the large group of countries after top 4. Chart of manufacturing production from 2000-2010.

Chart of manufacturing production by the leading manufacturing countries (2000 to 2010). The top 4 countries are left off to look more closely at history of the next group. The chart was created by the Curious Cat Economics Blog based on UN data. You may use the chart with attribution.

Removing the top 4 to take a close look at the data on the other largest manufacturing countries we see that there are many countries bunched together. It is still hard to see, but if you look closely, you can make out that some countries are growing well, for example: Brazil, India and Indonesia. Other countries (most in Europe, as well as Mexico) did not fare well in the last decade.

The UK had a particularly bad decade, moving from first place in this group (5th in the world) to 5th in this group and likely to be passed by India in 2011. Europe has 4 countries in this list (if you exclude Russia) and they do not appear likely to do particularly well in the next decade, in my opinion. I would certainly expect Brazil, India, Korea and Indonesia to out produce Italy, France, UK and Spain in 2020. In 2010 the total was $976 billion by the European 4 to $961 billion by the non-European 4. In 2000 it was $718 billion for the European 4 to $343 billion (remember all the data is in 2010 USD).

Mexico is left of that comparison (and I would expect them to be below all the others in the comparison – but also substituting them for any of the 4 I would still believe those 4 countries would out-manufacture the European group. Also adding Russia to the Europe group and Mexico to the other group I would also expect the non-Europe group to manufacture more. I actually think Mexico has great potential but they did not have a particularly good decade and need to do a better job to realize their potential (being right next to the USA is a great advantage).

From 2000 to 2010 China grew manufacturing output by 298%. India was next at 232% and Brazil followed with 193%. The UK performed the worst, up just 2%, while Japan was up 5%. The USA was next worst up just 22% for the decade, which while still an increase. For decades there has been all sorts of talk about how the USA doesn’t manufacture anything anymore. This is just false. It is true that manufacturing jobs have been disappearing but this is a global phenomenon (even in countries growing manufacturing very quickly). It is also true the rest of the USA economy is growing faster than manufacturing output over the last few decades and so the percentage of manufacturing compared to the overall economy has shrunk (but this is due to higher growth elsewhere – manufacturing continues to increase). 2011 may actually have been quite a good year for manufacturing in the USA.

Related: Chart of Largest Petroleum Consuming Countries from 1980 to 2010 – USA, China and Japan Lead Manufacturing Output in 2008 – Manufacturing Employment Data: USA, Japan, Germany, UK… 1990-2009 – Top 15 Manufacturing Countries in 2009 –

The last few years I have had to estimate China’s manufacturing output (to separate out mining production), this year the data is provided using the same criteria for each country: manufacturing comprises units engaged in the physical or chemical transformation of materials, substances, or components into new products (see more detail). Economic data is never perfect and when you are comparing between countries it gets even more difficult (and the measurement discrepancies distort the data – compared to the state you are trying to measure). But still the data useful and interesting; understanding it includes some noise.

Chart of output by top 10 manufacturing countries from 1980 to 2010. The chart was created by the Curious Cat Economics Blog based on UN data. You may use the chart with attribution.

China has finally actually taken the lead as the largest manufacturer in the world. Reading many news sources and blogs you may have thought the USA lost the lead a couple of decades ago, but you would be wrong. In 1995 it looked like Japan was poised to take the lead in manufacturing production, but they have slumped since then (still they are solidly the 3rd biggest manufacturer). China has been growing manufacturing output enormously for 20 years, and they have now taken the lead from the USA.

As I have been saying for years the biggest economic story about manufacturing is the dramatic and long term increase of productive capacity in China. The next is the continuing global decline in manufacturing employment: increased productivity has seen production rise year after year and employment fall. What is the next most interesting stories is debatable: I would say the continuing failure to appreciate the continuing strong manufacturing production increases by the USA. Another candidate is the the decline in Japan. Another is the increase in several other counties: Korea, Brazil, India, Indonesia…

Looking more closely at some of the long term data shows how much China stands out. From 1980 to 2010 China increased output 1345%. The total top 10 group increased output 302% (all data is in 2010 USD). From 1995 to 2010 China increased output 543%. The group increased 64%. For 1980-2010, the results for the other 3 largest manufacturing countries are: USA up 218%, Japan up 261% and Germany up 148% (other countries doing very well are Korea up 1893% and India up 737%). Looking at the last half of that period, from 1995-2010 the: USA up 44%, Japan down 11% and Germany up 19%.

