In response to widespread debt fears, Fisher Investments released a new infographic providing facts and historical perspective on US debt. The piece answers three key questions:
1. Who currently owns US debt? Although many folks complain the US is dangerously over-indebted to “foreigners,” US investors actually hold most federally issued debt. In fact, together, the Federal government and domestic investors own almost 70% of all outstanding debt. Countries like China and Japan hold less than 8% of US debt each.
2. Does the US have too much debt? While US net public debt as a percent of GDP is currently elevated, it remains below past peak points. Furthermore, Fisher Investments research shows other countries have had even higher aggregate levels of debt-to-GDP historically. For example, the UK had a debt-to-GDP ratio of over 100% for nearly the entire period from 1750 to 1850—around the same time they were a global economic and military superpower. And since then, their economy generally seems to have done okay.
3. Can the US afford its debt? Because of historically low interest rates, US debt is more affordable today than many realize. In fact, America’s debt interest payments are now lower than they were for nearly the entirety of the 1980s and 1990s—and half what they were from 1984 to 1996—both periods of relative strength for both stocks and the economy.
To access Fisher Investments’ infographic, visit http://www.flickr.com/photos/fisher-investments/
About Fisher Investments
Founded in 1979, Fisher Investments is an independent, privately-owned money management firm with tens of billions under management. Fisher Investments maintains two principal business units, Fisher Investments Institutional Group and Fisher Investments Private Client Group, which serve a global client base of diverse investors. Fisher Investments’ clients include over 100 large institutions and over 25,000 high net worth individuals. Founder and CEO Ken Fisher has written the Forbes "Portfolio Strategy" column for 27 years, has written 8 books on investing and personal finance (5 of which are bestsellers), and was recently named by Investment Advisor magazine as one of the 30 most influential industry individuals in the last 30 years (Thirty for Thirty, May 2010).
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