The United States isn’t quite cash-strapped Greece, but it ranks fifth highest in debt among the world’s largest economies, according to a new analysis on Wednesday.
The Associated Press Global Economy Tracker, which is based on data from 30 of the biggest economies around the world, found that U.S. debt was equivalent to 95 percent of the Gross Domestic Product in the first three months of the year.
Only Japan, Greece, Thailand and India had higher debt as a percentage of their GDP.
Every year that the U.S. government spends more than it collects in taxes, it records an annual budget deficit. The current $14.3 trillion debt is the sum of all annual deficits and surpluses.
U.S. taxes are lower than they have been in more than half a century and are lower than those collected by other countries around the world. At the same time, government spending is rapidly growing as health care costs continue to grow, the AP said.
“We as a society will either have to pay more for our government, accept less in government services and benefits, or both,” Douglas Elmendorf, director of the nonpartisan Congressional Budget Office told the AP. “For many people, none of those choices is appealing — but they cannot be avoided for very long.”
In Japan, where health care costs are high and the economy has struggled for more than a decade, the government’s debt totals 244 percent of the GDP. In Greece it’s 161 percent, in Italy it’s 113 percent, while in Thailand it’s 111 percent. The United States is next on the list.
A ratio above 90 percent starts to inhibit economic growth, in part by forcing interest rates up, according to economists Kenneth Rogoff of Harvard University and Carmen Reinhart of the Peterson Institute for International Economics, the AP reported.
Australia is at the bottom of the AP’s list, with its debts totaling 14 percent of its first quarter GDP.