You can that the other largest manufacturing countries fail to keep up with the increases of the entire group of the top 10. China’s gains are just too large for others to match. If you remove China’s results (just to compare how the non-China countries are doing) from 1980-2010 the increase was 216% (so compared to the other 9 top manufacturers over this period the USA was even and Japan better than the average and Germany was worse). And from 1995-2010 the top 9 group (top 10, less China) increased just 28%: so the USA beat while Japan and Germany did worse than the other 9 as a group.

So you can see even with China growing manufacturing output enormously most other countries are also increasing manufacturing output (no matter how may articles talk about disappearing manufacturing in the USA and Europe), in constant dollars. The growth in output globally has been tremendous – largely driven by growing demand in China, India, Korea, Brazil, Mexico, Malaysia… in addition to growing demand in USA, Japan, Germany, UK, France, Italy… In the next 20 years more of the growth is likely to be in the first group listed in the previous sentence (as well as in Africa, if we are lucky – there are many good signs from Africa in the last 10 years).

Another interesting story, in the long term, is that Europe fell to just 5 of the top 10 countries this year and is likely to lose more. Brazil, Korea and India are not likely to be overtaken. Those three have the fastest growth rates since 1995 (other than China) and look to be in place to continue increasing capacity more than the others. On the verge of breaking through are: Russia, Mexico and Indonesia. Spain, recently replaced by India, doesn’t seem likely to get back into the top 10. France and the UK have the slowest growth rates for 1980-2010 and 1995-2010 (other than Japan from 1995-2010).

Several years ago you started to see stories about manufacturing moving from China to Vietnam or Thailand or some other countries for cheaper labor. I wondered about this so I looked at these countries and the total manufacturing output was lower than the amount China was increasing production by each year. Guess what, that is still true. In 2010 China increased output by $311 billion. Granted that was an enormous increase. So lets look at the average increase over the last 5 years, which is $196 billion.

A country with a total output of $196 billion would be in 12th place (Russia is at $209 billion – then you have $170-180 billion range, including Mexico, Indonesia and Spain). Total manufacturing production by several other countries: Thailand $113 billion, Malaysia $52 billion, Philippines $42 billion, Vietnam $20 billion (yes, barely over 10% of China’s yearly increase).

Can China increase output by $196 billion each year over the next 10 years, I very much doubt it. I would expect it to grow output, however. I also expect the USA to grow manufacturing output over the next 10 years. If I had to pick the top 10 manufacturing countries for 2020: China, USA, Japan, Germany, India, Brazil, Korea, Indonesia, Mexico, France. We will see how things turn out.

I will be adding a post tomorrow, looking more closely at the most recent period for the top manufacturing countries. And I will be posting more frequently on manufacturing data, and also economic data in general, in 2012.

Related: Countries with the Most Manufacturing Production from 1980 to 2009 – Manufacturing Output as a Percent of GDP by Country 1980 to 2008 – Manufacturing Data, Accuracy Questions – Manufacturing Jobs Data: USA and China (1990-2005)

You can’t expect members of the Dividend Aristocrats to match the dividend increases shown here. As companies stay in this screen of companies the rate of growth often decreases as they mature. Also some have already increased the payout rate (so have had an increasing payout rate boost dividend increases) significantly.

The chart also shows that a smaller current yield need not dissuade investing in a company even when your target is dividend yield, giving the large dividend increase in just 10 years. Nucor yielded just 1.5% in 2000 (at a price of $10). Ignoring reinvested dividends your current yield on that investment would be 14.5%. To make the math easy 10 shares in 2000 cost $100, and they paid $1.50 in dividends (%1.5). Dividends have now increase so those 10 shares are paying $14.50 in dividends (14.5%). Of course Nucor worked out very well; that type of return is not common. But the idea to consider is that the long term dividend yield is not only a matter of looking at the current yield.

The period from 2000 to 2011 was hardly a strong one economically. Yet look at how many of these companies dramatically increased their dividend payouts. Even in tough economic times many companies do well.

Related: Looking for Dividend Stocks in the Current Extremely Low Interest Rate Environment – Where to Invest for Yield Today – 10 Stocks for Income Investors

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In 2007 wind energy capacity reached 1% of global electricity needs. In just 4 years wind energy capacity has grown to reach 2.5% of global electricity demand. And by the end of 2011 it will be close to 3%.

By the end of 2011 globally wind energy capacity will exceed 240,000 MW of capacity. As of June 30, 2011 capacity stood at 215,000. And at the end of 2010 it was 196,000.

