The 10 Most Indebted Governments in the World

While the U.S. might have the most debt of any developed nation in the world in terms of actual dollars, when considering national debt as a percentage of GDP, the U.S. (NYSE:SPY) only comes in seventh. Coming in first place is Japan (NYSE:EWJ), with a whopping $13.795 trillion in debt, just short of the the $14.27 trillion in debt the U.S. carries with its significantly larger economy. While U.S. debt is about 99% of the country’s gross domestic product, Japan’s debt equals 234% of its GDP. Coming in second against Japan in terms of its debt-to-GDP ratio is Greece, where debt is a relatively low 139% of GDP.

Hot Feature: Who Owns U.S. Debt?

Following Greece on the list is Italy (NYSE:EWI), then Iceland, Belgium, Ireland, and the U.S. So why isn’t Japan enduring the same kind of financial crisis that so many countries with significantly less debt are currently facing? The answer is simple: Japan owes most of its debt to itself. In comparison, the U.S. owes about 30% of its debt to foreign investors, with China (NYSE:FXI) holding $1.1 billion in U.S. debt, more than any other country.

In total, about $4.4 trillion of U.S. government debt is held by foreign investors. The rest is held by U.S. investors. The Federal Reserve and intragovernmental holdings have the largest share of U.S. government debt with $6 trillion, while state and local governments as well as private holders account for another $3.8 trillion of U.S. debt.

When looking at debt in terms of its ratio to GDP, one might be surprised to find that France comes in at number 9 on a list of the most indebted countries. France’s national debt is 88% of its GDP, and yet the country has one of the strongest economies in the euro zone, and has been participating in bailouts for Ireland, Greece, and even Portugal, which has a lower debt-to-GDP ratio than France (NYSE:EWQ) at 87%.