Thursday, June 23, 2011

When to Worry About Debt

Did you know Greece and the US are in roughly the same financial condition? I didn't either but last night's Daily Show taught me that since Greece's debt per capita is roughly the same as the United States' ($44,000 and $45,000, respectively), we're in the same boat. Yes, yes, it's a comedy show and this interpretation leads to funny conclusions. But it's still a sloppy interpretation; population doesn't matter. Wealth does. A single person can take on the whole of Greece's debt and still be solvent if the are wealthy enough.

So let's instead look at public debt as a percent of GDP. The US's public debt is 92.7% (yes this includes states' debt). Greece's is 130.2%. The US's debt is less than its GDP; Greece's debt is 30% more than its GDP. In other words, entirely different.

So perhaps it's not surprising that Daily Show viewers are sometimes very poorly informed about world events.


Mark M. Goldstein said...

This is a great example of how someone can get the facts right and miss the point. First the daily show is not a news program, it's a comedy show. Therefore, to say that those who watch the daily show are "very poorly informed" is a great example of how facts used to support a false equivalency prevent understanding. The point of the "bit" was to suggest that Greece's debt crisis arose from that country's desire to support its people while the debt crisis here in the US arose from greed, war and our bought and paid for politician's need to support their wealthy masters. Furthermore if your so concerned about people getting the facts why don't you try to do something about the "real" news programs that spout out and out lies without cosequence. I would be willing to bet that those who watch the Daily Show on a regular basis are better informed than those that think Fox News is factual. The Daily Show viewers "get it" while you and all those like you that don't understand the difference between facts, truth and lies don't.

David said...

Actually, most of the U.S. budget goes directly citizens: Social Security, Medicare/Medicaid each are about 20% of the budget. Unemployment/welfare runs about 15%. That's over half the US's budget going to "supporting its people."

David said...

Here's the link which did not replicate itself well in the comment.

Little Nut Tree said...

Thanks for this post! I just came across your blog by searching Google for "debt per capita Greece", precisely because we watched the Daily Show last night and it made me wonder how come Greece is falling to pieces when the US evidently isn't. Before searching "debt per capita" I searched "debt per GDP", but the figures you have are more accurate than what came up for me - don't know why Wikipedia didn't come up as an answer to my search. Anyway, in my case, the Daily Show has caused a viewer to do their own research and become (even) better informed. I'm sure I'm not the only one. There's no excuse for being ill-informed nowadays, regardless of what you watch. :-)
I do agree with Mark above about the intent of Jon Stewart's bit though. And yes, my mouth dropped open when I heard the retirement age in Greece - and I'm European!
So there we are. Thought you might be ever so slightly interested. :-) Thanks again for the post.

Little Nut Tree said...

Having said that, the Wikipedia chart shows Japan with the highest public debt, at over 200% of their GDP. Furthermore, Spain's public debt is well below that of the U.S. at 64.5%, and they are also having protests. So it's clearly not just the public debt ratio to GDP that causes yoghurt-throwing in the streets and so forth. Any thoughts on that?

Little Nut Tree said...

Last one, I swear...I was writing about the politifact article on my blog and in the process came across this: which is pretty close to my own thoughts. There's a difference between being poorly-informed (as you said) and being misinformed (as Jon Stewart said). I promise I'll stop bugging you now.