As the chart shows Chinese wind energy capacity has been exploding. From the end of 2005 through the end of 2011 they increased capacity by over 3,400%. Global capacity increased by 233% in that period. The 8 countries shown in the chart made up 79% of wind energy capacity in 2005 and 82% at the end of 2010. So obviously many of other countries are managing to add capacity nearly as quickly as the leading countries.

USA capacity grew 339% from 2005 through 2010 (far below China but above the global increase). Germany and Spain were leaders in building capacity early; from 2005 to 2010 Germany only increased 48% and Spain just 106%. Japan is an obvious omission from this list; given the size of their economy. Obviously they have relied heavily on nuclear energy. It will be interesting to see if Japan attempts to add significant wind and solar energy capacity in the near future.

Related: Nuclear Power Production by Country from 1985-2009 – Top Countries For Renewable Energy Capacity – Wind Power Capacity Up 170% Worldwide from 2005-2009 – USA Wind Power Installed Capacity 1981 to 2005 – Oil Consumption by Country 1990-2009

In trying to figure out a good way to create another income stream I thought of the idea of consulting over the internet in very small chunks of time. I explored the options to be a consultant that way and they were not good. But the idea seemed excellent to me and I worked with a friend to develop the idea of us creating such a online service. The potential was great I think. The end service would provide value to those seeking answers and those providing consultation (and to us).

We did get a domain and plan out the service and begin coding the application but didn’t progress very far. It was still a great idea and something I planned to consider if I had a bit more time. Well there is now an offering that appears to actually be fairly decent (on first glance): Minute Box.

Minute Box allows you several of the things we planned on offering (but not all of them – at least not yet). You can register as an expert and then be available for those wanting advice. You sign in when you are available to answer questions (and people can send you a note while you are offline). You set your rate. Essentially IM is used for consultation and the billing is taken care of by Minute Box.

One of the keys is matching people to experts well. Minute Box does one thing we planned on doing, which is to emphasize the experts tapping those that already value their advice. This would work very well for bloggers and those with an online presence and reputation.

I signed up and created my expert account, so if you want to get some advice from me you can get consulting by the minute from John Hunter.

I think this consulting by the minute model is a great way to create a secondary income stream for those that have a positive online reputation. You can adjust your pay to manage demand. If you have a free week and want to make some extra income you can reduce your rate and offer your readers a special discount. This is potentially a great way to capitalize on your expertise. I haven’t had much experience with Minute Box yet so it isn’t certain they are the answer (but I haven’t seen any other solution that is very good). And no matter the service provider used, I believe the internet enabled micro consulting is a great way to provide some extra income and make your personal finances more robust.

The range of advice you can offer is huge. For nearly anything there are people that need advice: how to cook thanksgiving dinner, helping a child with math homework, fashion advice, editing a resume, which mortgage offer is better in a specific situation, fixing a bug in a WordPress blog, what are good plants for a shady area… The list is nearly endless.

I wish I had been able to create a web site to facilitate this process. I believe the potential is huge. That is why I was so interested in making this idea work. It is the only web business I have seriously considered (and even started). I have numerous web sites but they involve providing content online not any software as service businesses.

Related: Earning More Money – Save Some of Each Raise – If you can’t pay cash, earn more money or save until you have the cash

Those that conflate freedom in every form and free markets don’t understand that free markets are a tool to and end (economic well being for a society) not a good in and of themselves. Politically many of these people just believe in everyone having freedom to do whatever they want. Promoting that political viewpoint is fine.

When we allow them to discredit free market capitalism by equating anti-market policies as being free market capitalism we risk losing a great benefit to society. People, see the policies that encourage allowing a few to collude and take “monopoly rents” and to disrupt markets, and to have politicians create strong special interest policies at the expense of society are bad (pretty much anyone, conservative liberal, anything other than those not interested in economics see this).

When people get the message that collusion, anti-competitive markets, political special interest driven policies… are what free market capitalism is we risk losing even more of the benefits free markets provide (than we are losing now). That so few seem to care about the benefit capitalism can provide that they willingly (I suppose some are so foolish they don’t understand, but that can’t be the majority) sacrifice capitalism to pay off political backers by supporting anti-market policies.

