Debt has dominated the national debate since the U.S. escaped economic free-fall in early 2009. Conventional wisdom suggests that America has been particularly profligate, but in fact American consumers and institutions aren’t worse off than their counterparts in other developed nations. The most striking aspect of these numbers is the small amount of debt that American financial institutions have relative to U.S. GDP. This could ultimately be a weakness for the financial system, however, as the debt of U.S.-based financial institutions isn’t low in absolute terms, only in comparison to America’s very large GDP. The large size of the American economy (and the proportionate financial capacity of the American government) has served to reinforce the market’s belief that too-big-to-fail banks will always get bailed out.
Total Debt as a percentage of GDP: 279%
Nonfinancial Corporations: 72%
Financial Institutions: 40 %
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