Allowing businesses to buy off politicians (and large swaths of the “news media” talking heads that spout illogical nonsense) to give them the right to tap monopoly profits based on un-free markets (where they use market power to extract monopoly rents) is extremely foolish. Yet the USA has allowed this to go on for decades (well really a lot longer – it is basically just a modification of the trust busting that Teddy Roosevelt tried). It is becoming more of an issue because we are allowing more of the gains to be driven by anti-competitive forces (than at least since the boom trust times) and we just don’t have nearly as much loot to allow so much pilfering and still have plenty left over to please most people.

I am amazed and disgusted that we have, for at least a decade or two, allowed talking head to claim capitalist and market support for their special interest anti-market policies. It is an indictment of our educational system that such foolish commentary is popular.

Free Texts Pose Threat to Carriers

This is exactly the type of behavior supported by the actions of the politicians you elect (if you live in the USA).

It is ludicrous that we provide extremely anti-market policies to help huge companies extract monopoly profits on public resources such as the spectrum of the airwaves. It is an obvious natural monopoly. It obviously should be managed as one. Several bandwidth providers provide bandwidth and charge a regulated rate. And let those using it do as they wish. Don’t allowing ludicrous fees extracted by anti-free-market forces such as those supporting such companies behavior at Verizon, AT&T…

Related: Financial Transactions Tax to Pay Off Wall Street Welfare Debt – Extremely Poor Broadband for the USA (brought to us by the same bought and paid for political and commentary class) – Ignorance of Capitalism – Monopolies and Oligopolies do not a Free Market Make

I guess the 99% are protesting against the culture of allowing bought and paid for politicians to put their donors interests above the countries interets. But this is no change from what has been going on for a long time. The “solution” is easy. Elect people with ethics and a concern for the country instead of those that are bought and paid for. But we have shown no interest in doing so, and don’t show much of one now. My prediction is we will chose to elect the same people have sold the countries interests down the road for decades.

Those that believe in special interest politics and against free market capitalism (instead supporting large business special interests against the free market system) dominate the talking head and political leaders in the USA. Until that changes nothing will change in any real way. yes occasionally you will have minor successful measures such as restricting some of the abuses by large banks (while allow most of the abuses to continue instead of dealing with the problem of restraint of competition and free markets) but the effectiveness of such measures is very limited.

All we have to do to change is elect smart, decent, ethical people like Elizabeth Warren. But we need to elect hundreds of them. There are probably 20 or 30 in Washington now but that can’t do much against the bought and paid for politicians.

I understand the sensible criticism of overregulation. Fools that think the EPA is a bad thing are another matter entirely. Criticizing the poor implementation of regulations, is a good expenditure of resources. Debate over how we regulate externalities in the markets. Perfectly sensible. Market based solutions are great. I understand some far out people will even argue for not regulating pollution and the like (those that think the EPA needs to be abolished for example – the EPA is already so de-neutered it is amazing to see people still fighting against the institution). Fighting against bad regulations or execution, yes, sure, that makes lots of sense. But the idea that we shouldn’t have the government concerned about the externalities of pollution for our health is crazy. There is no other way to see it. We are all free to have crazy ideas. We shouldn’t be taken seriously when we do, however. Mostly, it isn’t crazy, but paying off people giving large amounts of cash in order to have special rules to allow them to harm society. Why we accept such behavior from anyone we take seriously is beyond me.

Visa, Mastercard Accused of Price Fixing

It is pretty obvious ATM fees are ludicrously high. The most likely reason (given the political economy culture [essentially the support of anti-market forces that aim to help interests collect profits gained by restricting the ability of the market to provide value to society] we have right now) for such a situation is collusion to prevent free markets from providing value to society and instead a few players extracting profits from anti-market policies.

We should also note that in many locations (all?) we have allowed the judicial branch to be bought and paid for as well as the legislative branch of government. The executive branch is bought less directly with “capture” by the regulated and the promise of jobs that pay well later, for those who provide favors today (plus, of course, buying the political leaders at the top of the executive branch). Also the top of the executive branch organizations are often seeded directly by those that gave the politicians money. This is a very bad situation. And the corruption it leads to is not something that is easy to fix. When even the judicial branch is so highly tainted it is a very bad state of affairs.

One of the most important things you can do is be sure you have disability coverage. In the USA about 50% of the jobs provide coverage. If your job does not you should get insurance yourself. Many companies may not pay for disability insurance but may allow you to pay for it (this often can be the best option as the company can gain a better price than individuals but you have to check out the details). Also social security includes some disability insurance coverage but it is very limited. Relying on social security alone is not wise. For one thing it does not protect you from being unable to do your current job but will only pay benefits if you are unfit to do any job.

There are numerous factors to consider for disability insurance. Normally a long term disability insurance policy will pay 50-60% of your salary (be sure to check and see, and check if there is any cap). The terms of the policy will also determine how long you will be paid, being paid until at least 65 is what I would suggest – but some only pay for a limited number of years.

Often policies will offer pro-rated benefits if you earning power is reduced by a disability but you are still able to earn something. So you may have a policy that pay 60% of your original salary but if you make 50% of your previous salary then the payout is reduce to say 20%. So if you originally made $80,000 and now, due to a disability (not just losing your job), you could no longer do your job but could do one that paid less – say $40,000. You would then get your new salary of $40,000 + $16,000 in disability payments or $56,000.

Another detail you should check is whether the payments you will receive are indexed to inflation. In addition, make sure the policy is guaranteed renewable. You also want to buy from a reputable insurance company (check AM Best, Moody’s, Weiss rating agencies). It doesn’t help to have a guaranteed renewable policy if the insurance company goes out of business.

Another thing to consider is buying additional disability coverage. For example, if your company provides a 60% coverage policy it is often possible to purchase addition coverage (to provide additional benefits of 10% or 20% or more of your current salary).

A rough guide is disability insurance will cost 1-2% of the income replaced. For example, a policy replacing $50,000 per year of annual salary would cost about $1,000 per year. Of course, the older or sicker you are the higher the cost. Premiums are based on risk factors, so if you have health risks that will cost more. And, as age is a significant disability factor, the older you are the higher the cost will be.

Remember if you have disability insurance through work, and lose you job you need to get your own disability insurance. This is yet another reason to have an adequate emergency fund.

Related: Personal Finance Basics: Long-term Care Insurance – Personal Finance Basics: Health Insurance – How to Protect Your Financial Health – Life Happens: disability insurance

The chart showing manufacturing output by country was created by the Curious Cat Economics Blog based on UN data (in 2009 USA dollars). You may use the chart with attribution.

The large decline in Germany was 23%. This was a 18% decline in Euro terms, and when you added the decline of the Euro the total USA dollar decline was 23%. Quite extraordinary. Most European countries were down over 15%. In fact, so extraordinary it makes me question the data. World economic data is useful and interesting but it isn’t perfect. USA manufacturing declined just .5%. China increased manufacturing production by 9%.

The last 2 years, China has stopped separating out mining and utilities from manufacturing. The percentage of manufacturing (to manufacturing, mining and utilities) was 78% for 2005-2007 (I used 78% of the manufacturing, mining and utilities figure provided in the 2008 and 2009 data – but that could be wrong). The unadjusted 2009 China total was $2.05 trillion and for the USA the total manufacturing, mining and utilities was $2.33 trillion. In 2009, the manufacturing total was 76% of USA manufacturing, mining and utilities. The percentage varies significantly between countries (the Russian federation is about 55% and Japan about 91%) and various over time as a countries economy changes.

The big, long term story remains the same. China has continued to grow manufacturing output tremendously. I see very little data to support the stories about manufacturing having to leave China to go elsewhere (especially when you look at the “lower wages” counties mentioned in news stories – they are not growing at any significant rate). The USA is still manufacturing a huge amount and that production has steadily grown over time.

When you look back over the period from 1980 to today you can see

1. The biggest story is the growth in Chinese manufacturing
2. The USA started out the largest and has grown significantly
3. Japan did very well from 1980 to 1995, and since they have struggled
4. The USA, China, Japan are really far ahead of other countries in total manufacturing output, and Germany is solidly in 4th place.
5. After that the countries are fairly closely grouped together. Though there are significant trends hidden by the scale of this graph, which I will explore in future posts. South Korea has growth significantly over this period, for example.
6. The biggest macro trend that the data shows, but is not so visible in this chart (other than China’s growth), is the very strong performance of emerging markets (and in fact some counties have fully become manufacturing powerhouses during this period, most notably China but also, South Korea and Brazil). And I see that continuing going forward (though that is speculation).

Two more interesting pieces of data. Italy is the 5th largest manufacturing country, I don’t think many people would guess that. Since 1980 Italy surpassed the UK and France but China rocketed passed them. And Indonesia has moved into 14th place, edging out Canada in 2009.

I plan to take more time in 2011 to look at global manufacturing and other global economic data more closely and to write about it here.

Related: Data on the Largest Manufacturing Countries in 2008 – Top 12 Manufacturing Countries in 2007 – Top 10 Manufacturing Countries 2006 – Leading global manufacturers in 2004

Someone has to sell the call option. The seller gives the buyer the right to buy a stock at a certain price by a certain date. A speculator can do this and take the risk that the price will not rise to the level where a person chooses to exerciser their option. The also carries a significant risk, as if the stock price rises the speculator that sold the option has to either buy the option back (at a significant cost) or provide the stock (which they would have to purchase on the market). In order to trade in options you must be approved by the broker (at least in the USA) as an investor with the knowledge, finances and goals for which options trading is appropriate.

An investor can also sell an option to buy a stock they own – this is called selling a covered call option. This means you get the price the speculator is willing to pay to buy the option and may have to sell the stock you own if the person holding the option chooses to exercise it.

Lets look at an example. Lets say you own some Amazon stock. It has been doing very well and lets say you are considering selling it. One option is just to sell it. Today for example you could have sold Amazon for $165 a share (or $16,500 for 100 shares). Lets say you didn’t want to sell at $165 but thought $175 would be a price you would be willing to sell your shares for. You could put in a limit order to sell when it reached $175 (and if it did you would received ($17,500). Or you could sell an option to buy your 100 shares of AMZN at $175 by December 18th of this year. Today you could have sold that option for $675.

If Amazon doesn’t reach $175 you just made $675 and otherwise your portfolio is identical to what it would have been otherwise. If it goes to $175 then you can have it bought at $175 and then you make ($17,500 + 675 = $18,175). Now it is a bit less straight forward than this. If you put in a limit order and it goes up you will sell your stock and have your cash. Selling someone the option to buy it doesn’t require them to buy it. The price could go to $180 and they keep waiting (often options are not exercised – especially since normally they are mainly used by speculators). If it then fell to $165 before December 18th you still own it (and it is worth less than if you sold at $675). If the price is above $175 on December 18th then it will be exercised.

Related: Covered Call Options, etc. – books on stock investing – selling stock short

The chart shows gross government debt as percentage GDP from 1990-2009. By Curious Cat Investing and Economics Blog, Creative Commons Attribution. Data source: IMF

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There are plenty of reasons to question this data but I think it gives a decent overall picture of where things stand. It may seem like government debt should be an easy figure to know but even just agreeing what would be the most reasonable figure for one country is very difficult, comparing between countries gets even more difficult and the political pressures to reduces how bad the data looks encourages countries to try and make the figures look as good as they can.

The poster child for irresponsible spending is Japan which has gross government debt of 218% of GDP (Japan’s 2009 figure is an IMF estimate). Greece is at 115%. Gross debt is not the only important figure. Government debt held within the country is much less damaging than debt held by those outside the country. Japan holds a large portion of its own debt. If foreigners own your debt then debt payments you make each year are paid outside your country and it is in essence a tax of a portion of your economic production that must be paid. If the debt is internal it mean taxpayers have to support bond holders each year (but at least when those bondholders spend the money it stays within your economy).

The USA debt stood at 64% in 1990, 71% in 1995, 55% in 2000, 61% in 2005, 71% in 2008 and 84% in 2009. Most rich countries saw significant increases in 2009 and will again in 2010. The IMF sees the USA going to 93% in 2010 and 103% in 2012. They see Germany at 75% in 2010 and 77% in 2012. They see the Greece increasing to 144% in 2012 and Japan to 239%.

Hong Kong has maintained gross government debt under 2% every year. Taiwan was 35% in 2005 and 40% in 2009, IMF estimates they will be at 37% in 2012. Singapore was 93% in 2005, 106% in 2009 with an estimate for 93% in 2012. Brazil had a 69% debt level in 2005, 69% in 2009 and the IMF has a 2012 estimate of 66%. Mexico had a 40% level in 2005, 45% in 2009 and is estimated to stay at 45% in 2012. Thailand, Turkey, Venezuela are under 50%; Malaysia and Argentina are under 60%. India was at 79% in 2005, 74% in 2009 and is estimated to be at 71% in 2012.

Related: Government Debt as Percentage of GDP 1990-2008 – USA, Japan, UK… – USA State Governments Have $1,000,000,000,000 in Unfunded Retirement Obligations – The USA Economy Needs to Reduce Personal and Government Debt – Oil Consumption by Country in 2007

Gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of SDRs, currency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable. Thus, all liabilities in the GFSM 2001 system are debt, except for equity and investment fund shares and financial derivatives and employee stock options. Debt can be valued at current market, nominal, or face values (GFSM 2001, paragraph 7.110).